| Wed 10 Oct 2001, 0:00 | | Set Point - Disposal Of Set Point Europe And Certa |
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specific repurchase of shares and Withdrawal of Cautionary
Set Point Technology Holdings Limited
(Registration Number 1996/014334/06)
("Set Point")
Share Code: STO
ISIN: ZAE 000013629
Disposal of Set Point Europe and certain local divisions and a specific
repurchase of shares
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 7 May, 28
May, 16 July and 28 August 2001.
Corpcapital Corporate Finance is authorised to announce that Set Point
Mauritius Limited, a wholly-owned subsidiary in the Set Point Group, has
reached agreement ("Set Point Europe agreement"), subject to the conditions
set out below, to dispose of its 100% shareholding in Set Point Europe
Limited ("Set Point Europe").
Set Point Europe manufactures a wide range of specialised instruments and
other proprietary technologies for geotechnical, environmental and
georemediation applications in Europe and other key international markets.
In addition, Set Point Industrial Technology (Proprietary) Limited ("Set
Point Industrial"), a wholly-owned subsidiary of Set Point, has disposed of
its B&W and Caser divisions and of its RBF Technology division for a
consideration which includes a return of shares pursuant to a specific
repurchase, as dealt with below.
The B&W division designs, manufactures, installs and supports a wide range
of electrical switchgear for various industries including medium and low
voltage panels, programmable logic panels, custom controls and a
comprehensive range of standard electrical and related products. The Caser
division installs borehole pumping equipment and constructs water related
civil and mechanical structures for rural and urban water supply projects.
The RBF Technology division designs and installs instrumentation and
electrical systems in the mining, petrochemical, food and beverage, iron and
steel industries, including power reticulation, revamping and upgrading
process plants and installing high -voltage systems.
These transactions are collectively referred to as "the disposals" below.
2. RATIONALE FOR THE DISPOSALS
Set Point is disposing of its investment in Set Point Europe, which is based
in the United Kingdom, principally to raise funds to lower its level of
gearing.
As previously announced, Set Point is in the process of disposing of non-
core and loss-making operations, which include the B&W, Caser and RBF
Technology divisions. The process is close to being complete and the
disposals will enable Set Point to concentrate on its core businesses.
3. SALIENT TERMS OF THE AGREEMENTS
The agreement to dispose of the investment in Set Point Europe to Bacharach
UK Holdings, Inc is effective from 1 September 2001.The consideration in
terms hereof is an aggregate amount of GBP2 443 790 payable as follows:
* the sum of GBP2 137 790, which amount has already been received in cash;
and
* the balance of GBP306 000, together with interest, which shall be paid on
or before 31 December 2001.
In terms of the Set Point Europe agreement, for a period of three years from
1 September 2001, no member of Set Point and its subsidiaries shall engage
in any activity which is substantially the same as the business of Set Point
Europe. No additional consideration was paid for this restraint of trade
undertaking.
The agreements to dispose of B&W and Caser to Biotrace Trading 93
(Proprietary) Limited ("Biotrace"), and to dispose of RBF Technology to
Three-Way Industrial Supplies CC are effective from 1 March 2001 ("the local
disposal agreements").
The aggregate consideration received in terms of the local disposal
agreements is a nominal amount in cash, delivery by Biotrace of 7 643 192
shares in Set Point at a price of 11 cents per share and cession of certain
debtors. The receipt of 7 643 192 shares in Set Point by Set Point
Industrial constitutes a specific repurchase of shares, and is subject to
shareholder approval by special resolution. Set Point Industrial proposes
holding these shares as treasury stock. The authority for the specific
repurchase will be sought at a meeting of Set Point shareholders to be held
on Thursday, 29 November 2001 and the specific repurchase will be made with
effect from Tuesday, 4 December 2001. (These dates are subject to change and
any such change will be published in the press)
The terms of the disposals include warranties as would ordinarily be
expected in transactions of this nature.
4. FINANCIAL EFFECTS
The table below illustrates the pro forma financial effects of the disposals
on the headline earnings, earnings, net asset value and net tangible asset
value per share of Set Point, based on the Set Point interim results for the
six months ended 28 February 2001 ("interim period") and on the following
assumptions and information:
*that the proceeds of the disposals were received at the beginning of the
interim period;
* that savings in overdraft interest of 10,15% after tax were achieved by
Set Point over the interim period due to the reduction in borrowings
resulting from the cash proceeds of the disposals;
* that the exchange rate of one British Pound to 9,9292 Rands was applicable
at the beginning of the interim period; and
* that the specific share repurchase of 7,6 million shares had been
undertaken at the beginning of the interim period, and the weighted average
number of shares in issue and the number of shares in issue during the
interim period, and at 28 February 2001 respectively, was 174,8 million.
Results Pro forma %
before results change
the after the
disposals disposals
(cents) (cents)
Headline earnings per share (4,9) (0,8) 83,6
Earnings per share (7,6) 1,5 119,9
Net asset value per share 20,6 26,0 26.2
Net tangible asset value 17,6 22,9 29.9
per share
Shareholders' attention is drawn to the fact that these financial effects
have been calculated at an exchange rate of R9.93 to one British Pound
whereas an average exchange rate of approximately R13.65 to one British
Pound was achieved on that part of the proceeds remitted to South Africa.
Accordingly there will be an additional foreign exchange benefit to the
group
CONDITION TO THE SET POINT EUROPE AGREEMENT
The Set Point Europe agreement is subject to approval by relevant regulators
and the shareholders of Set Point in general meeting. Shareholders,
representing 50,99% of the issued share capital of Set Point, have provided
written undertakings to vote all their shares in Set Point in favour of the
conclusion and implementation of the Set Point Europe agreement.
CIRCULAR TO SHAREHOLDERS
Within 28 days of the date of this announcement, a circular will be
dispatched to the shareholders of Set Point, setting out details of the
abovementioned agreements and the specific repurchase of shares in terms of
the Listings Requirements of the JSE Securities Exchange South Africa and
incorporating a notice convening a general meeting and a form of proxy.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENTS
The cautionary announcements referred to above are hereby withdrawn.
Johannesburg
10 October 2001
Corporate advisor Sponsor
Corpcapital Corporate Finance Standard Corporate and Merchant Bank
