| Tue 14 May 2002, 0:00 | | Disposal Of Maxtec`s 20% Shareholding In Sagitta |
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DISPOSAL OF MAXTEC`S 20% SHAREHOLDING IN SAGITTA AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Maxtec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1998/004039/06)
Share code: MEC ISIN: ZAE000016721
("Maxtec" or "the Company")
1. Introduction
Shareholders are referred to the cautionary announcement published on
Friday, 19 April 2002. The board of directors of Maxtec ("the Seller") has
resolved, subject to shareholder approval, to enter into an agreement in
terms of which Maxtec will dispose of its effective 20% shareholding in
United Kingdom ("UK") based Sagitta Performance Systems Limited ("Sagitta")
("the agreement") which comprises of:
* 21,288 A shares (20.0% of A shares)
* 3,000 B shares (17.7% of B shares)
* 5,500 C shares (15.2% of C shares)
(collectively "the shares" and effectively 20% of Sagitta`s equity)
to Sagitta ("the proposed disposal"). Sagitta will purchase the shares by
way of a share buyback and will simultaneously cancel the shares.
Sagitta is a vendor independent storage solutions provider, with its main
activities being data assessment and profiling, storage planning, storage
design, storage implementation, project management and the provision of
storage support services. Sagitta is based in England, UK and targets the UK
and European storage and storage area networking (SAN) market.
2. Rationale for the proposed disposal
The proposed disposal of Maxtec`s shareholding in Sagitta is in line
with its stated objective of restructuring the group to focus on its core
business of data storage distribution in Southern Africa. The proceeds from
the disposal will eliminate all gearing and strengthen the Maxtec balance
sheet considerably.
3. Purchase consideration
The purchase consideration is GBP 500,000, approximately R7,590,000
("the purchase consideration") (see note 5 below). The purchase
consideration is to be settled in full in cash on the date of signature of
the final agreement ("closing date"). The consideration will eliminate
Maxtec`s debt and also be utilised to enhance the working capital
requirements of the company.
4. Pre-conditions of signing the agreement
Shareholders are advised that as a consequence of a portion of the
purchase consideration being paid out of the share capital of Sagitta, UK
company law requires various approvals before the agreement can be signed,
one of the requirements being the approval of the disposal by Maxtec
shareholders in general meeting.
5. Pro forma financial effects of the disposal on a Maxtec ordinary share:
Before After Change
(cents) (cents) (%)
Loss per share (2.7) (2.9) (8.1%)
Headline loss per share (2.5) (2.7) (8.7%)
Net asset value 23.2 26.5 14.2%
Tangible Net asset value 19.3 22.6 17.0%
Notes:
1. For purposes of calculating loss per share and headline loss per share,
the income statement of Maxtec, as contained in its published unaudited
interim report for the 6 months ended 28 February 2002, was used;
2. For purposes of calculating net asset value and tangible net asset value,
the balance sheet of Maxtec, as contained in its published unaudited interim
report at 28 February 2002, was used;
3. For purposes of calculating the effect on loss per share, headline loss
per share, net asset value and tangible net asset value, in the after
column, it has been assumed that the disposal was effective from 1 September
2001, and the aggregate purchase consideration was settled in full on this
date;
4. Interest, before tax, was earned at the average 6 month Negotiable
Certificate of Deposit rate between 1 September 2001 and 28 February 2002 of
10%, whilst normal South African Income Tax was payable at a rate of 30%;
5. For purposes of converting British pounds (GBP) to South African rands
(R), the exchange rate as quoted in the Business Day at 13 May 2002 of
R15.18 per GBP1, was used;
6. The equity accounted net profit after tax of the business which forms 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
7. The calculations were based on the number of fully diluted shares in
issue of 88,154,507.
6. Opinions, recommendations and undertakings
The directors of Maxtec have considered the terms and conditions of the
disposal and unanimously recommend that Maxtec shareholders vote in favour
of the disposal at the general meeting. The directors intend voting the
shares under their control in favour of the resolution necessary to
implement the disposal.
Irrevocable undertakings, to vote in favour of the disposal, have been
obtained from more than 51% of Maxtec shareholders.
7. Documentation
A circular containing details of the proposed disposal will be mailed to
Maxtec shareholders in due course.
8. Withdrawal of cautionary announcement
Subsequent to this announcement, shareholders are no longer required to
exercise caution when dealing in Maxtec shares.
Rivonia
14 May 2002
Corporate advisor Legal Advisors Sponsor
Brait Rabin van den Berg Mettle Limited
& Pelkowitz
