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Control Instruments - Redemption of Preference Shares In Rhomberg and
Repayment of Loan Account
CONTROL INSTRUMENTS GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1964/003987/06)
Share code: CNL
ISIN code: ZAE000001665
(`Control Instruments` or `the group`)
redemption of preference shares held in RHOMBERG ELECTRONICS (PROPRIETARY)
LIMITED AND REPAYMENT OF LOAN ACCOUNT
In line with Control Instruments` stated intention to dispose of its non-
core businesses and enhance its focus on its core electronics businesses,
shareholders are advised that Control Instruments has entered into an
agreement with Rhomberg Electronics (Proprietary) Limited (`Rhomberg`)
whereby Rhomberg will:
redeem all the preference shares in Rhomberg, which are currently held by
Control Instruments Holdings Limited, a wholly owned subsidiary of Control
Instruments; and
repay its loan account of R2 million with Control Instruments Holdings
Limited, in return for which Control Instruments will:
obtain 50% of the ordinary shares in Aquapay (Proprietary) Limited
(previously a subsidiary of Rhomberg), a company which owns the intellectual
property of the `Ecowater` prepaid water meter, with Rhomberg owning the
remaining 50%; and receive an amount of US$1 000 000, which will be settled
as follows:
US$700 000 with immediate effect;
US$150 000 on 1 May 2003; and
US$150 000 on 1 November 2003.
The effective date of the transaction is 1 May 2002.
The proceeds will be used to fund the group`s working capital requirements.
Financial effects of the transaction
Had the transaction been effective from 1 January 2001, the pro forma
financial effects on the group`s earnings and headline earnings per share
for the year ended 31 December 2001 would have been as follows:
Audited
31 Dec Pro forma %
2001 After Change
Before
Earnings per share (cents) (10.63) (10.01) 5.8%
Headline earnings per share (6.66) (6.04) 9.3%
(cents)
Weighted number of shares in 88 486 88 486 -
issue (000s)
Notes
The pro forma financial effects of the transaction have been prepared for
illustrative purposes only and may not give a true reflection of Control
Instruments` financial position after the transaction. The pro forma
financial effects are based on the following assumptions:
the "Before" figures are extracted from the audited financial statements of
Control Instruments for the year ended 31 December 2001; and
the US$1 000 000 (converted at an exchange rate of 1US$ = R9.80) was
received by Control Instruments on 1 January 2001 and was placed on call at
an after tax interest rate of 5,6% per annum.
The transaction has no material impact (i.e. less than 3%) on the net asset
value and tangible net asset value of the group at 31 December 2001.
Cape Town
7 June 2002
Sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Date: 07/06/2002 02:57:00 PM Produced by the SENS Department
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