| Fri 12 Oct 2001, 0:00 | | Nictus - The Proposed Transactions |
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NICTUS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1981/011858/06)
Namibian Share Code: NCT
South African Share Code: NCS
ISIN: ZAE000031258
("Nictus" or "the company")
The proposed transactions
1. Introduction
1.1 Further to the cautionary announcement dated 12 September 2001, HSBC
Investment Services (Pty) Limited is authorised to announce that, subject to
the fulfilment of the conditions precedent set out in paragraph 4 below, the
directors of Nictus propose:
1.1.1 that Nictus adopts a new set of articles of association;
1.1.2 that the authorised share capital of Nictus be increased;
1.1.3 that the company creates 2 000 secured debentures of R10 000,00 each;
1.1.4 that the company issues 271 044 ordinary shares for cash in terms of
the general authority;
1.1.5 that the company awards 2 125 000 new ordinary shares by way of a
capitalisation issue;
1.1.6 that the company acquires the entire issued share capital of Corporate
Guarantee Limited ("CGL");
1.1.7 that the existing share incentive scheme be amended (collectively,
"the transactions").
2. Details of, and rationale for, the transactions
2.1 Adoption of the new articles of association, increase in the authorised
share capital and creation of debentures
The directors of Nictus propose the following:
2.1.1 the company adopts a new set of articles of association in order to
bring Nictus' current articles of association in line with the changes
effected to the Companies Act, 1973 (Act 61 of 1973), as amended, and the
Listings Requirements of the JSE Securities Exchange South Africa ("the
JSE");
2.1.2 the increase in authorised share capital from 8,5 million ordinary
shares of R0,50 each to 100 million ordinary shares of R0,50 each in order
to provide sufficient authorised share capital to implement the acquisition
of CGL and provide for future corporate activity; and
2.1.3 the company creates 1 000 "A" and 1 000 "B" secured debentures having
a par value of R10 000,00 each ("the debentures") in terms of the secured
debenture trust deed in order to provide flexibility in the company's
funding arrangements through access to loan capital.
2.2 General issue of shares for cash
The company will issue 271 044 new ordinary shares for cash at R1,00 per
share which represents a premium of 11% to the weighted average traded price
of the ordinary shares over the 30 business days prior to Friday, 5 October
2001. The proposed issue will be made in terms of the general authority to
issue shares for cash granted by the shareholders at the annual general
meeting held on 20 August 2001 and will be issued to an unrelated public
shareholder.
2.3 Capitalisation issue
The directors of Nictus have resolved to award new ordinary shares to
ordinary shareholders registered on Friday, 9 November 2001 ("record date")
by way of a capitalisation issue. Such ordinary shareholders will be
entitled to receive 25 new ordinary shares for every 100 ordinary shares
held on the record date. The new ordinary shares will be issued as fully
paid by way of a capitalisation of R1 062 500 of Nictus' share premium. The
listing of the new ordinary shares to be issued pursuant to the
capitalisation issue will commence on the JSE and the Namibian Stock
Exchange on Monday, 12 November 2001. Non-renounceable share certificates
and fractional entitlement cheques, where applicable, will be posted to
ordinary shareholders on Monday, 12 November 2001.
2.4 Acquisition
2.4.1 Nature of business of CGL
CGL operates in a niche market in the short-term insurance industry
providing unique solutions to risk management. An important factor in the
success of its approach to risk management is a sound return on the funds
underpinning risk cover provided. In January 2000, Veritas Kapital (Pty)
Limited was formed as a wholly-owned subsidiary of CGL, to operate as a
finance company providing selected clients with loans, thus enabling CGL to
earn competitive returns on its capital.
2.4.2 Purchase consideration
The directors of Nictus have resolved to acquire the entire issued share
capital of CGL for a total purchase consideration of N$20 003 200 which will
be settled by the issue of 25 004 000 new ordinary shares in Nictus at an
issue price of R0,80 per share. The proposed acquisition of CGL is congruent
with Nictus' prime objective of excelling as a services and products group.
2.5 Amendment of the share incentive scheme
In order to ensure the continued loyalty and dedication of employees to the
group the directors have resolved that the share incentive scheme be
amended. Such amendments will enable the share incentive scheme to acquire
a maximum of 12% of the issued ordinary share capital of the company, and
increase any individual participants' maximum entitlement to no more than 3%
of the ordinary shares of the company in issue.
3. Pro forma financial information and effects
3.1 The pro forma financial information and effects have been prepared for
illustrative purposes only, to show the effect of the general issue of
shares for cash, the capitalisation issue and the issue of 25 004 000 shares
as consideration for the acquisition of CGL.
Due to its nature, the pro forma financial information and effects may not
give a true picture of Nictus' financial position, changes in equity and
results of operations or cash flows. Based on the audited financial
information of Nictus for the year ended 31 March 2001, the pro forma
financial effects of the above-mentioned transactions are set out below:
After cash After the
and acquisition of
capitalisation Corporate
Before(1) issue(2) Guarantee(3) Percentage
(cents) (cents) (cents) change
Number of shares
in issue 8 228 956 10 625 000 33 024 834 301,32
Net asset value
per ordinary share 104,79 83,96 80,01 (23,65)
Net tangible asset value
per ordinary share 106,08 84,96 85,36 (19,53)
Earnings per share 53,30 41,53 21,87 (58,97)
Headline earnings
per share 14,85 11,75 12,29 (17,24)
Notes:
1. Based on the audited financial information of Nictus for the year ended
31 March 2001.
2. After the issue of 271 044 shares for cash and the capitalisation issue
on a 1-for-4 basis (2 125 000 shares), on the assumption that these took
place on 1 April 2000 and that an after-tax return of 10% was earned on the
proceeds of the issue of shares for cash.
3. After adjusting earnings for the year ended 31 March 2001, on the
assumption that the transaction was effective from 1 April 2000, to reflect
100% of the annualised equivalent of the reviewed earnings of CGL for the
six months ended 30 April 2001 and taking the 25 004 000 consideration
shares into account.
4. Conditions precedent
The acquisition is subject to the fulfilment of the following conditions
precedent by not later than 30 November 2001:
4.1 the adoption of the new articles of association of Nictus;
4.2 the increase of the Nictus authorised share capital to 100 million
ordinary shares;
4.3 the approval of the terms and conditions of the Exchange of Shares
Agreement by Nictus ordinary shareholders in general meeting;
4.4 the approval of the terms and conditions of Exchange of Shares Agreement
by CGL ordinary shareholders in general meeting.
5. Documentation
A circular containing full details of the transactions will be dispatched to
Nictus ordinary and preference shareholders today, Friday, 12 October 2001.
Pretoria
12 October 2001
Sponsor in South Africa
HSBC
Sponsoring broker in Namibia
HSBC
Phillip JA van Heerden
Member of the Namibian Stock Exchange
Trading as
HSBC Securities (Namibia) (Pty) Limited
Reg. No. 95/505
Accountants in South Africa
KPMG
Registered Chartered Accountants (SA)
(Registration number 1999/021543/21)
Accountants in Namibia
KPMG
Registered Chartered Accountants (SA)
(Registration number 1999/021543/21)
Legal advisers in South Africa
Webber Wentzel Bowens
Legal advisers in Namibia
Theunissen, Louw & Partners
