Offer And A Suspension Of Unifer's Shares
UNIFER HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/010061/06)
(Share code: UNF ISIN: ZAE000027504)
("UNIFER")
ANNOUNCEMENT REGARDING A PROFIT WARNING, A RIGHTS OFFER AND A SUSPENSION OF
UNIFER'S SHARES
1. PROVISIONS FOR BAD AND DOUBTFUL ADVANCES
Subsequent to the release of the interim results of UniFer in November 2001,
information has recently become available which has necessitated the
directors to further investigate the advances book with reference to bad and
doubtful advances. UniFer's audit committee accordingly requested
comprehensive independent investigations to ascertain the extent of this
deterioration and its causes.
The abovementioned process has resulted in the detection of a material
deterioration in the debtors book of UniFer and it has become apparent that
the provisions raised in respect of UniFer's advances book have been
materially insufficient.
This deterioration has been caused by the high level of growth in advances,
the uncertainty regarding the use of the centralised payroll deduction
system of the South African Government (Persal) and is also symptomatic of
the changing micro-lending business environment.
Detailed investigations to review the recoverability of the abovementioned
advances book are still proceeding, and the process to quantify the
provisions required is still underway. The directors of UniFer expect to
have the required provisions quantified within thirty days of the date of
this announcement.
2. PROFIT WARNING
The abovementioned will result in significant losses for the six month
period ending 31 March 2002. Shareholders are accordingly advised to
exercise caution when dealing in UniFer shares until a further announcement
is made.
3. UNIFER RIGHTS OFFER
The increase in the provisions will have a significant effect on the
solvency of UniFer, and the directors of UniFer have resolved that a
recapitalisation of UniFer is necessary.
As soon as the full extent of the required provisioning has been determined
in terms of the process outlined above, UniFer will, subject to all
regulatory approvals being given, undertake a rights offer for an amount
that will ensure that UniFer meets the capital adequacy requirements as
determined by the Banks Act (being 10%), and at an issue price based on the
net asset value of UniFer after taking into account the once-off provisions
required, provided that if the net asset value per share is negative, the
rights offer will be undertaken at 1 cent per share.
An independent adviser will be appointed to express an opinion on the fair
and reasonableness of the net asset value per share, as determined by the
directors.
Full details and the timetable in respect of this rights offer will be
released together with information regarding the quantification of the
provisioning required in due course.
4. ABSA'S COMMITMENT TO UNIFER
Shareholders and depositors are advised to refer to Absa's announcement,
wherein Absa has undertaken to support UniFer throughout the entire rights
offer process by agreeing to follow its own rights entitlement, by
underwriting the remainder of the rights offer and by providing support to
depositors and the necessary liquidity to UniFer during this period, should
it be required.
5. SUSPENSION OF UNIFER SHARES
Given the anticipation of losses, UniFer has applied and the JSE Securities
Exchange South Africa has agreed to a suspension of UniFer'shares until
clarity regarding the financial position of UniFer has been reached and a
full announcement regarding the terms of the rights offer can be made.
Johannesburg
15 January 2002
Merchant Bank to the transaction Absa Corporate Finance
Sponsor Barnard, Jacobs and Mellett
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