| Fri 14 Jun 2002, 0:00 | | Further Announcement Regarding The Acquisition By |
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Further Announcement Regarding The Acquisition By Brainware of SELCO
BRAINWARE Limited
Registration number 1997/006894/06
Share code: BRW
ISIN code: ZAE000018289
("Brainware")
FURTHER ANNOUNCEMENT REGARDING THE ACQUISITION BY BRAINWARE OF SOUTHERN
ELECTRICITY COMPANY (PROPRIETARY) LIMITED ("SELCo")
Introduction
Brainware shareholders are referred to the announcement dated 25 April 2002
relating to the above and the further cautionary announcement dated 27 May
2002.
Quaestor Capital (Proprietary) Limited is authorised to announce that a
final agreement ("the acquisition agreement") has now been concluded between
Resource Management Integration Group (Proprietary) Limited and RMMS
Consulting (Proprietary) Limited (collectively "the vendors"), SELCo and
Brainware (collectively "the parties"), in terms of which Brainware will
acquire the entire issued share capital of SELCo with effect from 1 July
2002 ("the acquisition").
Variation of previously announced terms
In terms of the acquisition agreement, certain substantive terms of the
original memorandum of understanding ("the MOU") dated 22 April 2002 were
varied as follows:
* the territory in which SELCo will operate, which previously comprised
Namibia only, was expanded to comprise the entire African continent ("the
expanded territory");
* the consideration payable by Brainware, previously comprising the
immediate issue of Brainware ordinary shares representing 50,01% of the
issued ordinary share capital of Brainware and certain convertible
preference shares that, on conversion into ordinary shares based on the
attainment by SELCo of an agreed profit warranty ("the vendors` profit
warranty"), would result in the vendors holding approximately 72,5% of the
then issued ordinary share capital of Brainware, now comprises the immediate
issue of such number of Brainware shares ("the consideration shares") that
would cause the vendors to hold 74,9% of the issued ordinary share capital
of Brainware; and
* the directors of Brainware, after having commissioned and evaluated an
in-depth due diligence review of the affairs and prospects of SELCo, and
having reached a satisfactory conclusion regarding the substance of SELCo`s
medium to long-term prospects in respect of the expanded territory, have
unanimously decided to dispense with the vendors` profit warranty.
The remaining terms of the MOU, including the remaining suspensive
conditions precedent, as set out in the ensuing paragraph, have
substantially been retained in the acquisition agreement.
Remaining suspensive conditions precedent
The implementation of the acquisition is, following the conclusion of
reciprocal due diligence reviews and the approval of the acquisition by
SELCo`s shareholders, subject to the following remaining suspensive
conditions precedent:
the obtaining of statutory and regulatory approvals, including Brainware
shareholders` approval and approvals by the JSE Securities Exchange South
Africa ("the JSE") and the Securities Regulation Panel ("the SRP");
the JSE granting approval for the continued listing of Brainware, the
transfer of the listing from the "Cash Companies" sector to the Venture
Capital Market of the JSE List ("the specific approvals") and the listing of
the consideration shares (shareholders are advised, in terms of rule 9.28 of
the JSE Listings Requirements, that there is uncertainty as to whether
Brainware will obtain the specific approvals, as the acquisition has to
comply with the listings criteria applicable to a new listing); and
* the SRP granting a dispensation in terms of rule 8.7 of the Securities
Regulation Code on Takeovers and Mergers, in terms of which the vendors will
not be required to make a mandatory offer to Brainware shareholders provided
independent shareholders waive the making of such mandatory offer in general
meeting.
Revised financial effects of the acquisition
The pro forma financial effects of the acquisition on a Brainware
shareholder (for illustrative purposes only) have, as a result of the
variations referred to in the previous paragraph, been revised as set out
below. These effects are based on the unaudited annualised results of
Brainware for the 6 months ended 31 December 2001 and the unaudited results
of SELCo for the 12 months ended 28 February 2002. Shareholders` attention
is drawn to the fact that the historical results of SELCo do not include the
full effects of the long-term electricity distribution agreements, full
details of which will be included in the circular to shareholders referred
to in the final paragraph of this announcement, that have recently been
concluded.
A B C D
Before After the After the % Change7
(cents) consolidation, consolidation
before the and the
acquisition acquisition
(cents) (cents)
Earnings per
share1 0.1 2.53 -3,45 -236,0
Headline
earnings per
share1 0.1 3.23 -3,25 -200,0
Net asset value
per share2
1.2 59.34 20,96 -64,8
Net tangible
asset value per
share2 1.2 59.34 20,9 -64,8
Notes:
1: The effect on earnings and headline earnings per share was calculated
on the assumption that the proposed 1-for-50 consolidation of Brainware`s
share capital ("the consolidation") and acquisition were effected on 1 July
2001.
2: The effect on net asset value and net tangible asset value per share
was calculated on the assumption that the consolidation and acquisition were
effected on 31 December 2001.
3: Based on 7 729 518 ordinary shares in issue during the period 1 July
2001 to 31 December 2001.
4: Based on 7 729 518 ordinary shares in issue at 31 December 2001.
5: Based on 30 794 892 ordinary shares in issue during the period 1 July
2001 to 31 December 2001 and assuming the estimated costs associated to the
implementation of the acquisition ("transaction costs") have been written
off against share premium.
6: Based on 30 794 892 ordinary shares in issue at 31 December 2001 and
assuming the transaction costs have been written off against share premium.
7: Column D compares column C with column B.
Circular to Brainware shareholders
A circular, which will contain full particulars of the acquisition, the
waiver and other matters pertaining thereto, and which will include a notice
of general meeting and revised listing particulars of Brainware, will be
posted to Brainware shareholders within 28 days of this announcement.
Centurion
14 June 2002
Corporate Advisor and Sponsor
Quaestor Capital (PTY) LTD
Registration number 1991/007330/07
Date: 14/06/2002 03:10:00 PM Produced by the SENS Department
