| Mon 21 May 2001, 0:00 | | Boe Limited: Disposal Of 17.4% Of Abil |
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BoE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/003281/06)
("BoE" or "the Company")
BoE LIMITED: DISPOSAL OF 17.4% OF ABIL
BoE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/003281/06)
("BoE" or "the Company")
DISPOSAL OF 17.4% OF AFRICAN BANK INVESTMENTS LIMITED ("ABIL") TO
ABIL IN TERMS OF A SPECIFIC SHARE REPURCHASE
1. INTRODUCTION
UBS Warburg and BoE Merchant Bank are authorised to announce that subject to
the fulfilment of certain conditions precedent, as set out in paragraph 4
below, agreement has been reached in terms of which BoE will dispose of its
effective 17.4% interest in the issued ordinary share capital of ABIL, in
terms of a specific share repurchase (the "disposal") by ABIL.
ABIL is a credit banking group targeting credit gaps in under-served
markets. It provides:
- personal credit through its banking subsidiary, African Bank Limited;
- assurance products through its wholly-owned subsidiary, Standard General
Insurance Company Limited; and
- invests in start-up credit models through its wholly-owned investment
banking subsidiary, Theta Investments Limited.
2. THE DISPOSAL
2.1 Terms of the disposal
BoE will receive a total of R949 248 702.50 in cash for its effective 17.4%
interest in ABIL. This equates to 875 cents per ABIL share for each of the
108 485 566 shares that BoE owns. The carrying value of the holding at 31
March 2001 was R1 640 219 190 and the profits attributable to this asset for
the 6 months ended 31 March 2001 amounted to a headline contribution through
income from associates of R67 169 337 before non-headline goodwill written
off of R37 190 916.
2.2 Price adjustment
In the event that ABIL reaches agreement with another party or another party
makes a mandatory offer, under which that party is to acquire directly or
indirectly 35% or more of the issued ordinary share capital of ABIL or
greater than 50% of the business or net assets of ABIL, during the period
between the effective date and 180 days after the date on which the general
meeting of ABIL shareholders is held to vote upon this disposal, and such
mandatory offer or agreement subsequently becomes unconditional, then if
such agreement or mandatory offer is at a higher price per ABIL share (where
necessary translated into a price per share), the purchase price shall be
increased by the amount the consideration payable in such agreement or
mandatory offer exceeds 875 cents per ABIL share (or a pro rata proportion
thereof in the case of a partial offer or asset purchase), but limited to a
maximum increase of 75 cents per ABIL share above the disposal price.
2.3 Dividend
Should all the suspensive conditions to the disposal be fulfilled and the
disposal be successfully implemented, BoE will not be entitled to receive
the interim dividend declared by ABIL, the last day to register falling
after the effective date, referred to in paragraph 2.5 below.
2.4 Utilisation of the proceeds
The proceeds of the disposal will be utilised for expansion into new
operating businesses and initiatives.
2.5 Effective date
The effective date is to be Friday, 18 May 2001. Interest will accrue on the
purchase price at a rate of prime minus 2% from 15 June 2001 to the
settlement date. If settlement has not occurred on or before 15 July 2001,
the purchase price will accrue interest at prime from 15 July 2001 to the
settlement date. The settlement date shall be the later of the fifth
business day after the general meeting of ABIL shareholders convened to vote
upon the disposal, or the second business day after fulfilment of all the
conditions precedent.
3. RATIONALE FOR THE DISPOSAL
At the time of announcing the results for 30 September 2000, BoE undertook
to shareholders to clarify its long-term strategy in respect of ABIL.
Following in-depth discussions with the management of ABIL, both groups have
agreed that ABIL will pursue its own strategy and not form part of BoE's
mass market initiative.
4. CONDITIONS PRECEDENT
The disposal is subject to the following conditions precedent:
- approval by ABIL shareholders in general meeting of the requisite
resolutions to implement the disposal;
- an updated fair and reasonable opinion to the shareholders of ABIL, other
than BoE, being obtained from ABIL's independent advisors for inclusion in
the circular to ABIL shareholders; and
- the requisite approvals being obtained from the JSE, Registrar of Banks
and the Registrar of Companies and any other regulatory authority and all
their respective requirements being complied with.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the disposal of
ABIL shares on BoE based on its published unaudited results for the 6 months
ended 31 March 2001 using the following assumptions:
- the disposal had been effective on 1 October 2000 (for headline earnings
per share purposes) and on 31 March 2001 (for net asset value per share
purposes); and
- the proceeds from the disposal earned a post-tax rate of interest of 8.6%
per annum.
6 months ended 31 March 2001 Increase/ Increase/
Pre Post (Decrease) (Decrease)
(cents) (cents) (cents) (%)
Headline earnings per share 25.1 23.9 (1.2 ) (4.8)
Net asset value per share, as
reported, with investments at
market value 281 286 5.0 1.8
6. UNDERTAKINGS BY ABIL EXECUTIVE DIRECTORS
The executive directors of ABIL have irrevocably undertaken to BoE, in
respect of shares that they control, to vote in favour of the resolution to
be proposed at the general meeting of ABIL shareholders at which the
disposal will be considered.
Cape Town
21 May 2001
Financial advisor to BoE
UBS Warburg Corporate Finance South Africa (Pty) Ltd
UBS Warburg is a financial services group of UBS AG
(Registration number 1994/008363/07)
Lead sponsor to BoE
UBS Warburg Securities South Africa (Pty) Ltd
A financial services group of UBS AG
(Member of the JSE Securities Exchange South Africa)
(Registration number 1995/011140/07)
Attorneys
Sonneberg Hoffmann & Galombik Inc.
(Registration number 1993/000565/21)
Merchant bank to BoE
BOE Merchant Bank
A Division of BOE Bank Limited
Co. Reg. No. 1951/000847/06
Sponsor to BoE
BoE Securities (Pty) Ltd
Member of the JSE Securities Exchange South Africa
Co. Reg. No. 1995/012240/07
