| Tue 20 Aug 2002, 0:00 | | MATHOMO - PROPOSED DEBT RESTRUCTURING |
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Mathomo Group Limited
Incorporated in the Republic of South Africa)
(Registration number 1995/004783/06)
("Mathomo" or "the Company")
Code: MTO
ISIN: ZAE000010542
Proposed debt restructuring
1. INTRODUCTION
The directors of Mathomo ("the directors") are pleased to announce that
Mathomo has signed an agreement with The Standard Bank of South Africa
Limited ("Standard Bank"), pursuant to which Mathomo proposes to
restructure a portion of the Company`s debt. In terms of this agreement,
Mathomo will create 10 000 cumulative variable rate redeemable preference
shares with a par value of 1 cent each ("the preference shares"), which
will be issued to Standard Bank for an aggregate subscription price,
including share premium, of R30 million ("the subscription monies"). The
subscription monies will be used exclusively to reduce Mathomo`s
indebtedness to Standard Bank ("the debt restructuring").
2. RATIONALE FOR THE DEBT RESTRUCTURING
In March 2002, Mathomo raised approximately R17.6 million after costs by
way of a rights offer to Mathomo shareholders, which monies were used to
reduce Mathomo`s debt. In determining the amount of capital to be raised by
way of the rights offer, the directors:
- considered the future capital requirements of the Company; and
- anticipated concluding an agreement with Standard Bank, in terms of
which a portion of the debt owing to Standard Bank would be
restructured.
As stated above, Mathomo has now concluded the anticipated agreement with
Standard Bank, which owns 49.9% of the issued share capital of the Company.
Consequently, a portion of the debt owed by Mathomo to Standard Bank will
be converted into preference share capital, thereby amending the terms of
this debt with Standard Bank.
The directors are of the opinion that the debt restructuring is in the
interests of the shareholders, customers, suppliers and staff of Mathomo.
3. SALIENT TERMS OF THE PREFERENCE SHARES
The full terms and conditions of the preference shares will be set out in a
circular to Mathomo shareholders. The preference shares will:
- be redeemable by Mathomo at any time;
- be redeemed at the instance of the holders thereof after a period of
three years and one day;
- be redeemed at the instance of the holders thereof in the event of the
happening of certain stipulated events;
- in certain circumstances only, have voting rights equal to those
attaching to Mathomo ordinary shares;
- effectively give the holders thereof, a right of veto in respect of
certain actions of the Company which may affect their rights or
interests pursuant to the preference shares;
- entitle Standard Bank to require Mathomo to conduct a rights offer of
new ordinary shares in the event that the Company fails to comply with
certain terms of the preference shares when obliged to do so, the
proceeds of which will be used to discharge the debt arising as a
result of such failure; and
- confer on the holders thereof the right to receive, out of the
divisible profits of the Company, a cumulative preferential cash
dividend on the capital paid up thereon at a rate per annum equal to:
- in respect of the first year, 35% of the prime rate of interest;
- in respect of the second year, 46.67% of the prime rate of interest;
- in respect of the third year, 60% of the prime rate of interest; and
- in respect of any period after the third year, 100% of the prime rate
of interest.
4. UNDERTAKINGS
Mineworkers Investment Company (Proprietary) Limited ("MIC") and
CorpInvest 14 (Proprietary) Limited, a company controlled by MIC,
which collectively own 34.90% of the total issued share capital of
Mathomo, and Leslie Matuson, who owns 5.32% of the total issued share
capital of Mathomo, have irrevocably undertaken to vote in favour of
the resolutions necessary to implement the debt restructuring.
5. PRO FORMA FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the debt
restructuring on the headline earnings per share ("HEPS") and
earnings per share ("EPS") of Mathomo. The debt restructuring will
have no effect on the net asset value per share of Mathomo.
Before the Pro forma Percentage
debt after the debt change
restructuring(1 restructuring
)
HEPS (cents) (6.4) (3.76)(2) 40.8%
EPS (cents) (14.7) (12.14)(2) 17.6%
Notes:
1. The HEPS and EPS, before the debt restructuring, have been extracted from
the financial results for the six months ended and as at 31 March 2002 and
have been calculated based on 47 179 214 Mathomo ordinary shares in issue
throughout the period.
2. The pro forma HEPS and EPS, after the debt restructuring, have been
calculated based on 47 179 214 Mathomo ordinary shares in issue throughout
the six month period, assuming:
- that the debt restructuring was implemented on 1 October 2001;
- that the proceeds of the preference shares were used to reduce R30
million of Mathomo`s liabilities on overdraft at an average rate of
13.48% ("average prime rate of interest") over the period;
- that the cumulative preferential cash dividend on the R30 million
would be paid at a rate of 4.72%, being 35% of the average prime rate
of interest for the period; and
- a secondary tax on companies rate of 12.5% on cumulative preference
share cash dividend.
6. IMPORTANT DATES AND TIMES
The important dates and times in relation to the debt restructuring
are expected to be as set out in the table below.
2002
Last day to lodge forms of proxy for the Monday, 23 September
general meeting of shareholders, by 09:00, on
General meeting of shareholders at 09:00 at Wednesday, 25
the offices of the Company in the Boardroom, September
Mathomo House, 14 Prolecon Road, Prolecon,
Johannesburg, 2001 on
Results of the general meeting published on Wednesday, 25
the Securities Exchange News Services September
("SENS") on
Results of the general meeting published in Thursday, 26
the press on September
Note:
These dates and times are subject to amendment. Any such amendment will be
published on SENS and in the press.
7. CONDITIONS PRECEDENT
The debt restructuring is subject, inter alia, to the fulfilment of
the following conditions precedent:
- Mathomo shareholders approving all the resolutions necessary to
effect the debt restructuring;
- the approval of the JSE Securities Exchange South Africa;
- any necessary approvals of the South African Reserve Bank; and
- the registration by the Registrar of Companies of the special
resolutions necessary to implement the debt restructuring.
8. DOCUMENTATION AND MEETING
A circular containing full details of the debt restructuring, terms
and conditions of the preference shares and a notice of general
meeting will be posted to shareholders in due course.
20 August 2002
Merchant bank Sponsor Attorneys
SCMB Corpcapital Levy, Feinsteins &
Associates Inc.
(A division of The (A division of Corpcapital (Registration number
Standard Bank of South Investments (Proprietary) 1995/001716/21)
Africa Limited) Limited)
(Registration number
(Registration number 1998/000100/07)
1962/000738/06)
Date: 20/08/2002 05:37:00 PM Produced by the JSE SENS Department
