| Fri 22 Jun 2001, 0:00 | | Terms Of The Specific Pro Rata Repurchase Of Altro |
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PARTICIPATING PREFERENCE SHARES
ALLIED ELECTRONICS CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1947/024583/06)
("Altron" or "the company")
Terms of the specific pro rata repurchase of Altron ordinary and
participating preference shares
1. Introduction
Further to the announcement dated Tuesday 5 June 2001 the directors of
Altron hereby announce the terms of the specific repurchase by Altron
Finance (Pty) Limited, or any other wholly-owned subsidiary of the company
("Alfin"), of Altron ordinary shares and participating preference shares
("shares") from ordinary and participating preference shareholders
("shareholders").
2. Terms of the specific repurchase
It is proposed that, subject to the fulfilment of the condition precedent
set out in paragraph 3 below, Alfin will offer ("the pro rata offer") to
acquire from shareholders, pro rata to their shareholdings, 6 186 634
ordinary shares (equivalent to 6,37 per 100 ordinary shares) and 12 323 106
participating preference shares (equivalent to 6,37 per 100 participating
preference shares), comprising approximately 6,37% of each of the issued
ordinary and participating preference share capitals of Altron, for the
consideration of 810 cents per share ("the offer consideration").
Shareholders may elect to tender additional shares in excess of their pro
rata entitlement in terms of the pro rata offer ("the excess tender").
Shares so tendered may be acquired by Alfin on an equitable basis mutatis
mutandis on the terms and conditions applicable to the pro rata offer to the
extent that the directors in the exercise of their discretion so resolve,
subject to Alfin acquiring, together with the shares acquired in terms of
the pro rata offer, not more than a maximum in aggregate of 25 000 000
shares. The pro rata offer and the excess tender are referred to hereinafter
as the "specific repurchase".
The offer consideration will be discharged by cheque or electronic deposit
on or about Friday 3 August 2001.
The shares repurchased will be held as treasury stock.
If 6 186 634 ordinary shares and 12 323 106 participating preference shares
are repurchased, the cash cost to Alfin in respect of the offer
consideration will be approximately R150 million.
3. Condition precedent
The specific repurchase is subject to the requisite resolutions being passed
by shareholders in a separate class meeting of participating preference
shareholders and a general meeting of shareholders.
4. Salient dates
2001
Circulars mailed to shareholders Saturday 23
June
Last day to register in order to participate in the
specific repurchase Friday 29 June
Specific repurchase opens at the close of business Friday 29 June
Last day to lodge forms of proxy for the separate
class meeting of participating preference shareholders
and the general meeting of shareholders by 09:15 Friday 13 July
Annual general meeting held at 09:00 Monday 16 July
Separate class meeting of participating preference
shareholders held at 09:15 or immediately after the
conclusion of the annual general meeting Monday 16 July
General meeting held at 09:30 or immediately after the
Conclusion of the separate class meeting of
participating preference shareholders Monday 16 July
Results of the separate class meeting of participating
Preference shareholders and the general meeting of
shareholders published Tuesday 17 July
Specific repurchase closes at 16:00 Friday 27 July
Forms of acceptance and surrender in envelopes postmarked
on or before Friday 27 July 2001 to be received by the
transfer secretaries by 12:00 Wednesday 1
August
Result of specific repurchase published Friday 3 August
Cheques in respect of offer consideration mailed at the
risk of shareholders or cash electronically transferred Friday 3 August
Document(s) of title in respect of the excess tender
not taken up by the directors of Altron and/or balance
certificates in respect of the pro rata offer returned to
shareholders concerned, by registered mail,
at the risk of shareholders Friday 3 August
Note: The above dates and times are subject to amendment. Any such
amendment will be published in the press and on the Stock Exchange News
Service.
5. Financial effects
The following financial effects are based on the audited results of Altron
for the year ended 28 February 2001:
5.1 Pro forma financial effects on Altron
Before After Change
(cents per share) (cents per share) (%)
Net asset value 583,4 567,7 (2,7)
Tangible net asset value 502,2 480,9 (4,2)
See through net asset value3 992,0 1 004,5 1,3
Headline earnings4 101,5 104,4 2,9
Notes:
1. The above calculations are based on the specific repurchase of 6 186 634
ordinary shares and 12 323 106 participating preference shares for a
consideration of 810 cents per share and 96 997 515 ordinary shares and 189
042 997 participating preference shares in issue before the specific
repurchase as at 28 February 2001, adjusted for treasury shares owned by
Alfin which have been eliminated on consolidation.
2. All calculations assume the specific repurchase took place on 1 March
2000, the commencement of the last audited financial period.
3. Based on Altron ordinary and participating preference shares in issue,
adjusted for treasury shares held by Alfin and listed investments and net
assets including cash at 28 February 2001. Market values of Altron and its
underlying investments have been determined using closing JSE Securities
Exchange South Africa ("JSE") prices on Monday 18 June 2001.
4. Assuming an after tax interest rate of 7,25%, being the average after
tax interest rate earned by Altron on the cash resources to be utilised in
the specific repurchase. Based on a weighted average of 96 983 506 ordinary
shares and 191 150 361 participating preference shares in issue during the
year ended 28 February 2001, after adjusting for treasury shares held by
Alfin which have been eliminated on consolidation.
5.2 Pro forma financial effects on shareholders
Before After Change
(cents per share) (cents per share) (%)
Net asset value 583,41 810,02 38,8
Attributable cash flow 31,03 48,64 56,8
Market value
- ordinary shareholders 820,05 810,02 (1,2)
Market value - participating
preference shareholders 820,05 810,02 (1,2)
Notes:
1. Net asset value per share at 28 February 2001.
2. Offer consideration.
3. Dividend declared for the year ended 28 February 2001.
4. Assuming the offer consideration was placed on call for the period 1
March 2000 to 28 February 2001 at an average after tax interest rate of
6,0%.
5. Based on the closing JSE share prices on Monday 18 June 2001.
6. Adequacy of capital
The directors of Altron have considered the effects of the specific
repurchase and are of the opinion that:
the company will be able to pay its debts in the ordinary course of
business for a period of 12 months after the date of this announcement;
the consolidated assets of the company will be in excess of the
consolidated liabilities of the company for the period of 12 months after
the date of this announcement. For this purpose, the assets and liabilities
will be recognised and measured in accordance with the accounting policies
used in the preliminary results announcement of Altron for the year ended 28
February 2001;
the share capital and reserves of the company will be adequate for the
company's requirements for a period of at least 12 months after the date of
this announcement; and
the working capital available to the company will be sufficient for the
company's requirements for a period of at least 12 months after the date of
this announcement.
7. Undertakings by shareholders
Parties holding in aggregate 158 296 919 ordinary shares (81,8%) and 79 343
446 participating preference shares (81,7%) have irrevocably undertaken to
vote in favour of, or in instances where shares are held in limited
discretion portfolios, to recommend that shareholders vote in favour of, the
resolutions necessary to implement the specific repurchase.
Perrington Investments (Pty) Limited ("Perrington") has irrevocably
undertaken to tender 1 266 792 participating preference shares, being its
pro rata entitlement to tender participating preference shares in terms of
the pro rata offer, and has further undertaken to apply to tender 14 983 208
participating preference shares in terms of the excess tender.
Perrington is the investment vehicle set up by the Venter family to
facilitate the Ventron Corporation Limited unbundling by acquiring the
interests owned by the Anglo American plc group. Perrington will utilise the
proceeds arising from tendering in the specific repurchase to redeem
borrowings assumed in that transaction.
Subsequent to the specific repurchase, and assuming that Perrington's
application under the excess tender is satisfied in full, the Venter family
will control 61,0% of the ordinary shares and 19,2% of the participating
preference shares.
8. Separate class meeting and general meeting
A circular to shareholders setting out details of the specific repurchase
and including notices of a separate class meeting of participating
preference shareholders and a general meeting of shareholders of the company
and forms of proxy and forms of acceptance and surrender is in the process
of being finalised and will be mailed to shareholders on or about Saturday
23 June 2001.
Johannesburg
22 June 2001
Investment bank and joint sponsor
Nedcor Investment Bank
Joint sponsor
ENF Sponsors
Corporate adviser
KPMG
Corporate law advisers and consultants
Edward Nathan & Friedland
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