| Tue 23 Apr 2002, 0:00 | | Ifanet Limited - Announcement |
|
IFAnet Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1995/006144/06)
JSE code: IFA ISIN number: ZAE000035762)
("IFAnet" or "the company")
SPECIFIC ISSUE OF SHARES FOR CASH;
CHANGE OF CONTROL; and
APPOINTMENT OF DR BRIAN BENFIELD AS A DIRECTOR
Introduction
LPC Manhattan Sponsors (Pty) Ltd is authorised to announce that in order to
accommodate the growth of the company it has been decided by the directors
to propose to shareholders a further specific issue of shares for cash.
Agreements have been reached whereby, subject to certain conditions
precedent:
- Dr Brian Benfield will subscribe for 1 516 000 000 new ordinary shares
in the capital of the company at a price of 0.5 cent per share, to raise
R7.58 million in new working capital by way of a specific issue of shares
for cash. Subject to a favourable fair and reasonable opinion, Dr Benfield
will also have the option to subscribe for a further 500 000 000 shares in
the company at 1 cent each in the event of certain profit targets being met
within five years.
- Dr Benfield will also acquire 84 000 000 shares from Arcay Group
Limited, whose previously interest free R2.5 million loan to IFAnet will
become interest bearing, at prime, and will be repaid in three equal
installments from the proceeds of the issue of new shares to Dr Benfield.
Dr Benfield has granted Arcay an option over 100 million IFAnet shares at
1.0 cent per share.
This will constitute Dr Benfield as IFAnet's controlling shareholder. In
terms of the agreement, Dr Benfield will be employed by the company as CEO,
for no consideration, for two years.
Conditions precedent
The agreements are subject to the approval of shareholders in general
meeting; the JSE Securities Exchange South Africa ("JSE"); and the
Securities Regulation Panel ("SRP"). The agreements are also subject to the
waiver of a mandatory offer by minority shareholders and the election of Dr
Benfield as a director of the company.
Financial effects
The table below sets out the pro forma financial effects of the issue of
shares adjusted for the repayment of the loan to Arcay. These financial
effects are based on the unaudited results for the six months to 30 October
2001, adjusted for the specific issue of shares approved by shareholders on
15 January 2002 and for the specific issue currently contemplated. It has
been assumed that interest paid at 14% per annum was saved on outstanding
loans including the loan to Arcay and that positive cash balances earned
interest at 8% per annum. It has further been assumed that no tax was
payable as the company was in a loss situation.
IFAnet After specific After new Change
(unaudited) issue of shares specific (%)
six months to approved on issue of
30/10/2001 15/01/2002 shares
(cents) (cents) (cents)
Net asset value
and net (8.62) 0.20 0.39 +95.0
tangible asset
value per share
Headline loss (2.35) (0.21) (0.08) +96.6
per share
Loss per share (2.35) (0.21) (0.08) +96.6
Dr Benfield
Dr Benfield was appointed CEO of AA Life at the age of 32, thereby becoming
the youngest South African insurance chief executive. In 1992, Dr Benfield
founded a new life assurance business, which was listed as The Clientele
Life Assurance Company Limited on the JSE in September 1997. Toward the end
of 2001, the Hollard Insurance Group acquired his family interest in
Clientele. He is presently visiting professor, Insurance and Risk Management
in the Faculty of Commerce, Law and Management at The University of the
Witwatersrand, is joint chairman of the Board of Examiners of the Insurance
Institute of SA and is Chairman of the executive committee of the Free
Market Foundation of Southern Africa.
In a life insurance career of nearly 30 years, Dr Benfield has achieved
remarkable success and created substantial shareholder wealth.
Offer to minorities
The SRP has agreed that minority shareholders may vote, in terms of Rule 8.7
of the Securities Regulation Code on Takeovers and Mergers ("the Code"), to
waive their right, in terms of Rule 8.1 of the Code, to a mandatory offer.
As such waiver is a condition precedent, no guarantee has been furnished to
the SRP.
Documentation and shareholders' meeting
Full details of the agreement and notice of a general meeting will be
contained in a circular to shareholders, which is expected to be posted
within 28 days.
Johannesburg
24 April 2002
Sponsor
LPC Manhattan Sponsors (Pty) Ltd
