| Wed 4 Jul 2001, 0:00 | | Billboard Holdings Limited - Terms Of Disposal And |
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("Billboard" or "the company")
The disposal by Billboard of its remaining businesses and assets and
liabilities and the delisting and voluntary winding up of the company
Introduction
Further to the cautionary announcement dated 10 May 2001 and the results
announcement dated 30 May 2001, Peregrine Corporate Advisory Services (Pty)
Limited is authorised to announce that the board of directors of Billboard
is proposing to effectively dispose of the remaining businesses and assets
of Billboard to Global Exhibit and Events Limited ("Global") (a company
incorporated in the United Kingdom and in respect of which Raymond Burke, a
director of Billboard, will be appointed Chief Executive Officer ) for a
cash consideration of
R4 600 000 ("the disposal").
Following the disposal, the only remaining asset of Billboard will be the
cash consideration received as a result of the disposal. The board proposes
that Billboard is voluntarily wound up ("the voluntary winding up"),
distributes any surplus cash to its shareholders and delists from the JSE
Securities Exchange South Africa ("JSE").
Rationale for the disposal and the winding up
As stated in the company's annual results announcement, cash flow
constraints as a result of poor performance have necessitated the disposal
or closure of a number of businesses within the Billboard group. The only
remaining businesses are the exhibition division (which includes Shell
Systems, Intermesse, Electrical Designs, Z Displays, Workshop 510 and DKB)
and the event management business carried on by a wholly owned subsidiary,
Prime Events (Pty) Limited ("Prime Events").
The board is of the view that Billboard no longer has sufficient critical
mass to maintain a listing. The board has therefore concluded that the best
way to maximise value for Billboard shareholders is for the remaining
businesses of Billboard to be sold and, following the passing of a member's
resolution to voluntarily liquidate the company, to distribute any surplus
cash to shareholders.
Terms of the disposal and the winding up
The disposal
The exhibition division as well as the remaining assets and liabilities of
the company (including, inter alia, the royalty payment owing to Billboard
by The Agency for Advertising and Marketing (Pty) Limited ("The Agency")
amounting to R4 500 000) will be sold on loan account to Prime Events with
effect from 28 February 2001. In addition, Prime Events will assume all
liabilities of the company including, inter alia, those liabilities related
to the disposal and the voluntary winding up. Billboard's shares in and
claim on loan account against Prime Events will then be sold to Global with
effect from 1 March 2001 for a cash consideration of R4 600 000, which
becomes due when the disposal becomes unconditional.
The voluntary winding up
The board estimates that the total of the liquidation dividend to
shareholders will amount to approximately 1 cent per share. An interim
payment will be made as soon as possible after the passing of the
resolutions for the voluntary winding up and the final dividend, if any,
will be paid once the voluntary winding up of Billboard has been finalised.
Delisting from the JSE
Following the disposal becoming unconditional, Billboard will apply to the
JSE to be delisted.
Financial effects
The table below sets out extracts from the audited results of Billboard for
the year ended 28 February 2001 as well as the pro forma effects of the
disposal on the earnings per Billboard share ("EPS"), the headline earnings
per Billboard share ("HEPS"), the net asset value per Billboard share
("NAV") and the net tangible asset value per Billboard share ("NTAV"), based
on the following assumptions:
the "Before" column is based on Billboard's audited results for the year
ended 28 February 2001 after adjusting for the effects of businesses which
have been disposed of or discontinued;
in calculating the "After" effect on EPS and HEPS, the disposal was assumed
to be effected on 1 March 2000;
in calculating the "After" effect on NAV and NTAV, the disposal was assumed
to be effected on 28 February 2001; and
the R4 600 000 received for the disposal was assumed to be invested at a
9.5% annual rate of interest.
Audited Pro forma Pro forma % change
28 February Before the After the
(cents) 2001 disposal disposal
EPS for the year ended
28 February 2001 0.48 (1.24) (5.47) (341.1)
HEPS for the year ended
28 February 2001 1.27 (0.07) 0.10 n/a
NAV at 28 February 2001 6.34 6.57 1.01 (84.6)
NTAV at 28 February 2001 6.34 6.57 1.01 (84.6)
Note: The royalty payment due from The Agency of R4 500 000 and those
liabilities relating to the disposal and the voluntary winding up have not
been taken into account in the calculation of financial effects.
Conditions
The disposal, the voluntary winding up and the subsequent distribution are
subject to, inter alia:
Raymond Burke entering into a signed employment agreement with Global;
the approval by Billboard shareholders in general meeting. In terms of the
rules of the Securities Regulation Panel ("SRP") and the JSE, Raymond Burke
shall be precluded from voting on the section 228 resolution concerning the
disposal;
the approvals of the JSE and the SRP and any other regulatory bodies; and
publication of a notice regarding the disposal in terms of Section 34 of the
Insolvency Act, No. 24 of 1936, as amended.
Documentation and further announcement
A circular to shareholders of the company setting out full details of the
transaction, including a notice of general meeting to consider and pass the
resolutions required to give effect to the transaction, will be posted to
shareholders within 28 days of this announcement. A further announcement
will be made once the final details of the liquidation dividends have been
determined.
Turffontein
4 July 2001
Sponsor
Peregrine Corporate Advisory Services (Pty) Ltd
Reporting accountants and auditors
PricewaterhouseCoopers
Chartered Accountants (SA)
Legal advisers
TW Ferguson
