| Fri 28 Jun 2002, 0:00 | | Community Technologies Limited - Company Announcem |
|
COMMUNITY TECHNOLOGIES LIMITED - COMPANY ANNOUNCEMENT
MASHOLD CONSOLIDATED INVESTMENT HOLDINGS LIMITED
trading as
COMMUNITY TECHNOLOGIES LIMITED
(registration number 1988/0033352/06)
Share code: CTH ISIN: ZAE000022323
("C-Tech" or "the company")
ANNOUNCEMENT REGARDING:
The acquisition by C-Tech of HDP;
Specific repurchase of shares by C-Tech;
A change of control and waiver of a mandatory offer to shareholder;
A general authority to issue shares for cash; and
An increase in the authorised share capital.
1. INTRODUCTION
Shareholders are referred to the announcement dated 21 February 2002
relating to the suspension of the listing of C-Tech. Shareholders are
advised that C-Tech has entered into an agreement with Summit Ridge Trading
2 Limited and Sterling Asset Finance (Proprietary) Limited ("Vendors") to
acquire the shares of Harlequin Duck Properties 200 (Proprietary) Limited
("HDP") with effect from 1 March 2002 ("the Acquisition"). Trans African, a
black empowerment group will as a result of the Acquisition hold a 30%
interest in C-Tech.
2. ACQUISITION OF HDP
2.1 C-Tech acquired HDP from the Vendors for a total consideration of
R65 million to be settled by way of the issue of 325 000 000 C-Tech ordinary
shares at an issue price of 20 cents per share. HDP`s only asset is the
Sindele Mining business.
2.1.1 HDP acquired Sindele Mining business from the vendor, L
M van der Merwe, for a total consideration of R26 million to be settled by
way of the transfer of 130 000 000 C-Tech ordinary shares at a price of 20
cents each.
2.1.2 HDP is also in the process of acquiring an interest of
50% in Calculus Products (Proprietary) Limited and Compu Punch (Proprietary)
Limited ("the Calculus business") from M Dietstein and P Ackerman. HDP will
obtain board control. Should this acquisition not be successful the
purchase price of HDP will be reduced pro rata.
2.2 The purchase consideration is based on the future warranted profits and
goodwill of the Acquisition.
3. NATURE OF BUSINESS
3.1 Current business
In an announcement published on 21 February 2002, it was reported that the
main business of C-Tech, Exceptional Business Systems ("EBS"), a computer
distribution business, has ceased all operations with effect from 1 February
2002. This business has now been revived and presently provides the
majority of turnover and income of C-Tech.
3.2 Sindele Mining business
The Sindele Mining business operates as contractors,
manufacturers, suppliers and constructors to the mining industry. Services
include architecture, civil and structural engineering, electronic
engineering and mechanical engineering.
Sindele Mining business currently operates through the following
entities:
Excalibur Mining CC;
Galvco (Pty) Ltd;
Galvprop (Pty) Ltd;
Sindele Mining Supplies CC; and
Galvex Properties (Pty) Ltd.
The close corporations are in the process of conversion to
private companies.
The net asset value of the Sindele Mining business, as
acquired, is R2 725 000 on 28 February 2002 and the profit after tax for the
9 months ended 28 February 2002 is R1 551 000.
3.3 Calculus business
The Calculus business specialises in sheet metal components made
of stainless steel, aluminium, mild steel, copper, brass and aluminium
composite material, and operates through:
Calculus Products (Proprietary) Limited; and
Compu Punch (Proprietary) Limited.
The net asset value of the total Calculus business, as
acquired is R 13 000 000 on 28 February 2002 and the profit after tax for
the year ended 28 February 2002 is R 2 800 000.
4. RATIONALE FOR THE ACQUISITION
Due to the various aborted attempts at takeovers or reverse takeovers, C-
Tech had to continue trading via its computer sale and service businesses in
deteriorating circumstances. The Acquisition adds specifically selected
engineering assets with strong empowerment involvement, allowing tendering
for state and institutional contracts. The assets were the subject of a
thorough due diligence study by C-Tech`s technical advisors.
5. PROSPECTS
The assets acquired, at present earn a substantial income. With
additional contracts already in the pipeline, mainly as a result of the
empowerment partners, dividends should be payable within the foreseeable
future.
6. REPURCHASE OF SHARES
As set out in the annual report of C-Tech for the year ended 31
December 2000, the Company issued, on 12 May 2000, 17,05 million C-Tech
shares at R1.00 each as a deposit for the acquisition of Globetrack (Pty)
Ltd and related businesses. The acquisitions were not approved by
shareholders in general meeting. In terms of a general settlement agreement
of 17 May 2001 and as amended on 4 September 2001 between the Company and
the relevant vendors, these acquisitions were cancelled on 10 October 2001
due to non delivery by the vendors of the assets. The directors intend to
acquire the 17,05 million shares by way of a repurchase by the Company of
its own shares from the relevant vendors for no consideration, which are
subject to the requirements of the Companies Act 1973, as amended, the
approval of the JSE Securities Exchange South Africa and the approval of the
special resolution by the shareholders in general meeting. The repurchase
will be implemented as soon as practically possible following the necessary
approvals in general meeting.
The Company expects to re-issue these shares for cash to raise the
funds to complete the present restructuring and to leave the Company debt
free.
7. CHANGE OF CONTROL
The Acquisition will result in a change of control of C-Tech and accordingly
an offer to minority shareholders of C-Tech will be required in terms of the
rules of the Securities Regulation Panel ("SRP"). In order to avoid an
offer to minorities the Acquisition is, inter alia, subject to minority
shareholders waiving their rights to an offer in terms of rule 8.7 of the
SRP code.
Because the Acquisition will result in a reverse-takeover, the circular to
shareholders detailing the Acquisition will contain revised listing
particulars as for a new listing. The Listing division of the JSE will have
to confirm that the listing of C-Tech may continue following the
Acquisition.
8. ISSUE OF SHARES FOR CASH
C-Tech intends to issue shares for cash in terms of a general authority to
issue shares for cash, to selected institutions and investors to provide
working capital, subject to the approval of shareholders and the Listings
Requirements of the JSE. The issue of shares for cash is not subject to the
Acquisition.
9. INCREASE IN SHARE CAPITAL
In order to give effect to the transaction listed above, the Company intends
to increase its authorised share capital from 27 812 623 ordinary shares of
no par value to 1 000 000 000 ordinary shares of no par value by the
creation of 972 187 377 ordinary shares of no par value. This is subject to
shareholders` approval of the special resolution to give effect thereto.
10. SUSPENSIVE CONDITIONS
The transactions detailed above are, inter alia subject to the fulfilling of
the following suspensive conditions.
10.1 Approval by the JSE;
10.2 Approval by the SRP;
10.3 Approval by the shareholders of C-Tech in a general meeting;
10.4. Competition Commission approval, if required; and
10.5 The increase of the share capital of C-Tech to enable the
implementation of the Acquisition.
11. FINANCIAL EFFECTS
The financial effects of the Acquisition will be disclosed in a further
announcement once all financial information has been obtained.
12. MANAGEMENT AND DIRECTORS
12.1 Top management for the acquired businesses will remain for at least two
(2) years after re-listing.
12.2 The present board of directors consists of Messrs JD Abrahams, BF
Davison, BJ Hendricks and WM Oosthuizen.
12.3 The board will be reconstituted at listing by adding a representative
of each of the Sindele and Calculus businesses and a further two
representatives of the empowerment group.
13. LISTING
The JSE has given the Company dispensation to issue a circular within
28 days from the date of this announcement, failing which the listing of C-
Tech will be terminated.
14. CIRCULAR
A detailed circular including revised listings particulars, will be sent to
shareholders within 28 days from the date of this announcement. It is
expected that a shareholder meeting will be convened within 21 days
following the distribution of the circular.
Pretoria
1 July 2002
Exchange Sponsors (Pty) Limited
Date: 28/06/2002 05:10:01 PM Produced by the SENS Department
