| Fri 3 May 2002, 0:00 | | Grintek Limited - Proposed Specific Pro Rata |
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Grintek Limited
(Registration number 1955/000013/06)
Share code: GNK ISIN: ZAE000003067
("Grintek Limited" or "the company")
Proposed specific pro rata repurchase and a general authority to repurchase
Grintek Limited ordinary shares ("repurchase programme")
1. Introduction
Investec Bank Limited is authorised to announce that Grintek Limited, and
or any subsidiary thereof ("Grintek") will make a specific offer to
repurchase Grintek Limited ordinary shares ("shares") from Grintek Limited
ordinary shareholders ("shareholders") pro rata to their ordinary
shareholding in Grintek Limited ("the pro rata offer"). Shareholders may
elect to tender further shares in excess of the pro rata offer
(collectively, "the specific repurchase").
The specific repurchase is subject, inter alia, to the approval of
shareholders, by way of a special resolution, in general meeting, in terms
of sections 85 to 89 of the Companies Act, 1973 (Act 61 of 1973) as amended
("the Act"), and the Listings Requirements of the JSE Securities Exchange
South Africa ("JSE").
In addition, the directors of Grintek Limited ("the directors") propose
that shareholders approve a directors' mandate to repurchase shares by way
of a general authority.
2. Rationale
The unbundling by Grintek Limited's holding company, Kunene Technology
Limited, of its entire shareholding in Grintek Limited, effective 6 May
2002, will introduce approximately 950 new shareholders to Grintek Limited.
To coincide with this event and to deploy a portion of Grintek Limited's
cash resources in an appropriate manner, the board has proposed a repurchase
programme, the effect of which should:
- enhance Grintek Limited's earnings and headline earnings per share; and
- increase the return on shareholders' equity.
3. Terms of the specific repurchase
In terms of the specific repurchase, Grintek will propose to acquire from
shareholders, pro rata to their shareholding, 25 023 611 shares in
aggregate, comprising approximately 8,5% of the issued ordinary share
capital of Grintek Limited. Shareholders may elect to tender further shares
in excess of the pro rata offer
The purchase price per share payable to shareholders in terms of the
specific repurchase is a payment of 240 cents per share, payable in cash.
The cash cost in respect of the price payable in terms of the specific
repurchase will be approximately R60 million, if 25 023 611 shares are
repurchased.
4. Conditions precedent
The specific repurchase is, inter alia, subject to the following
suspensive conditions which have not yet been fulfilled:
- the passing of the requisite resolutions by shareholders in general
meeting, approving the specific repurchase in accordance with the
requirements of the JSE and the Act; and
- obtaining the requisite approval of the JSE and the Securities Regulation
Panel, in so far as it may be required.
5. Salient dates relating to the implementation of the specific repurchase
2002
Specific repurchase offer opens Friday, 10 May
Last day to lodge forms of proxy for the
general meeting by 09:30 Wednesday, 29 May
General meeting to be held at 09:30 Friday, 31 May
Results of the General Meeting released on (SENS) Friday, 31 May
and in the press Monday, 3 June
Last day to trade in order to trade in the
specific repurchase Friday, 7 June
Shares trade "ex" the offer Monday, 10 June
Last day to lodge forms of surrender to accept the offer
in respect of certificated shareholders before 16:00 Wednesday, 12 June
Specific repurchase offer closes Wednesday, 12 June
Record date to participate in the specific repurchase Friday, 14 June
Results of the specific repurchase published Tuesday, 18 June
Cheques and balance share certificates, where applicable,
posted or cash electronically transferred to shareholders,
for the pro rata offer in respect of
certificated shareholders Tuesday, 18 June
Dematerialised shareholders will have their safe custody
accounts that they hold with their Central Securities
Depository Participant or broker credited and updated
statements will be issued in respect of both the pro rata
offer and any excess tender Tuesday, 18 June
Document(s) of title in respect of the excess tender
not accepted by the directors and/or balance certificates
in respect of the specific repurchase returned to
shareholders concerned, by registered post, at the risk
of shareholders, in respect of certificated shareholders Tuesday, 18 June
Subject to the acceptance of the directors, cheques in
respect of the excess tender will be mailed at the risk
of shareholders, or cash electronically transferred,
in respect of certificated shareholders Tuesday, 18 June
Share certificates may not be dematerialized or rematerialized between
Monday, 3 June and Friday 14 June 2002, both days inclusive.
The above dates and times are subject to amendment. Any such amendment will
be published in the press (Business Day and Beeld) and on the Stock Exchange
News Service ("SENS").
6. Financial effects of the specific repurchase
The financial effects of the specific repurchase on earnings headline
earnings and net asset value per share, before and after the specific
repurchase, are set out below:
Before After Change
(cents) (cents) %
Earnings per share 11,88 12,28 3,4
Headline earnings per share 12,35 12,80 3,6
Net asset value per share 126 115 (8,7)
The above calculations are based on 25 023 611 shares being repurchased, and
294 395 429 Grintek Limited shares in issue before the repurchase and 269
371 818 shares in issue after the repurchase.
Notes:
1. The calculation of the earnings per share, headline earnings per share
and net asset value per share in the "Before" column is based on the
unaudited published interim results of Grintek for the half year ended 31
December 2001;
2. The calculation of the earnings per share, headline earnings per share
and net asset value per share in the "After" column is based on the
unaudited published interim results of Grintek for the half year ended 31
December 2001 and the assumptions that shares were bought back on 1 July
2001 and income on cash balances foregone accrued at an average pre-tax rate
of 9% per annum.
7. Funding of the specific repurchase
The company intends making use of available cash resources to fund the
specific repurchase. The directors have satisfied themselves as to the
liquidity and solvency of the company for the 12-month period immediately
following the implementation date.
8. General authority to repurchase shares
The directors are seeking authorisation, subject to the provisions of the
Act and the rules and requirements of the JSE, to acquire ordinary shares in
the issued share capital of Grintek Limited from time to time.
9. Statement by directors
The directors of Grintek Limited have considered the effect of the
repurchase programme and are of the opinion that for a period of 12 months
following the date of this announcement:
- the company will be able in the ordinary course of business to pay its
debts;
- the consolidated assets of the company will be in excess of its
consolidated liabilities. For this purpose, the assets and liabilities will
be recognised and measured in accordance with the accounting policies used
in the latest audited annual group financial statements for Grintek Limited;
- the ordinary capital and reserves of the company will be adequate for the
company's requirements; and
- the working capital available to the company will be sufficient for the
company's requirements.
10. Irrevocable undertakings
Shareholders holding 50% of the 294 395 429 ordinary shares of Grintek
Limited have irrevocably undertaken to vote in favour of the special and
ordinary resolutions required to give effect to the repurchase programme.
Furthermore, shareholders holding 33% of the ordinary shares in Grintek
Limited have irrevocably undertaken to accept the pro rata offer.
11. General meeting
A circular to shareholders setting out details of the specific repurchase
and the general authority for directors to repurchase shares, and including
a notice of the general meeting and form of proxy will be posted to
shareholders on 10 May 2002.
In line with Grintek's policy to provide a quarterly update, the update
in respect of the quarter ended 31 March 2002 will be released in due
course.
Centurion
3 May 2002
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Securities Limited
Member of the JSE
(Registration number. 1972/008905/06)
