| Wed 23 Jan 2002, 0:00 | | Mathomo - Proposed Restructuring And Cautionary An |
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Mathomo Group Limited
(Registration number 1995/004783/06)
Share code MTO ISIN ZAE000010542
("Mathomo" or "the Company")
Proposed restructuring and cautionary announcement
1. Introduction
The Board of Directors of Mathomo ("the Board") is pleased to announce a
restructuring plan which, once implemented, will, in its opinion, place
Mathomo on an improved financial and business footing with better organic
growth prospects and enable management to focus exclusively on the Company's
core operations ("the restructuring").
Mathomo initially comprised 100 retail outlets in the mining and related
industries and a clothing brand management and outsourcing company. After
its listing in 1996, Mathomo acquired certain businesses in the stationery,
footwear, workwear and protective clothing industries in order to diversify
its activities and reduce its reliance on the mining sector. Furthermore,
the Company initiated new businesses for the supply of workwear to the
mining industry on an outsource basis and the provision of financial
products to mineworkers through its distribution network. Simultaneously,
Mathomo continued with its efforts to build synergies between its retail
sites and its clothing brand management and outsourcing company.
The diversification into the stationery and footwear businesses was
unsuccessful and has adversely affected the Company. The Board has decided
that the Company should focus exclusively on those businesses where it has a
competitive advantage and compelling business case, and where the existing
management team can add value.
2. The restructuring
The restructuring entails, inter alia, the consolidation of certain
operations, the disposal of non-core assets, a recapitalisation of the
Company, a reconstitution of the Board, a change in management and the
flattening of group reporting structures in order to streamline the business
and reduce head office and other costs. The restructuring will, subject to
shareholder approval, also entail the consolidation of the share capital of
the Company on a 10 for one basis ("the consolidation"). In the Board's
view, the restructuring is in the interests of Mathomo shareholders,
customers, suppliers and staff.
3. The recapitalisation of the Company
As part of the restructuring, the Board has resolved to recapitalise the
Company. In this regard, R20 million will be raised and thereafter utilised
to reduce the Company's debt and to provide working capital facilities for
future operations ("the recapitalisation").
The recapitalisation will be implemented by way of a rights offer, which
will be undertaken at 50 cents per share if the consolidation is approved by
shareholders or at 5 cents per share if the consolidation is not approved by
shareholders. The recapitalisation will be underwritten by The Standard Bank
of South Africa Limited ("Standard Bank"), subject to the fulfilment of
certain conditions precedent, including:
- Mathomo shareholders approving an increase in the authorised share
capital of the Company from 100 000 000 ordinary shares of 0,1 cent each, to
1 000 000 000 ordinary shares of 0,1 cent each and approving all other
resolutions necessary to effect the recapitalisation;
- the approval of the JSE Securities Exchange, South Africa;
- the approval of the Securities Regulation Panel ("SRP");
- the approval of the South African Reserve Bank;
- the approval of the Registrar of Banks;
- the registration of the rights offer and related documents and the
necessary special resolutions by the Registrar of Companies;
- any other approvals necessary for the implementation of the
recapitalisation; and
- the implementation of the recapitalisation by 30 April 2002.
4. undertakings
Mineworkers Investment Company (Proprietary) Limited ("MIC"), which owns
34,5% of the issued share capital of Mathomo, and Charne Investments
(Proprietary) Limited and related parties, which own 16,5% of the issued
share capital of Mathomo, have undertaken to vote in favour of the
resolutions necessary to implement the recapitalisation.
MIC has also irrevocably undertaken to follow its rights in terms of the
rights offer and to apply for additional shares, in excess of its
entitlement, in order to take up 35% of the shares issued pursuant to the
rights offer. This will result in MIC investing a further R7 million in
Mathomo, thereby increasing its stake in the Company to 34,9%.
5. SRP waiver
The underwriting of the recapitalisation is integral to the restructuring
and may result in Standard Bank owning more than 35% of the Company if
shareholders, other than MIC, elect not to follow their rights pursuant to
the rights offer. In this event, the SRP has ruled that Standard Bank shall
not be obliged to make a mandatory offer to shareholders.
6. Further announcements
Further information, together with the results for the year ended 30
September 2001, will be released prior to 8 February 2002. Accordingly,
Mathomo shareholders are advised to exercise caution when dealing in their
shares until a further announcement is made.
Johannesburg
23 January 2002
Merchant bank and sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Attorneys
Feinsteins Attorneys
(Registration number 1995/001716/21)
