| Wed 19 Jun 2002, 0:00 | | Cci Holdings Limited - Acquisition Of Business Con |
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CCI Holdings Limited - Acquisition Of Business Conducted By MMJ Accountants
Incorporated And Further Cautionary Announcement
CCI HOLDINGS LIMITED
(Formerly Y2KTec Limited)
(Incorporated in the Republic of South Africa)
(Registration No 1999/02149/06)
("CCIH")
Share code: CCG
ISIN: ZAE000018420
ACQUISITION OF BUSINESS CONDUCTED BY MMJ ACCOUNTANTS INCORPORATED AND
FURTHER CAUTIONARY ANNOUNCEMENT
1. THE ACQUISITION
Following the publication of a cautionary announcement on 28 May 2002, The
Janus Corporation (Pty) Ltd is authorised to announce that CCIH has entered
into an agreement to acquire the business conducted by MMJ Accountants
Incorporated ("MMJ") with effect from 1 June 2002 on the terms and
conditions as set out below. MMJ conducts business as a provider of
accounting, business advisory, taxation and secretarial services to the
small and medium sized business sector. The vendor of MMJ is Mark van
Houten.
The assets (exclusive of any liabilities) being acquired comprise the work
in progress and physical stock, office equipment, fixtures and fittings,
client base, goodwill and intellectual property of MMJ. CCIH will however
assume the rental agreements over certain office equipment used by MMJ and
enter into a lease agreement for a period of twelve months over the premises
occupied by MMJ.
The acquisition of MMJ is complementary to the present business activities
of CCIH.
2. PURCHASE CONSIDERATION
The consideration payable by CCIH for the business is R3 150 000 which will
be settled by:
the cash payment of R630 000 in three monthly instalments of R210 000 from 1
September 2002;
the issue of 12 600 000 new ordinary shares in CCIH at an issue price of 7,5
cents per share for a consideration of R945 000 on the signature of the
agreement; and
the issue on 1 June 2003 of between 10 500 000 and a maximum of 13 125 000
new ordinary shares in CCIH at the ruling share price on 1 June 2003,
provided that the price of issue will not be lower than 12 cents and not
higher than 15 cents per share.
3. SUSPENSIVE CONDITIONS
The acquisition of the MMJ business is subject to the fulfilment of the
following suspensive conditions by no later 30 June 2002:
CCIH concluding a satisfactory due diligence on MMJ as well as preparing a
logistical plan to integrate the businesses and staff of CCIH and MMJ;
Shareholders of MMJ approving the sale of the business;
The board of directors of CCIH and the JSE Securities Exchange South Africa
approving the acquisition; and
Mark van Houten entering into an employment agreement and a restraint of
trade agreement.
Warranties as are usual for a transaction of this nature are included in the
agreement.
4. FINANCIAL EFFECTS
Had the transaction been effective at the beginning of CCIH`s last financial
period ended 31 December 2001, the effect on the CCIH headline earnings and
net asset value per share as at 31 December 2001 would have been as follows:
CCIH CCIH
Before the After the Increase/
Transaction Transaction (Decrease)
(cents) (cents) (%)
Loss per share (1,99) (1,50) 24,65
Headline loss per
share 0,73 1,00 37,41
Net asset value per
share (1,08) (0,20) 81,34
Net tangible asset
value per share (1,08) 1,19) (10,23)
The financial effects as calculated have been based on CCIH`s published
audited financial results as at 31 December 2001 and on the assumptions
that:
the shares in issue at 31 December 2001 will increase from 292 487 632 to
318 212 632 based on the issue of the maximum number of shares to the vendor
of MMJ; and
that MMJ produces before tax profits for twelve months of R1 500 000.
The Before financial results for CCIH only reflects the financial results of
the CCI business for the period from 1 July 2001, being the date on which
the CCI business was acquired by CCIH.
5. FURTHER CAUTIONARY ANNOUNCEMENT
Negotiations are still in progress in relation to other possible
transactions which, if successfully concluded, may have a material effect on
the price of the company`s shares. Shareholders are accordingly advised to
continue to exercise caution in dealing in CCIH`s shares until a full
announcement is made.
Johannesburg
19 June 2002
Corporate adviser and sponsor
The Janus Corporation (Pty) Ltd
Date: 19/06/2002 03:25:03 PM Produced by the SENS Department
