| Thu 15 Nov 2001, 0:00 | | Powertech/altron - Detailed Terms Announcement |
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Detailed terms announcement regarding the proposed disposal by Power
Technologies Limited and Allied Electronics Corporation Limited of their
shareholdings in Voltex Holdings Limited to The Bidvest Group Limited
POWER TECHNOLOGIES LIMITED ALLIED ELECTRONICS
(Incorporated in the Republic CORPORATION LIMITED
of South Africa) (Incorporated in the Republic
(Registration number of South Africa)
1946/022346/06) (Registration number
Share Code: POW 1947/024583/06)
ISIN No: ZAE000015640 Share Code: ATN
("Powertech") ISIN No: ZAE000029658
("Altron")
Proposed disposal by Powertech and Altron of their shareholdings in Voltex
Holdings Limited to The Bidvest Group Limited
Introduction
Powertech and Altron shareholders are referred to the announcement by The
Bidvest Group Limited ("Bidvest") published simultaneously with this
announcement which inter alia, subject to the conditions precedent described
in paragraph 4, sets out the intention by Bidvest to submit a proposal ("the
proposal") to shareholders of Voltex Holdings Limited ("Voltex") to acquire
all their Voltex shares such that Voltex will become a wholly-owned
subsidiary of Bidvest.
Powertech owns 38 133 212 shares in Voltex (a 28,8% shareholding) and Altron
owns 4 249 015 shares in Voltex (a 3,2% shareholding).
Powertech and Altron have entered into an agreement with Bidvest in terms of
which Powertech and Altron have agreed to support the proposal and, should
the proposal become unconditional, have irrevocably undertaken to dispose of
their shares in Voltex to Bidvest ("the disposal").
Rationale for the disposal
Powertech's shareholding in Voltex arose largely from the 1998 restructure
of the cable and related manufacturing and electrical distribution
activities of Powertech and Voltex. Whilst the relationship between
Powertech and Voltex remains strategic to both parties in light of their
trading relationship, Powertech and Altron do not believe that it is
necessary to maintain a shareholding in Voltex. The disposal also forms part
of a broader strategy to simplify the Altron group structure.
The strategic trading relationship between Powertech and Voltex will
continue and in this regard Powertech and Altron have undertaken to Voltex,
in terms of a restraint agreement, not to compete with the Voltex
distribution business for a period of three years for which Powertech will
receive R3 million. In terms of this agreement the undertaking by Voltex not
to compete with the Powertech cable manufacturing business contained in the
1998 restructure has been expanded and extended for a period of three years.
Material terms of the disposal
It is anticipated that a cash distribution of 100 cents per Voltex share
will be payable to Voltex shareholders by way of a capital repayment during
December 2001 ("the capital repayment").
The effective date of the disposal is 1 October 2001 ("the effective date")
and is for a consideration of 340 cents per share ("the consideration")
reduced by the proposed capital repayment. The consideration less the
capital repayment will be increased if it is paid after 1 February 2002 by
an amount that will compensate Voltex shareholders for loss of interest.
The disposal will result in an aggregate receipt of R129,7 million by
Powertech and R14,4 million by Altron.
Conditions precedent to the disposal
The disposal is conditional, inter alia, upon the following:
the approvals, insofar as may be necessary, of the appropriate documentation
by the JSE Securities Exchange South Africa, the Securities Regulation Panel
and the Exchange Control Division of the South African Reserve Bank;
the approval of the proposal by the relevant authorities in terms of the
Competition Act (Act 89 of 1998), as amended; and
the approval of the proposal by the required majority of Voltex shareholders
to enable Bidvest to acquire all the Voltex shares which it does not already
own. Bidvest may waive fulfilment of this condition.
Financial effects
The table below sets out the pro-forma effects of the disposal on the basic
earnings, headline earnings and net asset value of Powertech:
Notes Before After Percentag
Cents per Cents per e change
share share %
Basic earnings 1 18,2 13,6 (25,3)
Headline earnings 2 21,6 20,1 (6,9)
Net asset value 3 469,8 465,2 (1,0)
Notes:
The "Before" column is the unaudited basic earnings per Powertech share
calculated on the weighted average of 266,6 million shares in issue for the
6 months ended 31 August 2001. The "After" column reflects the pro forma
basic earnings per Powertech share assuming the disposal was effective on 1
March 2001 and adjusted for:
the consideration and the restraint payment earning interest at a rate of
6,0%, being the average after-tax interest rate earned by Powertech on cash
resources for the 6 months ended 31 August 2001; and
the exceptional write-down of R17,5 million that results from the
combination of the receipt of the restraint payment, and Powertech's
carrying value per Voltex share at 1 March 2001 exceeding the consideration.
The "Before" column is the unaudited headline earnings per Powertech share
calculated on the weighted average of 266,6 million shares in issue for the
6 months ended 31 August 2001. The "After" column reflects the pro forma
headline earnings per Powertech share assuming the disposal was effective on
1 March 2001 and adjusted for the consideration and the restraint payment
earning interest at a rate of 6,0%, being the average after-tax interest
rate earned by Powertech on cash resources for the 6 months ended
31 August 2001.
The "Before" column is the unaudited net asset value per Powertech share
calculated on the net 266,7 million shares in issue at 31 August 2001. The
"After" column reflects the pro forma net asset value per Powertech share
assuming the disposal was effective 1 March 2001 and adjusted for the items
referred to in Note 1.
Johannesburg
15 November 2001
Investment bank and joint sponsor Corporate law advisors and
consultants Joint sponsor
Nedcor Investment Bank Limited Edward Nathan & Friedland (Pty) Limited
ENF Sponsors (Pty) Limited
