| Tue 16 Oct 2001, 0:00 | | Equinox - Proposed Distributions, Disposals, Termi |
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Members' Voluntary Winding-U
EQUINOX HOLDINGS LIMITED
(Registration number 1998/013261/06)
Share code:EQX ISIN: ZAE000016762
("Equinox" or "the Company")
- PROPOSED DISTRIBUTIONS, DISPOSALS, TERMINATION OF LISTING AND MEMBERS'
VOLUNTARY WINDING-UP OF EQUINOX
- WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement dated 3 September
2001 which stated, inter alia, that Equinox was considering proposals which,
if implemented, would unlock value in the underlying assets of the Company
and would include a distribution to shareholders.
The directors of Equinox have decided, subject to the conditions precedent
set out in paragraph 6 below, to liquidate the assets of Equinox and
undertake an advance cash distribution, share distribution and subsequent
distributions to shareholders ("the distributions"), and to propose the
voluntary termination of Equinox's listing on the JSE Securities Exchange
South Africa ("JSE") and voluntary winding-up of Equinox ("the
transaction").
2. THE DISTRIBUTIONS
2.1 The advance cash distribution
Equinox holds cash of approximately R44,7 million after providing for
taxation and the costs of the transaction. This cash will be distributed to
Equinox shareholders as a cash distribution and will result in an Equinox
shareholder receiving 40 cents cash per share held ("the advance cash
distribution").
2.2 The share distribution
Equinox held 5 537 511 ordinary shares in Corpcapital Bank Limited
("Corpcapital Bank"), which represented approximately 4,8% of Corpcapital
Bank's total shares in issue. In terms of the merger between Corpcapital
Bank, Corpcapital Limited and Corpgro Limited ("Corpgro"), approved by
shareholders at a general meeting on 1 October 2001, Corpcapital Bank shares
converted into Corpgro shares in the ratio 1,715 Corpgro shares for every
one Corpcapital Bank share held. Accordingly, Equinox's shareholding in
Corpcapital Bank converted into 9 496 831 Corpgro shares with effect from
Monday, 15 October 2001. This shareholding will therefore be distributed to
Equinox shareholders by way of a distribution in specie in the ratio of
8,498118 Corpgro (which changed its name to Corpcapital Limited on Monday 15
October 2001) shares for every 100 Equinox shares held ("the share
distribution").
2.3 The subsequent distributions
Subsequent to the advance cash distribution and share distribution ("the
advance distributions"), Equinox's main assets will comprise an approximate
3% shareholding in MWD Technologies Limited ("Mineral Water"), and an
approximate 12% interest in e Freight (Pty) Limited. Should any proceeds be
derived from the disposals thereof, such proceeds, together with any other
excess cash, will be distributed to Equinox shareholders on or before
Monday, 3 June 2002. Such subsequent distributions should result in a total
distribution of approximately 3 cents per Equinox share held, on the
assumption that there are no proceeds from the sale of Mineral Water.
3. TERMINATION OF LISTING
Subject to the conditions precedent set out in paragraph 6 below, the board
of directors of Equinox have resolved to propose to Equinox shareholders
that the directors be authorised to apply to the Listings Committee of the
JSE for the voluntary termination of Equinox's listing on the JSE. A simple
majority will be required at the general meeting to terminate Equinox's
listing on the JSE.
4. RATIONALE
The reasons for the proposed distributions and delisting include, inter
alia, the following:
4.1 Equinox has for some time traded at a discount to its net asset value;
4.2 small capitalisation companies have become less and less marketable,
with the consequent inability of shareholders to obtain real value;
4.3 Equinox would not meet the new JSE Listings Requirements of a minimum of
500 shareholders and at least 20% of the issued share capital being held in
public hands in order to remain on the main board of the JSE lists;
4.4 the annual costs and regulations associated with a listing make it
inappropriate for Equinox to remain listed; and
4.5 the final expected subsequent distributions are considered immaterial by
the JSE for Equinox's listing on the JSE to continue beyond the date of the
advance cash distribution.
5. FINANCIAL EFFECTS
The table below sets out, for illustrative purposes only, a comparison of
the financial effects on the holder of one Equinox share:
After the
Before the advance Increase/
distributions distributions (decrease)
(cents) (cents) (%)
Headline earnings 0,48 1 1,6 2 233
Net asset value 76 3 54 4,6,7 (29)
Market value 45 5 54 4,7 20
Notes:
1. Published, unaudited headline earnings per share for the six months ended
31 March 2001, calculated as per the requirements of AC 306 on the basis of
116 960 000 shares in issue.
2. Based on the value of the advance distribution, being R63 million (R44,7
million for the advance cash distribution and R18,3 million being the value
of the Corpcapital Bank shares on Friday, 28 September 2001) and that
advance distribution consideration being invested at an after-tax rate of 6%
per annum for the six months ended 31 March 2001.
3. The unaudited net asset value per share of Equinox at 31 March 2001,
which included approximately 13 cents per share attributable to Mineral
Water.
4. The value of the advance distributions, calculated at 28 September 2001.
5. Based on the closing market price of an Equinox share on the JSE on 31
August 2001, being the last day on which the shares traded on the JSE before
publication of the cautionary announcement dated 3 September 2001.
6. The reconciliation between the net asset value on 31 March 2001 of 76
cents to the net asset value of the distribution of 57 cents (54 cents for
the advance distribution, and approximately 3 cents for the subsequent
distributions) comprises mainly the write-down of Mineral Water of
approximately 13 cents, the write-down of Corpcapital Bank of approximately
5 cents and the net costs associated with the transaction of approximately 1
cent.
7. Excludes the expected proceeds of approximately 3 cents per share from
the subsequent distributions.
6. CONDITIONS PRECEDENT
The proposed distribution, delisting and winding-up of Equinox is subject to
the following conditions precedent:
6.1 the approval of the transaction in general meeting and registration of
the requisite special resolutions, if any, by the Registrar of Companies;
and
6.2 the requisite approvals from the South African Revenue Services, the
Exchange Control Department of the South African Reserve Bank, the JSE and
other regulatory bodies, as appropriate.
7. DOCUMENTATION AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Documentation relating to the transaction, including a notice of general
meeting, subject to JSE approval, will be posted to shareholders within 28
days of this announcement. Accordingly, the cautionary announcement dated 3
September 2001 is hereby withdrawn.
Sandton
16 October 2001
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Adviser
Manhattan Equity Corporate Finance (Pty) Ltd
(Registration number 2000/011997/07)
