| Tue 9 Jul 2002, 0:00 | | Real Africa Investments Limited - Distribution Of |
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REAL AFRICA INVESTMENTS LIMITED - DISTRIBUTION OF RAI`S ASSETS, VOLUNTARY
WINDING-UP AND TERMINATION OF LISTING
Incorporated in the Republic of South Africa
(Registration number 1994/000398/06)
Share code: RAI
ISIN: ZAE000008710
("RAI" or "the Company")
DISTRIBUTION OF RAI`S ASSETS, VOLUNTARY WINDING-UP AND TERMINATION OF LISTING
1. INTRODUCTION
Further to the cautionary announcement dated 19 June 2002, Standard Corporate
and Merchant Bank is authorised to announce that RAI`s board of directors ("the
board") resolved, at a meeting held on 27 June 2002, subject to the fulfillment
of certain conditions precedent set out in paragraph 6 below ("conditions
precedent"), to distribute RAI`s assets ("the distributions") to the holders of
shares in RAI ("the RAI shareholders") recorded in the register on Friday, 30
August 2002 ("record date"). The distributions comprise RAI`s entire
shareholding of 181 720 194 shares in Real Africa Holdings Limited ("RAH") and
cash of R15.018 million, being RAI`s cash net of the estimated costs in
paragraph 4 below ("the RAI cash"). The distributions are to take place
predominantly by way of a reduction of capital in terms of the Companies Act,
1973 (Act 61 of 1973) ("the Companies Act"). Following the distributions, RAI`s
listing on the JSE Securities Exchange South Africa ("the JSE") will be
terminated and RAI will be wound-up by way of a members` voluntary winding-up.
2. RATIONALE
Control of RAH has since inception in 1994 been through the pyramid company, RAI
("the pyramid structure"). RAI shares have been trading at a significant
discount based on both its own underlying net asset value and the underlying net
asset value of RAH. On 11 February 2002, being the date prior to the
publication of the first RAI cautionary announcement, RAI shares were trading at
an approximate discount of 11.7% to RAI`s underlying net asset value or a
discount of 28.5% based on the underlying net asset value of RAH at that date.
The board believes that the pyramid structure no longer serves its original
purpose. The distributions will eliminate the discount at which RAI shares
trade to their own underlying net asset value.
3. THE DISTRIBUTIONS
It is proposed that, subject to fulfillment of the conditions precedent, RAI
distribute in specie its entire shareholding of 181 720 194 shares in RAH ("RAH
shares"), which at 27 June 2002 and 8 July 2002 had market values of
approximately R761 million and R781 million respectively. RAI will also
distribute the RAI cash of R15 million to RAI shareholders subject to the
fulfillment of the conditions precedent. The distributions will be effected
predominantly by way of a reduction of capital in terms of the Companies Act.
The RAI shareholders will, as a result of the distributions, be entitled to the
number of RAH shares plus the RAI cash as set out below for every 100 RAI shares
held on the record date. To the extent that RAI shareholders in foreign
jurisdictions may not be entitled to receive the RAH shares, RAI will sell the
relevant RAH shares to which such shareholders would have been entitled and
distribute the cash proceeds thereof to the relevant RAI shareholders.
Ratio of entitlement for the RAH shares Cash entitlement ratio per 100 RAI
per 100 RAI shares ("the RAH shares (cents)
distribution ratio")
121* 1000**
* Based on 181 720 194 RAH shares held and 150 181 978 RAI shares in issue on 8
July 2002.
**Based on R15.018 million cash held (net of costs) and 150 181 978 RAI shares
in issue on 8 July 2002.
The RAH distribution ratio will be applied to the RAI shareholders entire
holding of RAI shares held on the record date and will in some cases give rise
to entitlements to RAH shares which are not whole numbers. In these cases, the
entitlements will be rounded either up or down to the nearest whole number of
RAH shares and RAI shareholders will receive the rounded whole number of RAH
shares.
4. VOLUNTARY WINDING-UP AND TERMINATION OF LISTING
After the distributions, RAI will be wound-up in terms of a members` voluntary
winding-up in terms of sections 349 and 350 of the Companies Act ("the voluntary
winding-up") and it`s listing on the JSE terminated in terms of rules 1.11 and
1.12 of the JSE Listings Requirements ("the termination of listing"). In
anticipation of the termination of listing, RAI shares on the JSE will be
suspended with effect from the commencement of trade on 26 August 2002. RAI
entered into an agreement with R.A. Corporate Services (Proprietary) Limited
("RACS"), a 100% subsidiary of RAH ("the agreement"), whereby RACS will be
responsible for expenses incurred by RAI from 1 July 2002 including, costs of
the distributions, the voluntary winding-up and the termination of listing
(collectively, "the transactions") and approximately R2 million in marketable
securities taxation. In return RAI will pay RACS a fee of approximately R3.3
million including Value Added Tax. The agreement will have no material financial
effect on RAI, but will give certainty on the cash distribution and make a final
winding-up dividend unnecessary.
5. FINANCIAL EFFECTS
Upon implementation of the distributions, RAI shareholders will receive such
number of RAH shares equivalent to their indirect effective interests in RAH
prior to implementation of the distributions (or the cash proceeds from the
disposal of such RAH shares should RAI shareholders not be entitled to receive
RAH shares by reason of laws in the jurisdictions to which they are subject) as
well as their pro rata portion of the RAI cash. Other than unlocking the value
for RAI shareholders, the distributions will have no material financial effect
on RAI shareholders.
6. CONDITIONS PRECEDENT
The transactions are conditional upon the fulfillment of the following
conditions precedent:
- approval by the JSE and the South African Reserve Bank of the circular to RAI
shareholders;
- approval by RAI shareholders in general meeting of the resolutions necessary
to implement the transactions;
- approval of the voluntary winding-up by the Master; and
- any other regulatory approvals necessary to implement the transactions.
7. DOCUMENTATION, GENERAL MEETING AND SALIENT DATES
A circular, giving further details of the transactions and incorporating a
notice of the general meeting to be held in the Boardroom, 3 West Street,
Houghton, Johannesburg, 2198 at 10h00 on 12 August 2002, for the purpose of
considering and, if deemed fit, passing, with or without modification, the
resolutions necessary to implement the transactions, will be posted to RAI
shareholders on or about 19 July 2002.
The salient dates and times of the transactions are:
2002
Circular and notice of the general Friday, 19 July
meeting posted to RAI shareholders
Last day to lodge forms of proxy Thursday, 8 August
RAI general meeting (10h00) Monday, 12 August
Results of the RAI general meeting Tuesday, 13 August
published
Last day to trade Friday, 23 August
RAI shares suspended from trading on Monday, 26 August
the JSE at commencement of trade
RAI shareholders entitled to trade in Monday, 26 August
RAH shares
Record date Friday, 30 August
Posting of share certificates or Monday, 2 September
issuing of statements and crediting
the safe custody accounts at the CSDP
or broker as appropriate, in respect
of RAH shares
Cheques posted or accounts credited, Monday, 2 September
as appropriate, in respect of the RAI
cash and where RAI shareholders are
not entitled to receive the RAH shares
Listing of RAI shares on the JSE Tuesday, 3 September
terminates at commencement of trade
The above dates and times are subject to change and any such change will be
published on the Securities Exchange News Service and in the press accordingly.
RAI shareholders who have not converted their certificated shares ("RAI
certificated shareholders") to an electronic form as uncertificated shares and
been recorded in the sub-register of shareholders maintained by a Central
Securities Depository Participant ("CSDP") ("dematerialisation") will not be
allowed to dematerialise or rematerialise their RAI shares after Friday,
16 August 2002.RAI certificated shareholders who are entitled to the RAH shares
will receive their RAH shares in certificated form. If RAI shareholders are in
any doubt as to what action to take they are advised to consult their bankers,
CSDPs, stockbrokers, attorneys, legal advisers, accountants or other
professional advisers immediately.
Johannesburg
9 July 2002
Merchant Bank and Sponsor
Standard Corporate and Merchant Bank
(A division of the Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Corporate Law Advisers and Consultants
Edward Nathan & Friedland (Pty) Ltd
(Registration number 1999/026464/07)
Date: 09/07/2002 05:15:23 PM Produced by the JSE SENS Department
