| Fri 9 Nov 2001, 0:00 | | Capestar Growth Investments Ltd - Disposal, Volunt |
|
distribution of cash resources
(Incorporated in the Republic of South Africa)
(Registration number 1951/004039/06)
Share code: CST ISIN: ZAE000013116
("CapeStar" or "the company")
Disposal, voluntary winding-up, distribution of cash resources
and delisting of CapeStarDisposal, voluntary winding-up,
distribution of cash resources and delisting of CapeStar
1. Introduction
1.1 CapeStar has been implementing its stated policy of realising its
portfolio of investments and the conversion of those investments into cash
over the last two years. CapeStar, in its results announcement on Wednesday,
18 September 2001, advised that its only remaining portfolio investment is
its 36,1% stake in Amalda Trading (Pty) Limited, trading as Peoples
Furnishers ("Peoples Furnishers"). Peoples Furnishers operates as a
furniture retailer in the Western Cape.
1.2 CapeStar has been unable to dispose of its investment in Peoples
Furnishers for more than a year, due to the depressed retail environment and
the poor operating performance of Peoples Furnishers. The disposal of
CapeStar's interest in Peoples Furnishers ("the disposal") and the recovery
of a R3,3 million loan due from Peoples Furnishers will expedite the
delisting and winding-up of CapeStar and at the same time limit Secondary
Tax on Companies ("STC") and other costs.
2. Disposal
2.1 Due to the adverse trading conditions experienced by Peoples Furnishers
and the subsequent increase in the provision for bad and doubtful debts,
CapeStar has written-off its investment in Peoples Furnishers as at 30 June
2001. Arrangements have been made between Peoples Furnishers and Brait
Investments (Pty) Limited ("Brait") to refinance the R3,3 million owing by
Peoples Furnishers to CapeStar. The refinancing involves Brait entering into
a loan agreement by advancing R3,3 million to Peoples Furnishers on normal
commercial terms and Peoples Furnishers settling its loan with CapeStar
("the refinance agreement"). The sole purpose of the refinance agreement is
to allow Peoples Furnishers to repay amounts due to CapeStar.
2.2 CapeStar and Brait have, subject to, inter alia, the approval of
independent CapeStar shareholders in general meeting and the approval of the
necessary documentation by the JSE Securities Exchange South Africa ("JSE"),
entered into an agreement whereby Brait, with effect from 1 October 2001,
acquired CapeStar's interest in Peoples Furnishers for R1,00.
2.3 As CapeStar's investment in Peoples Furnishers has already been written-
off, the disposal and the recovery of the loan will have no material effect
on the net asset value, net tangible asset value, earnings and headline
earnings of CapeStar shares.
3. Proposed voluntary winding-up, suspension and termination of CapeStar's
listing on the JSE
3.1 Subject to the disposal becoming unconditional and approval of CapeStar
shareholders in general meeting of the necessary resolutions and the
subsequent registration of special resolutions:
3.1.1 CapeStar will be wound-up in terms of sections 349 and 350 of the
Companies Act, 1973 (Act 61 of 1973), as amended, by way of a members'
voluntary winding-up;
3.1.2 the listing of CapeStar on the JSE will be suspended with effect from
the commencement of trading on Monday, 21 January 2002; and
3.1.3 the listing of CapeStar on the JSE will be terminated with effect from
the commencement of trading on Monday, 28 January 2002.
4. Proposed distribution of cash resources
4.1 The board of CapeStar propose to, subject to the disposal becoming
unconditional and the voluntary winding-up, suspension and termination of
CapeStar's listing on the JSE, distribute an advance liquidation dividend of
45 cents per CapeStar share ("advance liquidation dividend") to CapeStar
shareholders registered as such at the close of trading on Friday, 25
January 2002 ("record date"). The advance liquidation dividend will be
payable on Monday, 28 January 2002.
4.2 The balance of cash held by CapeStar, after all the liabilities,
liquidation costs, as well as normal taxation and STC have been settled,
will be distributed as a final liquidation dividend to CapeStar shareholders
registered as such on the record date. It is anticipated that the final
liquidation dividend, subject to no unforeseen circumstances arising, should
be approximately 4 cents per share, and will be distributed as soon as
possible after the voluntary winding-up of CapeStar has been finalised to
the satisfaction of the Master of the High Court of South Africa.
5. Related party transaction
5.1 Brait and/or Brait associated companies ("Brait and associates") hold
approximately 20% of the issued share capital of CapeStar and is a related
party to CapeStar. Consequently, the JSE have ruled that independent
CapeStar shareholders approve the disposal and that Brait and associates may
not vote in respect of the disposal at the general meeting. However, Brait
and associates will not be precluded from voting in respect of the
resolutions other than those relating to the disposal.
5.2 The Peoples Furnishers disposal will not represent a material disposal
for CapeStar as the investment in Peoples Furnishers has already been
written-off in full in the records of CapeStar for the year ended 30 June
2001. Not withstanding, CapeStar has appointed an independent professional
expert to advise on the fair and reasonableness of the disposal in terms of
the Listings Requirements of the JSE.
6. Important dates and times
2002
Last day to lodge forms of proxy by no later than
10:00 on Friday, 4 January
General meeting to be held at 10:00 on Tuesday, 8 January
Results of the general meeting published on Thursday, 10 January
* Expected last day to trade in CapeStar shares
in order to be entitled to receive the advance and
final liquidation dividends on Friday, 18 January
* Suspension of trading in CapeStar shares on the JSE
with effect from the commencement of trading on Monday, 21 January
* Record date for CapeStar shareholders to register
as such in order to participate in the advance and
final liquidation dividends on Friday, 25 January
* Termination of the listing of CapeStar shares on the
JSE with effect from the commencement of
trading on Monday, 28 January
* Payment of the advance liquidation dividend to
CapeStar shareholders registered as such on the
record date on Monday, 28 January
Notes:
1. These dates and times are subject to amendment. Any such amendment will
be published in the press.
2. Dates marked with an asterisk are dependent upon the required CapeStar
shareholder approvals relating thereto.
7. Pro forma net asset statement
The net effect of the advance liquidation dividend on the net asset value of
CapeStar is illustrated in the table below:
Pro forma
net asset
Audited statement after
balance the advance
sheet at liquidation
30/06/2001 Note (1) Note (2) Note (3) dividend
R'000 R'000 R'000 R'000 R'000
Assets
Non-current assets 32 270 (27 500) (3 628) (993) 149
Interest in subsidiary
and associate 4 770 (3 628) (993) 149
Preference share investment 27 500 (27 500)
Current assets 5 409 (1 419) 2 454 (5 355) 1 089
Trade and other receivables 5 110 (4 521) (589)
Bank and cash balances 299 3 102 3 043 (5 355) 1 089
Total assets 37 679 (28 919) (1 174) (6 348) 1 238
Equity and liabilities
Capital and reserves
Shareholders' equity 6 968 (6 348) 620
Current liabilities 30 711 (28 919) (1 174) 618
Accounts payable 196 196
Normal taxation payable 1 596 (1 174) 422
Shareholders for dividends 28 919 (28 919)
Total equity and liabilities 37 679 (28 919) (1 174) (6 348) 1 238
Notes:
(1) Represents the receipt of dividends receivable at 30 June 2001 and the
interim cash distribution of R2,05 per share paid in August 2001.
(2) Represents the funds received as settlement of the loan due from Peoples
Furnishers in terms of the refinance agreement, the realisation of assets
and the settlement of certain liabilities.
(3) Represents the advance liquidation dividend of 45 cents per share (14
106 671 shares in issue).
8. General meeting
A general meeting of CapeStar shareholders will be held at 10:00 on Tuesday,
8 January 2002 at the offices of Deloitte & Touche, Brookside, 11 Lansdowne
Road, Claremont to consider and, if deemed fit, to pass the ordinary and
special resolutions required to effect the disposal and the members'
voluntary winding-up.
9. Circular and withdrawal of cautionary announcement
A circular to CapeStar shareholders containing details of the disposal,
proposed voluntary winding-up, the delisting of CapeStar, the notice of
general meeting and a form of proxy will be posted to shareholders in due
course. Shareholders are advised that caution is no longer needed to be
exercised when dealing in CapeStar shares.
Johannesburg
12 November 2001
Corporate advisor and sponsor
Brait
Auditors and reporting accountants
Deloitte & Touche Chartered Accountants (SA)
(Registration number 1/0/21)
