| Tue 20 Nov 2001, 0:00 | | Brimstone Investment Corporation Limited |
|
Registration number 1995/010442/06)
(Incorporated in the Republic of South Africa)
ISIN Number: ZAE000015277 Share Code: BRT
ISIN Number: ZAE000015285 Share Code: BRN
("Brimstone" or "the company")
Announcement regarding the disposal by Brimstone of the major portion of its
interest in Ocfish Holding Company Limited
1. Introduction
Further to the cautionary announcement published on 19 October 2001,
Brimstone, Septen Investments (Proprietary) Limited, a wholly owned
subsidiary of Brimstone ("Septen") and Tiger Brands Limited ("Tiger
Brands"), have concluded an agreement in terms of which Septen will,
subject to the fulfilment of the conditions precedent referred to in
paragraph 6 below, dispose of a 4,73% interest in Ocfish Holding Company
Limited ("Ochold") to Tiger Brands ("the disposal").
Ochold is the parent company of the listed Oceana Group Limited
("Oceana"), holding 49% of Oceana's total share capital. Prior to the
disposal, Brimstone and Septen held 2 939 226 "A" ordinary shares in
Ochold, representing 5,7% of Ochold's total issued share capital. As a
result of the automatic arrangements in place between the shareholders of
Ochold in terms of the Ochold shareholders agreement, the disposal will
not have an impact on the control position in Ochold of black economic
empowerment groupings and individuals, who will still control 50% of the
voting rights in Ochold.
2. Terms of the disposal
Septen will sell 2 460 000 "A" ordinary shares of R0,01 each in the
issued share capital of Ochold ("Ochold shares") to Tiger Brands for a
purchase price of R10,00 per Ochold share, with effect from the first
business day following a general meeting of shareholders of Brimstone
("general meeting") to approve of the disposal, which is required to be
convened in terms of the Listings Requirements of the JSE Securities
Exchange South Africa ("JSE"). The purchase price is to be settled cum
the final dividend declared by Ochold in respect of its financial year
ended 30 September 2001.
The purchase price of R10,00 per share represents a discount of 11,7% to
the see through value of Ochold as determined by its 49% shareholding in
Oceana and based on the 30 day volume weighted average Oceana share price
of R11,32 as at the date of signature of the agreement of sale, being 19
November 2001.
3. Rationale for the disposal
Brimstone originally acquired its investment in Ochold in 1995 as being
the first investment made by the company. Ochold is an unlisted company
which was established by Tiger Brands and an empowerment consortium led
by Real Africa Holdings Limited (including Brimstone) as a vehicle to
control Oceana.
The Ochold shares were acquired for R2,89 per share. Given this, and as
Brimstone holds a minority investment in an unlisted company with
uncertain exit potential, the disposal of the Ochold shares at R10,00 per
share, generating a compound return of 27% per annum, was viewed by the
board of the company as presenting a good opportunity for divestment.
Brimstone and Septen will continue to hold 479 226 "A" ordinary shares in
Ochold, equivalent to 0,9% of the total issued share capital of Ochold.
Brimstone will apply the proceeds of the disposal in the first instance
to settle all outstanding liabilities of the company. Thereafter, it is
anticipated that the remaining cash will be retained for investment into
new opportunities that are presently being identified and which will
complement Brimstone's desire to refocus its portfolio along defined
business lines and into operations where the company believes it can add
substantial value.
4. Irrevocable commitments
Shareholders holding, in aggregate, 20 682 823 ordinary and 13 178 799
'N' shares in the company, representing a total of 50,3% of the votes
entitled to be cast at the general meeting, have given irrevocable
commitments to vote in favour of the resolutions required to give effect
to the disposal.
5. Financial effects of the disposal
The table below indicates the pro forma financial effects of the disposal
based on the unaudited published interim results of Brimstone for the six
month period ended 31 March 2001. This information is provided for
illustrative purposes only.
Before After Percentage
the the change
disposa disposa after the
l l disposal
(cents) (cents) (%)
Earnings per share (5,5) 2,3 N/A
Headline earnings per 1,2 - (100,0)
share
Net asset value per 71,0 78,8 11,0
share
Notes:
1. The pro forma financial information under the column headed "After the
disposal" assumes the disposal was effected on 1 October 2000, Brimstone'
liabilities were repaid at that date and interest of 10% per annum was
earned on the cash balance.
2. The capital gain on the disposal of the Ochold shares is included in
the pro forma earnings per share calculation, but not in the pro forma
headline earnings per share calculation. This results in the pro forma
headline earnings per share being less than the earnings per share.
6. Conditions precedent
The disposal is subject, inter alia, to the fulfilment of the following
conditions precedent:
- the necessary regulatory approval being received from the JSE; and
- the approval of the ordinary and "N" ordinary shareholders of Brimsto
("shareholders") in general meeting.
7. Documentation
A circular, which is subject to the approval of the JSE, will be sent
to shareholders within 28 days from the date of this announcement. The
circular will contain details of the disposal and will incorporate the
notice of general meeting to shareholders.
Cape Town
21 November 2001
Sponsor
ENF Sponsors (Proprietary) Limited
(Registration number 2000/027636/07)
(A Sponsor registered with the JSE Securities Exchange South Africa)
Investment bank
Nedcor Investment Bank Limited
(Registration number 1955/003181/06)
Corporate law advisers and consultants
Edward Nathan & Friedland (Proprietary) Limited
(Registration number 1999/02646/07)
Joint auditors and reporting accountants
Deloitte & Touche
And
Gobodo Incorporated
