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Shares For Cash And Withdrawal Of Cautionary Announcement
VESTACOR LIMITED
(Incorporated in the Republic of South Africa
(Reg No. 1996/017285/06)
("Vestacor")
(ISIN CODE : ZAE000018412)
(ALPHA CODE : VTR)
FASHION AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Reg No. 1944/017149/06)
("Fashaf")
(ISIN CODE : ZAE000016473)
(ALPHA CODE : FSH)
INTRODUCTION
Further to the cautionary announcement dated 8 November 2001, Vestacor
Corporate Finance is authorised to announce that an agreement has been
reached in terms of which Fashaf will raise R40 million by way of a specific
issue of shares for cash to Vestacor.
THE SPECIFIC ISSUE OF SHARES FOR CASH
Fashaf will issue 2 000 000 000 Fashaf shares to Vestacor at 2 cents per
Fashaf share. The issue price represents a discount of 38% to the weighted
average traded price over a 30-day period, prior to an agreement being
reached on 22 November 2001.
RATIONALE
The specific issue will enable Fashaf to expand its retail brands, which
include Dunns, Beaver Canoe and the newly introduced Millers brand. A
further expansion of the product offering is underway, through the
development of a home and personal division.
The management of Fashaf has undertaken extensive research into its market
segment and its customer base and is confident that the serving of this
customer base will lead to sustainable growth and therefore attractive
returns on these investments should be achieved for shareholders.
As Fashaf has been experiencing solvency and liquidity constraints, the
proceeds of this issue of shares for cash will considerably improve the
financial position of Fashaf.
FINANCIAL EFFECTS
Financial effects on Fashaf
The financial effects of the specific issue on Fashaf are
set out in the table below:
Before the After the Percentage
issue of issue of (%)
shares for shares for
cash (cents) cash(cents)
Earnings per share (2.0) (0.6) 70
Headline earnings
per share (2.0) (0.6) 70
Tangible net asset
value per share (1.5) 0.75 150
Intangible net asset
value per share (1.5) 0.75 150
Weighted number
of shares ('000) 1 112 746 3 112 746
The calculations have been based on:
- the published unaudited interim results of Fashaf for the six months
ended 31 August 2001;
- the assumption that the specific issue for cash was made on 1 March 2001;
the assumption that the proceeds of the specific issue were used to reduce
the interest bearing short term borrowings resulting in an interest saving
of 14.5% pa.
Financial effects on Vestacor
The financial effects of the specific issue on Vestacor
are set out in the table below:
Before the After the Percentage
issue of issue of (%)
shares for shares for
cash (cents) cash(cents)
Earnings per share 15.0 14.3 (5)
Headline earnings
per share 15.0 14.3 (5)
Tangible net asset
value per share 186 186 -
Intangible net asset
value per share 186 186 -
Weighted number
of shares ('000) 163 747 163 747
The calculations have been based on:
- the published unaudited interim results of Vestacor
for the six months ended 31 August 2001; and
- the assumption that the specific issue for cash was
made on 1 March 2001;
- the assumption that the consideration of R40 million was invested earning
6% after tax for the six months ended 31 August 2001.
CONDITIONS PRECEDENT
The specific issue is subject to approval by Fashaf shareholders, excluding
Vestacor as a related party to Fashaf.
DOCUMENTATION
A circular, containing details about the specific issue of shares for cash,
the acquisition of 33 Sportshoe World stores referred to in the announcement
dated
14 September 2001,and a notice convening a general meeting of the company
for the approval thereof, is in the process of being prepared and will be
sent to Fashaf shareholders on or about
14 December 2001.
A circular containing full details on the specific issue will be sent to
Vestacor shareholders on or about 14 December 2001.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated
8 November 2001, and are advised
that negotiations relating to a further acquisition have been terminated.
Accordingly the cautionary announcement relating to both the
recapitalisation and the further acquisition is hereby withdrawn.
Johannesburg
30 November 2001
Corporate Adviser & Co-Sponsor
Vestacor Corporate Finance
Investment Bank & Lead Sponsor
PSG Investment Bank
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