| Wed 11 Jul 2001, 0:00 | | Sondor - Scheme Of Arrangement Proposed By Eco-bat |
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SONDOR INDUSTRIES LTD
(Incorporated in the Republic of South Africa)
(Registration number 1987/003475/06)
("Sondor" or "the company")
SCHEME OF ARRANGEMENT PROPOSED BY ECO-BAT TECHNOLOGIES PLC
("ECO-BAT") BETWEEN SONDOR AND ITS SHAREHOLDERS, OTHER THAN ECO-BAT
1. Introduction
1.1 Shareholders of the company are referred to the cautionary announcement
published on 11 May 2001 which stated, inter alia, that Sondor had received
an offer from Eco-Bat to acquire the remaining 49% of the issued share
capital, which Eco-Bat did not hold, for a cash consideration of 150 cents
per share ("the Offer").
1.2 Eco-Bat has subsequently acquired 37,05% of Sondor's issued share
capital from a consortium of shareholders ("the Consortium") with effect
from 6 July 2001. The terms of the agreement with the Consortium state,
inter alia, that the Consortium shall receive 150 cents per share and in
addition, will participate in any interim dividend payable by Sondor
declared in its interim results ending 30 June 2001. The Securities
Regulation Panel ("SRP") has ruled that a similar offer be made to the
remaining shareholders of Sondor comprising 11,95% of Sondor's issued share
capital ("the Scheme members"). A scheme of arrangement in terms of Section
311 of the Companies Act, 1973 (Act 61 of 1973), as amended ("the Act"),
("the scheme"), between the company and the scheme members, in terms of
which Sondor will acquire the scheme members' shares in the capital of the
company, will now be proposed. The implementation of the scheme will,
accordingly, result in Sondor becoming wholly-owned by Eco-Bat and the
company being de-listed from the JSE Securities Exchange South Africa ("the
JSE"). The scheme will be coupled with an offer in terms of section 440K of
the Act ("440K offer"), which will take effect only if the scheme does not
become effective.
2. Background to and rationale for the scheme
Sondor has been quoted on the JSE for the past 14 years. In recent years, as
a small capitalisation company, its shares have become less and less
marketable, with the consequent inability for shareholders to obtain real
value and for the company to benefit from its true capitalisation. In
addition, the annual costs and regulations associated with a listing deemed
it inappropriate for Sondor to remain listed.
3. The Scheme
3.1 The scheme consideration
In terms of the scheme, shareholders registered as such on the record date
of the scheme will, upon the scheme becoming operative, be entitled to
receive a cash payment of 150 cents plus interest (with effect from 6 July
2001) for every Sondor share held.
In addition to the above scheme consideration, scheme members will recieve
any interim dividend payable by Sondor declared in its interim results
ending 30 June 2001.
3.2 Confirmation relating to the cash consideration
LPC Manhattan Sponsors (Pty) Limited has confirmed to the SRP that the
company has sufficient cash resources available to satisfy its obligations
in terms of the scheme.
3.3 Financial effects of the scheme on shareholders
The table below illustrates the financial effects per share of the scheme on
a shareholder:
Increase/
Notes Before After (Decrease)
(cents) (cents) (%)
Market value 1 110 150 36
Headline earnings 2 23,9 14 (41,4)
Net asset value 3 126,5 150 15,7
Notes:
1. Based on the closing market price of a Sondor share on the JSE on 19
April 2001, being the last day on which such shares traded on the JSE before
the publication of the first cautionary announcement.
2. Based on the audited headline earnings for the 12 months ended 31
December 2000, after taking into account the scheme consideration being
invested at an earnings yield of 9,3% on the JSE small market capitalisation
index for the 12 months ended 31 December 2000.
3. Based on the audited net asset value per Sondor share for the 12 months
ended 31 December 2000.
3.4 Conditions
The scheme will be subject to the following conditions precedent, namely:
3.4.1 the approval of the scheme by 75% of shareholders other than Eco-Bat,
present and voting either in person or by proxy at the scheme meeting;
3.4.2 the sanction of the scheme by the High Court of South Africa ("the
Court");
3.4.3 the registration by the Registrar of Companies of the Order of Court
sanctioning the scheme;
3.4.4 the shareholders, in general meeting, approving the resolutions
necessary to implement the scheme;
3.4.5 a guarantee being lodged with the SRP that Eco-Bat has sufficient
funding to satisfy full acceptance of the 440K Offer, should the scheme not
become effective; and
3.4.6 approvals by the JSE, SRP and other regulatory bodies.
4. Listing
Should the scheme be sanctioned by the Court and become operative, the
listing of the Sondor shares on the JSE will be terminated at the close of
business on or about Friday, 21 September 2001.
5. Opinions and recommendations
BDO Spencer Steward Ct (Inc) ("BDO") has been appointed as the independent
adviser to the minority shareholders of Sondor. BDO has advised the Sondor
board that the terms of the scheme are fair and reasonable.
The directors of Sondor have considered the terms of the scheme and are
unanimously of the opinion that the scheme consideration is fair and
reasonable and recommend that scheme members vote in favour of the scheme.
Those directors who hold shares in Sondor intend to vote in favour of the
scheme.
6. Documentation
A circular which is subject to approval by the SRP and the JSE containing
details of the scheme will be posted to shareholders on or about Friday, 17
August 2001. A further announcement providing the salient dates of the
scheme will be published in the press at that time.
Cape Town
12 July 2001
Corporate advisers to Sondor
Manhattan Equity Corporate Finance
Financial adviser to Eco-Bat
Ernst & Young
Chartered Accountants (SA)
(Registered Accountants and Auditors)
Independent adviser to the minorities of Sondor
BDO Spencer Steward
Chartered Accountants and Auditors
Registered Accountants and Auditors
Sponsor
LPC Manhattan Sponsors (Pty) Ltd
(Registration number 1999/024792/07)
Attorneys
Brink Cohen Le Roux & Roodt Inc Attorneys
(Registration number 1993/004501/21)
