| Tue 3 Jul 2001, 0:00 | | Proposed Voluntary Termination Of Unigro's Listing |
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Universal Growth Holding Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/007844/06)
("Unigro" or "the company")
PROPOSED VOLUNTARY TERMINATION OF UNIGRO'S LISTING
1. INTRODUCTION
Trans Atlantic Securities (Proprietary) Limited is authorised to announce
that the board of directors of Unigro ("the directors") has resolved,
subject to the fulfilment of the conditions precedent set out in paragraph 5
below, to propose to Unigro shareholders that the directors be authorised to
apply to the Listings Committee of the JSE Securities Exchange South Africa
("the JSE") for the voluntary termination of Unigro's listing in the
Industrial - "Retail" sector of the JSE lists ("the delisting").
2. HISTORY AND BACKGROUND
2.1 Unigro has historically been involved in the manufacture and
distribution of high quality outdoor and camping products.
2.2 Unigro's banking facilities were withdrawn by Nedbank during August
2000 and winding-up proceedings were instituted by Nedbank. These
proceedings were subsequently withdrawn and the Nedbank banking facilities
were reinstated during September 2000.
2.3 Consequently, Unigro's operating activities were severely constrained
and, at the request of the directors, Unigro's listing on the JSE was
suspended with effect from 18 August 2000.
2.4 The directors have resolved, for the reasons set out in paragraph 3
below, to propose to Unigro shareholders that the directors be authorised to
apply to the Listings Committee of the JSE for the termination of the
company's listing on the JSE lists as soon as possible.
3. RATIONALE FOR DELISTING
3.1 The directors are of the opinion that, given the losses incurred by
Unigro prior to June 2000 when certain trading irregularities were
discovered and, thereafter, the liquidation of a subsidiary, Formulife 2000
(Proprietary) Limited and its subsidiaries, with the resultant pressure on
Unigro's operating activities, the current negative sentiment towards small
capitalisation companies on the JSE, Unigro's current "suspended" status on
the JSE and the high cost associated with maintaining a listing on the JSE,
there appears to be little justification for the continued listing of
Unigro.
3.2 Any benefits of being a listed company have disappeared as a result of
the factors described in 3.1 above.
3.3 It has become clear from discussions with potential funders and
potential merger partners for all or parts of the business that such
potential funders and merger partners would either prefer that Unigro not be
listed or insist on the delisting as a pre-condition to any transaction that
may be concluded with Unigro.
3.4 Consequently, the directors propose that Unigro's listing be terminated
as soon as practicably possible to enable Unigro to operate its business and
pursue such restructuring initiatives as may unlock shareholder value in a
more cost effective, unlisted group structure.
4. PROSPECTS
At present, the directors are considering various opportunities that may
result in the recapitalisation of and the return to profitability of
Unigro's business, including the possible disposal of one of its divisions,
a possible acquisition of a complementary business, bringing in a new
investor into the company and a possible minority shareholder buy-out
pursuant to the implementation of the delisting ("the proposals"). The
successful outcome of these proposals are, however, uncertain at present.
Details, if any, regarding the proposals will be communicated to Unigro
shareholders as soon as definitive progress has been made in this regard.
5. CONDITIONS PRECEDENT
The delisting is subject to fulfilment of the following conditions
precedent:
- a 50% majority of votes of all Unigro shareholders, excluding controlling
shareholders, their associates or any party acting in concert with them, if
any, being cast in favour of the delisting resolution in general meeting;
and
- the JSE granting such approvals as are necessary to finally effect the
delisting.
6. GENERAL MEETING
A general meeting of Unigro shareholders will be convened in due course
for the purpose of considering and, if deemed fit, passing such resolutions
as may be required to approve the delisting.
7. CIRCULAR TO SHAREHOLDERS
A circular to Unigro shareholders, containing details of the delisting and
incorporating a notice of general meeting of Unigro shareholders, is being
prepared and will, subject to JSE approval, be posted to Unigro shareholders
within 28 days of this announcement or such longer period as may be required
in the circumstances and allowed by the JSE.
8. FURTHER ANNOUNCEMENT
A further press announcement providing information on the salient dates of
the general meeting and the delisting will be published in the press in due
course.
Roodepoort
4 July 2001
Corporate advisers and sponsor
Trans@lantic Securities (Pty) Ltd
Corporate Finance
(Registration number 1999/000210/07)
Attorneys
Barry Aaron & Associates
Auditors
RA Hellmann & Co.
