| Tue 7 May 2002, 0:00 | | Ame - Announcement |
|
African Media Entertainment Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
Share Code: AME ISIN: ZAE000014106
("AME" or the "company")
Disposal of the business conducted by Moonlighting Filmmakers (Proprietary)
Limited
and withdrawal of cautionary announcement
1. Introduction
Shareholders are referred to the cautionary announcement dated 30 January
2002 and are advised that the company has entered into an agreement ("the
Agreement") whereby the company will, subject to certain conditions
precedent including those set out in paragraph 4 below, dispose of the
entire business currently conducted by Moonlighting Filmmakers (Proprietary)
Limited ("Moonlighting") as a going concern ("the disposal"), to Newshelf
483 (Proprietary) Limited ("the purchaser"), a new company controlled by
Philip John Key, chief executive officer of Moonlighting. After
implementation of the disposal, the purchaser will change its name to
Moonlighting Filmmakers (Proprietary) Limited.
2. Rationale for the disposal
The company is continuing its programme of reducing its debt and its cost of
gearing through the repayment of debt by way of positive cash flows
generated from operations as well as proceeds from the disposal of non-core
assets, such as the business conducted by Moonlighting.
3. The disposal
3.1Terms of the disposal
Moonlighting, a wholly-owned subsidiary of AME Commercial Filmmakers
(Proprietary) Limited, which is wholly-owned by AME, has disposed of its
entire business as a going concern to the purchaser for a total
consideration of R10 239 564. The consideration is to be settled as follows:
* R3 500 000 in cash no later than the closing date, of which R2 550 000
has been paid on signature of the agreement;
* R639 564, being the price of 31 978 184 AME shares at 2 cents each
("specific share repurchase") on the closing date;
* R1 500 000 in cash on 31 May 2002;
* R250 000 in cash on 30 April 2003;
* R2 500 000 in cash on 31 May 2003;
* R250 000 in cash on 30 September 2003;
* R1 350 000 in cash on 31 May 2004; and
* R250 000 in cash on 30 September 2004.
The agreement contains limited warranties which are usually found in
agreements regarding transactions of this nature.
3.2 Related parties
Philip John Key, as chief executive officer of Moonlighting and controlling
shareholder of the purchaser, is a related party ("related party"). In terms
of the Listings Requirements of the JSE Securities Exchange South Africa
("JSE") ("Listings Requirements"), the resolution to approve the disposal
will be subject to a simple majority of votes of shareholders, other than
the related party, being cast in favour of the resolution. Furthermore, the
related party will not be taken into account in determining a quorum at the
general meeting.
3.3 Utilisation of the proceeds
Nedcor Bank Limited ("Nedbank") currently holds a cession of AME's debtors
as security for certain banking facilities granted by Nedbank to AME. AME
has agreed to cede the outstanding sale proceeds of R7 689 564 to Nedbank.
Consequently, as and when the sale proceeds are paid by the purchaser to
Nedbank, as set out in paragraph 3.1 above, AME's gearing will be
significantly reduced.
3.4 Effective date
The effective date of the disposal is midnight on 31 October 2001.
4. Conditions precedent
The conditions precedent of the Agreement include, inter alia:
4.1 approval by AME shareholders, in general meeting, of the disposal and
the specific share repurchase; and
4.2a fair and reasonable report on the disposal from an independent expert.
5. Financial effects of the Transactions
The table below sets out the financial effects of the disposal, based on the
results of AME for the year ended 31 October 2001.
Notes Before After Change
the the
disposal disposal
(cents) (cents) %
Earnings per share 1 0,03 0.69 2 200
Headline earnings per 1 1,13 0,93 (20)
share
Net asset value per share 2 3,13 4,09 31
Tangible net asset value 2 (2,08) (1,34) 36
per share
Number of shares in issue 3 779 524 747 545 (4)
(000's)
Notes:
1. It has been assumed that the disposal of Moonlighting was effective
throughout the 12 month period to 31 October 2001 and that the entire cash
proceeds were received on 1 November 2000, thus reducing the annual
financing charge.
2. Assuming the disposal of Moonlighting was effective on 31 October 2001.
3. Based on the repurchase and cancellation of 31 978 184 AME shares.
6. Circular to shareholders
A circular containing details of the disposal will be mailed to AME
shareholders in due course.
7.Withdrawal of cautionary announcement
Shareholders are advised that, with the publication of this announcement,
caution in dealing in AME's shares is no longer required.
Sandton
6 May 2002
Reporting accountants, auditors and independent advisors to
the company's shareholders
Charles Orbach and Company
Corporate advisor
and sponsor
Brait
Legal advisors
Werksmans Attorneys
Corporate advisor to the purchaser
CorpCapital Corporate Finance
Legal advisor to Purchaser
CorpCapital Transaction Support
