| Fri 19 Apr 2002, 0:00 | | Disposal Of The Local Authority Business Of Maxtec |
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Announcement
Maxtec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1998/004039/06)
Share code: MEC ISIN: ZAE000016721
("Maxtec" or "the Company")
DISPOSAL OF THE LOCAL AUTHORITY BUSINESS OF MAXTEC AND CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement published in the
press on Tuesday, 9 April 2002. The board of directors of Maxtec ("the
Seller") has resolved to dispose of the shares in and claims which the
Seller may have against Maxtec's wholly-owned subsidiaries that constitute
its local authority division which are listed below ("the disposal") to PB
van Schalkwyk, GH Nel, JH Bisschoff and JL Homann (collectively "the
Purchasers"). The disposal is subject to the fulfilment of certain
suspensive conditions, one of which has already been fulfilled.
The Purchasers have been or are currently involved in the activities of the
local authority division. The Purchasers will acquire, with effect from 1
May 2002 ("the effective date") the shares in and claims which the Seller
may have against the following companies:
* Maxtec Global Support Services (Pty) Ltd ("MGSS");
* Nyl-Data Computer Services (Pty) Ltd ("Nyl-Data");and
* African Financial Solutions (Pty) Ltd ("AFS"),
(collectively, "the local authority companies").
The main activities of the local authority division, housed within MGSS, are
the sale and support of the Finstel financial software system, and the
provision of hardware and network infrastructure to local authorities and
municipalities in South Africa and Namibia.
Prior to the effective date, the Consulting, Cad Cam and Data Storage
Support activities, currently also housed in MGSS, will be transferred to
another wholly-owned subsidiary, Maxtec Peripherals (Pty) Ltd.
2. RATIONALE FOR THE PROPOSED DISPOSAL
Originally, the local authority division was acquired to broaden Maxtec's
services and skills base. However, Maxtec's skills requirements now focus on
high-level technical data storage. Maxtec is therefore, as part of a group
restructuring, disposing of the non-core local authority division, allowing
management to concentrate on its data storage activities.
3. PURCHASE CONSIDERATION
The purchase consideration is the aggregate net asset value of the local
authority companies at the effective date, after taking into account
adjustments for the value of the computer software ("the adjusted NAV"). It
is expected that the adjusted NAV at the effective date, and thus the
purchase consideration will be R1,35 million ("the purchase consideration").
The purchase consideration is to be settled in full in cash on the first
business day after the date of fulfilment of the suspensive conditions ("the
closing date") of the agreement giving effect to the disposal ("the
agreement") as set out in paragraph 4 below. The purchase consideration will
be utilised in the working capital requirements of the company.
4. SUSPENSIVE CONDITIONS
The disposal is subject, inter alia, to the fulfilment of the following
suspensive conditions, of which 4.1 below has already been fullfilled:
4.1 the Purchasers depositing into a trust account an amount of R600
000 on or prior to the date of signature of the agreement;
4.2 the Purchasers depositing into a trust account an additional amount
of R750 000 within one business day of the date of signature of the
agreement; and
4.3 the Seller procuring the transfer of the Consulting,Cad Cam and
Data Storage Support activities to another wholly-owned subsidiary of
Maxtec, including the assets, liabilities and certain employees thereof,
prior to the effective date.
5. PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL ON A MAXTEC ORDINARY SHARE:
Before After Change
(cents) (cents) %
Loss per share (11.6) (9.4) 18.9%
Headline loss per share (7.2) (5.0) 30.4%
There are no material effects on the net asset value of Maxtec.
Notes:
1. For purposes of calculating loss per share and headline loss per share,
the
income statement of Maxtec, as contained in its audited financial statements
for the 12 months ended 31 August 2001, was used;
2. For purposes of calculating net asset value, the balance sheet of Maxtec,
as contained in its audited financial statements at 31 August 2001, was
used;
3. For purposes of calculating the effect on loss per share and headline
loss per share in the after column, it has been assumed that the disposal
was effective from 1 September 2000, and the aggregate purchase
consideration was settled in full on this date;
4. Interest, before tax, was earned at a rate of 10%.
5. The net loss after tax of the businesses which form the subject of the
disposal, was excluded for the purposes of calculating the financial effects
for loss per share and headline loss per share in the after column; and
6. The calculations were based on the number of fully diluted shares in
issue of 88,154,507.
6. CAUTIONARY ANNOUNCEMENT
Further to the terms announcement above, shareholders are advised that other
negotiations have been entered into and are still in progress which may have
an effect on the price of the company's shares. Accordingly, shareholders
are advised to continue exercising caution when dealing in the company's
shares until a further announcement is made.
Rivonia
18 April 2002
Corporate Advisor
Brait
Legal Advisor
Rabin, Van Den berg & Pelkowitz
Sponsor
Mettle Limited
