| Wed 13 Feb 2002, 0:00 | | Cycad - Last Day To Trade Announcement |
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CYCAD FINANCIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/008637/06)
JSE Share code: CYD ISIN: ZAE000017729
("Cycad")
Last Day To Trade Announcement
1. Introduction
Further to the cautionary announcement dated 21 January 2002, shareholders
are advised that the board of directors of Cycad has resolved to restructure
the Cycad group and raise approximately R30 million, before expenses, by way
of a renounceable rights offer with excess applications for new ordinary
shares in Cycad at an issue price of 10 cents per share ("rights offer").
Irrevocable commitments amounting to approximately R20 million have been
received in terms of the rights offer. These commitments include
undertakings from executive management and certain non-executive directors
to subscribe for and/or procure the subscription of Cycad ordinary shares to
be issued in terms of the rights offer to an amount of R10 million.
The rights offer is not underwritten and thus conditional upon a minimum
subscription of R20 million being received. This minimum subscription of R20
million has been secured through the abovementioned commitments.
2. Purpose of the restructuring and rights offer
The purpose of the restructuring and rights offer is to:
* streamline the group structure;
* reduce the annual operating costs by approximately R4 million;
* retire debt; and
* create a limited pool of capital to fund follow-on investments and
operating costs.
As a result of the restructuring, the Cycad group will essentially be a
listed closed-end investment holding company focused on harvesting its
existing portfolio of investments.
The restructuring encompasses streamlining:
* the group structure - by collapsing intermediary holding structures, where
appropriate and thereby eliminating Capital Gains Tax inefficiencies; and
* the group operations - thereby reducing operating costs and entering into
a management agreement with the existing executive management team at a
market-related management fee with no carried interest participation.
carried interest participation is the norm with management agreements of
this nature.
3. Salient terms of the rights offer
Cycad is raising approximately R30 million, before expenses, by way of a
renounceable rights offer of 300 172 649 new ordinary shares, at an issue
price of 10 cents per share.
Shareholders of Cycad recorded in the register as such on the record date,
will have the right to subscribe for 327 new shares at an issue price of 10
cents per share for every 100 shares held on the record date and make excess
applications.
The new ordinary shares to be allotted in terms of the rights offer will,
upon their issue, rank pari passu with the previously issued ordinary shares
of Cycad.
4. Last date to trade and record date for the rights offer and listing of
renounceable (nil paid) letters of allocation
In terms of the Listings Requirements of the JSE Securities Exchange South
Africa (the "JSE"), the last day to trade in the shares of Cycad on the JSE
is Friday, 1 March 2002, in order to be recorded as a shareholder of Cycad
by Friday, 8 March 2002 being the record date.
It is expected that the renounceable (nil paid) letters of allocation
("letters of allocation") will be listed on the JSE from the commencement of
trade on the JSE on Monday, 4 March 2002 on which date, the shares of Cycad
will trade ex-rights offer participation.
5. Financial effects of the rights offer
The table below sets out the financial effects of the rights offer, before
expenses, on the net asset value and loss/headline loss per share
attributable to shareholders at 30 June 2001, based on the assumptions noted
below:
Pro forma
Before after
rights offer rights offer Change
(cents)(1) (cents)(2) %
Net asset value per share (3) 116 35 (70)
Net asset value per share after the
post-balance sheet 50%
general provision (4) 58 21 (63)
Loss/Headline loss per share 62 11 83
Number of ordinary shares in issue 91 795 917 391 968 566 327
Notes:
(1) The net asset value and loss/headline loss per share in the "before"
column are as per Cycad's published audited results for the year ended 30
June 2001.
(2) The net asset value and loss/headline loss per share in the pro forma
"after" column take into account the effect of the rights offer on the net
asset value per share, on the assumptions that the entire rights offer, was
allocated and issued on 30 June 2001 and on the loss/headline loss per share
on the assumption that the rights offer was effective from 1 July 2000 and
the funds raised were used to generate interest income at an after-tax rate
of interest of 7%.
(3) The net asset value is based on the directors' valuation in accordance
with Cycad's accounting policies, whereby investments are held at cost for
the first two reporting periods (with provisions being made for any
permanent impairment of value) and are thereafter revalued to fair value.
These valuations assume that investments are held until maturity on a going
concern basis.
(4) In September 2001, the board resolved to create a general provision for
a potential diminution of 50% of the directors' valuation at 30 June 2001.
This decision was based on current market conditions and specifically the
volatility surrounding the valuation of young technology companies. This
post-balance sheet general provision highlights the effects of realising
investments prematurely in the current market and consequently no adjustment
has been made to the group financial statements.
6. Conditions precedent to the rights offer
The rights offer is subject to the following conditions precedent, namely:
* the granting by the JSE of listings for the letters of allocation
pertaining to the new ordinary shares comprising the rights offer as well as
the new ordinary shares which are the subject of the rights offer;
* the registration and/or approval by the Registrar of Companies of all
documents in regard to and associated with the rights offer and the granting
of all pertinent legal and regulatory appovals to the extent necessary; and
* receiving a minimum subscription of R20 million.
7. Dematerialisation
Shareholders of Cycad are reminded that the JSE recently introduced the
STRATE share settlement system for all share transactions and other JSE-
related share actions concluded on the JSE. STRATE, which, inter alia,
involves the dematerialisation of share certificates and/or other documents
of title in favour of electronic record, has already been implemented by
Cycad.
In this regard, shareholders of Cycad who have not as yet arranged for the
dematerialisation of their share certificates and/or other documents of
title to shares in Cycad, are encouraged to do so as soon as possible as the
letters of allocation to be issued pursuant to the rights offer will, in
themselves, need to be dematerialised prior to their being capable of being
traded on the JSE upon their listing.
8. Further announcement
A further announcement is expected to be published on or about Wednesday, 20
February 2002 confirming all pertinent dates and times relevant to the
rights offer and any other matters relevant thereto.
Johannesburg
13 February 2002
Investment bank
Nedcor Investment Bank
Sponsor
Deutsche Securities
Member of the Deutsche Bank Group
Deutsche Securities (SA) (Proprietary) Limited
(Registration number 1995/011798/07)
Corporate law advisers and consultants
Edward Nathan & Friedland (Pty) Ltd
Attorneys
Werksmans Incorporated
Auditors and reporting accountants
Fisher Hoffman PKF (Jhb) Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration number 1994/001166/21)
