| Thu 5 Jul 2001, 0:00 | | Proposed Rationalisation Of The Winbel Group |
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WINBEL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/009225/06)
("Winbel")
GUNDLE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1942/015274/06)
("Gundle")
WINHOLD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019679/06)
("Winhold")
INMINS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004321/06)
("Inmins")
(collectively, "the Winbel Group")
PROPOSED RATIONALISATION OF THE WINBEL GROUP,
Incorporating proposed schemes of arrangement and the unbundling of Winbel's
interest in winhold
1. Proposed rationalisation
1.1 Introduction
The Winbel Group presently comprises four listed companies, with Winbel
being the ultimate holding company, Winhold being the intermediate holding
company and Gundle and Inmins being operating companies. The only asset of
Winbel is its holding of 59,7% of the share capital of Winhold, and the only
material assets of Winhold are its holdings of 65,5% and 52,3% of the share
capitals of Gundle and Inmins, respectively.
1.2 Rationale
The boards of directors of the Winbel Group have for some time considered
proposals to rationalise the Winbel Group in order to simplify the group
structure and effect a reduction in the significant costs associated with
maintaining multiple listings. In addition, it is expected that such a
rationalisation will enhance liquidity in trading in the shares of the
Winbel Group.
1.3 Mechanics
After discussions with the major shareholders of the Winbel Group, the
boards of directors have decided to effect the rationalisation of the Winbel
Group, as follows:
- Winhold will offer to acquire all the ordinary shares in Gundle and Inmins
not already held by it, thereby constituting Gundle and Inmins as wholly-
owned subsidiaries; and
- Winbel will thereafter unbundle its interests in Winhold as reconstituted
to its shareholders.
The offers by Winhold to the shareholders of Gundle and Inmins will be
implemented by means of separate interdependent schemes of arrangement as
more fully set out below and the unbundling will take place in accordance
with the relevant provisions of the Income Tax Act, 1993 (Act 133 of 1993),
as amended ("the income tax act").
2. The schemes of arrangement
2.1 Introduction
Winhold will propose schemes of arrangement in terms of section 311 of the
Companies Act, 1973 (Act 61 of 1973), as amended ("the schemes"), which, on
implementation, will result in:
- Gundle and Inmins becoming wholly-owned subsidiaries of Winhold;
- the listings of Gundle and Inmins on the JSE Securities Exchange South
Africa ("the JSE") being terminated.
2.2 Conditions precedent
The approval and implementation of the schemes is subject to:
- the schemes being approved by a majority representing three-fourths of the
votes exercisable by Gundle and Inmins shareholders, other than Winhold
("scheme members"), present and voting either in person or by proxy at
separate scheme meetings of scheme members; and
- the schemes being sanctioned by the High Court of South Africa
(Witwatersrand Local Division) and the Orders of Court being registered by
the Registrar of Companies.
2.3 Scheme consideration
In terms of the schemes, scheme members will receive:
- in respect of Gundle, 278,291612 ordinary shares in Winhold for every 100
scheme shares; and
- in respect of Inmins, 187,482695 ordinary shares in Winhold for every 100
scheme shares.
2.4. Effects of the schemes
The financial effects of the schemes on the market value, net asset value
and earnings attributable to the holder of 100 Gundle or Inmins shares set
out below are based on the volume weighted average closing market prices of
Winhold, Gundle and Inmins for the three months ended on 12 June 2001 (being
the last trading date prior to the publication of the cautionary
announcement on 13 June 2001) and the net asset value and earnings per share
for the:
2.4.1 Financial year ended 30 September 2000
GUNDLE Before the scheme: After the scheme:
100 Gundle 278,291612 Winhold
shares shares Change %
(R) (R)
Increase/(decrease)
Market value 77,76 77,76 -
Net asset value 243,41 210,90 (13,36)
Net tangible asset value 238,25 208,43 (12,52)
Earnings 10,11 30,83 204,95
Headline earnings 10,11 21,97 117,31
INMINS Before the scheme: After the scheme:
100 Inmins 187,482695 Winhold
shares shares Change %
(R) (R)
Increase/(decrease)
Market value 52,38 52,38 -
Net asset value 107,05 142,08 32,72
Net tangible asset value 107,05 140,42 31,17
Earnings 27,81 20,77 (25,31)
Headline earnings 19,28 14,80 (23,24)
2.4.2 Six months ended 31 March 2001
GUNDLE Before the scheme: After the scheme:
100 Gundle 278,291612 Winhold
shares shares Change %
(R) (R)
Increase/(decrease)
Market value 77,76 77,76 -
Net asset value 243,52 220,22 (9,57)
Net tangible asset value 238,05 217,62 (8,58)
Earnings 0,10 9,71 9 610,00
Headline earnings 0,10 10,56 10 460,00
INMINS Before the scheme: After the scheme:
100 Inmins 187,482695 Winhold
shares shares Change %
(R) (R)
Increase/(decrease)
Market value 52,38 52,38 -
Net asset value 117,61 148,36 26,15
Net tangible asset value 117,61 146,61 24,65
Earnings 10,55 6,54 (37,99)
Headline earnings 11,78 7,12 (39,56)
2.5 Termination of listings on the JSE
Subject to the schemes being implemented, it is anticipated that the
listings of Gundle and Inmins on the JSE will be terminated with effect from
the close of business on Friday 7 September 2001, which is the anticipated
date for the schemes becoming effective ("the record date").
3. The unbundling of Winbel's interest in Winhold
3.1 Introduction
The shareholders of Winbel will be requested to approve the unbundling by
Winbel of all the ordinary shares held by it in Winhold, comprising 39 385
991 Winhold shares ("the Winhold distributable shares") to Winbel
shareholders registered as such at the close of business on the record date
("the Winbel unbundling"), subject to the schemes detailed above becoming
effective.
3.2 Distribution
The Winhold distributable shares will be distributed to the Winbel
shareholders in the ratio of 75,581323 Winhold shares for every 100 Winbel
shares held on the record date.
The Winbel unbundling will be implemented by way of a distribution in specie
out of the distributable reserves of Winbel.
3.3 Fractional entitlements
Fractional entitlements to Winhold distributable shares will not be
allocated but will be aggregated and sold on the JSE. The cash proceeds, net
of costs, will be remitted to Winbel shareholders if such proceeds, in the
aggregate, exceed R5,00 per shareholder.
3.4 Application to the South African Revenue Services regarding the Winbel
unbundling
Application will be made to the South African Revenue Services to approve
the Winbel unbundling as an "unbundling transaction" in terms of section 60
of the Income Tax Act with a view to obtaining, inter alia, rulings that:
- the registration of transfer of the Winhold distributable shares into the
name of Winbel shareholders will be exempt from stamp duty;
- the payment to Winbel shareholders of the cash proceeds from the sale of
aggregated entitlements to fractions of Winhold distributable shares will
not be subject to Secondary Taxation on Companies;
- the distribution of the Winhold distributable shares will be deemed not to
be a dividend for the purposes of Secondary Taxation on Companies.
3.5 Suspensive conditions of the Winbel unbundling
The implementation of the Winbel unbundling is subject, inter alia, to the
fulfilment of the following suspensive conditions:
- the adoption, at a general meeting of Winbel shareholders, of an ordinary
resolution approving and authorising the implementation of the Winbel
unbundling;
- the South African Revenue Services approving the Winbel unbundling as an
unbundling transaction and granting the rulings as contemplated in paragraph
3.4 above; and
- the schemes being implemented.
Winbel shareholders holding in excess of 70% of the issued shares of Winbel
have indicated that they intend to vote in favour of the resolution required
to implement the Winbel unbundling.
3.6 Effects of the Winbel unbundling
The Winbel unbundling will result in Winbel having cash as its sole asset
and it will, if it complies with the Listings Requirements of the JSE
applicable to cash companies, be moved to the "Cash Companies" sector of the
JSE lists with effect from 10 September 2001. In accordance with the
Listings Requirements, a period of six months will be allowed within which
assets complying with the Listings Requirements may be introduced into
Winbel, failing which its listing will be suspended for a further period of
three months whereafter the listing will be terminated.
The Winbel unbundling will not affect the aggregate earnings and net asset
value attributable to Winbel shareholders. After the Winbel unbundling the
earnings and net asset value in respect of Winhold shares will accrue
directly to Winbel shareholders. However, the directors of Winbel are of the
opinion that the Winbel unbundling, resulting in the elimination of multiple
listings and a single point of entry into the Winbel Group, will enhance the
share price of and trading in Winhold.
4. General and documentation
In addition to the schemes and the Winbel unbundling, it will be necessary
to convene a general meeting of the shareholders of Winhold in order to
approve the proposal of the schemes and to increase the authorised share
capital of Winhold to enable implementation of the schemes, if approved.
Documentation in regard to the Winbel and Winhold general meetings, the
schemes and the Winbel unbundling is being prepared and will, subject to the
approvals of the JSE and the Securities Regulation Panel, be despatched to
shareholders of the Winbel Group within 28 days of this announcement.
5. Salient dates
An announcement of the salient dates and times of the Winbel and Winhold
general meetings, the schemes and the Winbel unbundling will be published in
due course.
Johannesburg
5 July 2001
Corporate adviser
LFS
Lanark Financial Services (Proprietary) Limited
(Registration number 1999/021799/07)
Attorneys
FRRW
Fluxman Rabinowitz - Raphaely Weiner Inc. Attorneys
www.frrw.co.za
Auditors
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Sponsor
LPC Manhattan Sponsors (Pty) Ltd
(Registration number 1999/024792/07)
