| Wed 17 Jul 2002, 0:00 | | Spicer Holdings Limited - Company Announcement |
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Spicer Holdings Limited - Company Announcement
Spicer Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/005392/06)
Share code: SPI; ISIN code: ZAE000016309
("Spicer" or "the Company")
ANNOUNCEMENT REGARDING:
- THE DISPOSAL OF SPICER SWEDISH HOLDINGS AB ("SSH");
- THE REPURCHASE OF SHARES; and
- THE DELISTING AND VOLUNTARY WINDING-UP OF SPICER.
1. Introduction
Bishop Corporate Finance (Proprietary) Limited is authorised to announce that
Spicer and Spicer Management Services (Proprietary) Limited ("SMS"), a wholly-
owned subsidiary of Spicer had, subject to the fulfilment of certain suspensive
conditions, entered into an agreement ("the disposal agreement") comprising,
inter alia, the disposal of all of their shares in and claims against SSH,
including its wholly-owned subsidiary Inter IT-Konsult i Sverige AB ("Inter") to
Rhiannon SA ("Rhiannon") and the repurchase of 57 083 301 ordinary shares in
Spicer from Terexko Limited ("Terexko") ("the transaction"). Spicer has also
entered into an agreement ("the settlement agreement") in terms of which Spicer
will settle its outstanding debt with The Standard Bank of South Africa Limited
("SBSA") ("the SBSA settlement").
The directors of Spicer ("the directors" or "the board") further propose that
Spicer be delisted from the JSE Securities Exchange South Africa ("JSE") and
proceed with a voluntary winding-up in terms of Sections 349 and 351 of the
Companies Act, Act 61 of 1973, as amended ("the Act"), subject to the
transaction and the SBSA settlement becoming unconditional in all respects.
2. Rationale
On 31 October 2001 and 12 December 2001 Spicer informed shareholders that
trading conditions remain very difficult for its only operating subsidiary,
Inter, and that Spicer`s principle bankers, SBSA, have advised that they are
unlikely to renew and/or continue the banking facilities granted to Spicer. As a
result of the aforesaid, the directors considered various options available to
them to procure the orderly winding down of the affairs of Spicer, including the
possible structured winding-up or disposal of its only significant remaining
asset, Inter, and settlement of its outstanding debts.
The only options available to the board, in an endeavour to realising the
remaining value of Inter, was to either continue with the structured winding-up
or disposal of Inter to realise enough cash to settle its debt obligations vis-a
vis SBSA. Due to legislative constraints in Sweden, the structured winding-up of
Inter would not have realised sufficient cash to settle Spicer`s debts. Spicer
is also not in a position to continue to financially support Inter and to make
acceptable commercial arrangements with the board of directors of Inter to
discharge the fiduciary duties of prudent management in terms of Swedish law so
that Inter may lawfully declare a dividend in cash in an amount sufficient to
enable Spicer to settle its debt obligations with SBSA.
Furthermore, as a result of the global decline in the IT industry and Inter`s
financial position, the board was not successful in securing any other purchaser
for Inter. Ongoing legal claims between Spicer and Terexko also complicated the
disposal of Inter to a third party.
Consequently, after considering the various alternatives and options available,
Spicer entered into the disposal agreement and the settlement agreement, which
agreements will lead, in the view of the directors, to an orderly winding down
of the affairs of Spicer under the current circumstances.
3. Terms and conditions of the transaction
The transaction comprises of the disposal, repayment of the excluded claims, the
waiver and the share repurchase as one indivisible transaction, subject to the
fulfilment of the suspensive conditions.
3.1 The disposal
With effect from the closing date (expected to be on or about 5 September 2002)
Spicer and SMS will dispose of their shareholding in and claims, other than the
excluded claims referred to below, against SSH including its wholly-owned
subsidiary Inter, to Rhiannon or its nominee for a cash consideration of R1.
3.2 Repayment of the excluded claims
SSH will repay an amount of R2 800 000 to Spicer in settlement of its loan
account owing to Spicer ("excluded claims"), as follows:
- R400 000 was paid in cash and received by Spicer on 5 July 2002; and
- R2 400 000 on or before the closing date.
Spicer will utilise the cash received for the balance of the excluded claims,
being R2 400 000, to discharge its obligations to SBSA in terms of the
settlement agreement as set out in paragraph 4 below.
3.3 The share repurchase
With effect from the closing date Spicer will repurchase 57 083 301 Spicer
shares ("the repurchased shares") from Terexko for a purchase consideration of
R1 in aggregate, payable in cash. The repurchased shares represent 13,94% of the
total issued ordinary share capital of Spicer and comprises Terexko`s entire
shareholding in Spicer. The repurchased shares will be cancelled in accordance
with the provisions of Section 85(8) of the Act.
3.4 The waiver
Spicer and its subsidiaries, excluding SSH and Inter ("the Spicer group"), will
waive all claims of whatsoever nature and however arising, as at the closing
date (or which may arise after the closing date as a result of any cause of
action arising prior to the closing date) against Terexko, Rhiannon, REI Finance
Limited ("REI Finance") and World Trade Centre Johannesburg (Proprietary)
Limited, SSH and Inter (collectively referred to as "the Terexko consortium")
save for the excluded claims and any claims resulting from the terms and
conditions of the disposal agreement. The Terexko consortium will similarly
waive all claims against the Spicer group.
3.6 Suspensive conditions
The transaction is subject to the following outstanding suspensive conditions
being met by no later than 16:00 on 31 August 2002 (or such later date as may be
agreed upon by the parties):
- approval of the transaction by the South African Exchange Control
Authority;
- approval of the transaction by the JSE, the Securities Regulation Panel
("SRP") and other regulatory approvals as may be necessary;
- approval by the shareholders of the transaction including the disposal in
accordance with Section 228 of the Act; and
- approval by the shareholders of the share repurchase in accordance with
Section 85 of the Act.
4. Terms and conditions of the SBSA settlement
Spicer has borrowed monies from SBSA, in its capacity as the principal banker to
Spicer, and is indebted to SBSA, as at 15 July 2002 ("the settlement agreement
date"), in an amount of approximately R4 500 000.
Spicer has entered into the settlement agreement with SBSA in terms of which
SBSA will waive, subject to the fulfilment of the suspensive condition set out
below, all claims of whatsoever nature and however arising which it may have, as
at the settlement agreement date against the Spicer group, SSH and Inter, or
which may arise after the settlement agreement date pursuant to or as a result
of any cause of action arising prior to the settlement agreement date.
The settlement agreement is conditional upon Spicer paying to SBSA by no later
than 16:00 on 13 September 2002 (or such later date as the parties may agree in
writing) R2 400 000 in full and final settlement of its debts to SBSA.
5. Financial effects of the transaction and the SBSA settlement
The pro forma financial effects per share, before and after the transaction and
the SBSA settlement, are set out below:
Per share Notes Before(cents) After(cents) Change(%)
Headline loss 1 (1.16) (0.34) 70.69
Attributable loss 1 (3.28) (3.58) (9.15)
Net asset value 2 2.25 0.32 (85.78)
Net tangible
asset value 2 2.25 0.32 (85.78)
Notes:
1. The amounts in the "Before" column represent the unaudited headline loss
and attributable loss per share disclosed in the unaudited financial results for
the six months ended 31 December 2001. The amounts in the "After" column
represent the unaudited headline loss and attributable loss per share after the
transaction and the SBSA settlement on the assumption that the transaction and
the SBSA settlement were effective 1 July 2001.
2. The amounts in the "Before" column represent the unaudited net asset value
and tangible net asset value per share as disclosed in the unaudited results for
the six months ended 31 December 2001. The amounts in the "After" column
represent the unaudited net asset value and tangible net asset value based on
the unaudited results for the six months ended 31 December 2001 adjusted for the
transaction and the SBSA settlement had they been effected on 31 December 2001.
6. Termination of listing and the winding-up of Spicer
The transaction and the SBSA settlement will result in Spicer disposing of its
only remaining operating asset, reaching a settlement with its principal
creditor and leaving the Company with very limited cash resources as its only
asset. The board has resolved to liquidate Spicer following the implementation
of the transaction and the SBSA settlement.
Subject to the implementation of the transaction and the SBSA settlement ,
Spicer will apply to the JSE for the termination of its listing. Subject to the
passing (and registration by the Registrar of Companies, where required) of the
special resolution in terms of Section 349 of the Act, which is to be proposed
at the general meeting, Spicer will be wound up through a voluntary winding-up
as contemplated in Section 351 of the Act. After the confirmation of the final
liquidation distribution account to the satisfaction of the Master of the High
Court of South Africa, the remaining cash, if any, will be distributed to
shareholders by way of a final liquidation dividend. Shareholders are, however,
unlikely to receive any amount as a final liquidation dividend.
7. Notice of general meeting and circular to shareholders
A circular, subject to JSE and SRP approval, containing full details of the
transaction, the SBSA settlement and the voluntary winding-up and giving notice
of a general meeting to be held at 10:00 on 22 August 2002, at which the special
and ordinary resolutions required to implement the transaction, the SBSA
settlement and the voluntary winding-up, will be proposed, will be posted to
shareholders on or about 31 July 2002.
Johannesburg
17 July 2002
Corporate adviser
Bishop Corporate Finance (Pty) Ltd
Attorneys
Werksmans Incorporated
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Reporting accountants
PricewaterhouseCoopers Inc.
Date: 17/07/2002 08:00:00 AM Produced by the JSE SENS Department
