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Indequity Group Limited - Specific Repurchase And Capitalisation Issue
Indequity Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/015883/06)
Share Code: IDQ ISIN: ZAE000016606
("Indequity" or "the company")
SPECIFIC REPURCHASE AND CAPITALISATION ISSUE
1. Introduction
Shareholders are advised that the company intends, subject to the necessary
shareholder and regulatory approvals:
- acquiring Indequity ordinary shares held by the Indequity Group Limited
Employee Share Incentive Trust ("the Trust") ("the specific repurchase");
- amending the company`s memorandum and articles of association thereby enabling
the company to convert twenty-four million of the currently authorised
preference share capital into A- and B-Class preference shares and subdivide the
authorised A-Class preference shares from a par value of 0,1 cent each into a
par value of 0,00001 cents each; and
- effecting a capitalisation issue of A- and B-Class preference shares ("the
capitalisation issue").
2. Rationale for the specific repurchase and the capitalisation issue
The specific repurchase is in accordance with the Listings Requirements of the
JSE Securities Exchange South Africa ("the JSE"), which states that a share
trust should dispose of any shares held in the trust for which participants or
groups of participants have not been identified before December 2002.
The capitalisation issue will afford future benefits to current shareholders as
follows:
- an additional dividend of 20% of dividends paid to ordinary shareholders will
be paid to A-Class preference shareholders; and
- the A- and B-Class preference shares will each carry a vote at the general
meetings of shareholders.
3. Terms and conditions of the specific repurchase
Set out below are the terms and conditions of the specific repurchase:
- Indequity proposes to acquire 2 680 000 Indequity ordinary shares held by the
Trust for a consideration of R5 204 553.64. The Trust currently holds 18.7% of
the issued ordinary share capital of Indequity.
- the specific repurchase will be funded by offsetting the amount of the
purchase consideration against the loan due by the Trust to Indequity; and
- the specific repurchase is subject to the special resolution being approved by
the shareholders and registered by the Registrar of Companies.
4. Details of the capitalisation issue
Set out below are the salient details of the capitalisation issue:
- a capitalisation issue of one A-Class preference share and one B-Class
preference share for each Indequity share held on Friday, 18 October 2002.
- the preference shares to be issued in terms of the capitalisation issue will
be held by IDQ Nominees (Pty) Ltd on behalf of the participating shareholders.
Shareholders will receive a statement of preference shares held on their behalf
by IDQ Nominees (Pty) Ltd once a year;
- the B-Class preference shares will automatically convert into 10 000 A-Class
preference shares with the issue of every 10 000, or part thereof, new Indequity
ordinary shares. Conversion will take place in proportion to the shareholder`s
percentage holding of B-Class preference shares and could potentially give rise
to joint shareholding of B-Class preference shares;
- Indequity will utilise R11 671.67 of the share premium account in order to pay
in full for the capitalisation issue; and
- the preference shares will not be listed on the JSE.
5. Financial effects of the specific repurchase and capitalisation issue
The pro forma financial effects of the specific repurchase and the
capitalisation issue on earnings and headline earnings per share, net asset
value per share and net tangible asset value per share are set out below. The
pro forma financial effects have been prepared based on Indequity`s interim
financial information for the six months ended 31 March 2002, for illustrative
purposes only and because of its nature, may not give a true picture of
Indequity`s financial position or results of operations.
Before After the Percentage After the Percentage
(cents) specific change capitalisat change
repurchase (%) ion issue (%)
(cents) (cents)
Earnings per 9.85(1) 12.10(3) 23 12.10(5) 0
share
Headline 9.85(1) 12.10(3) 23 12.10(5) 0
earnings per
share
Net asset 1.66(1) 1.60(4) (4) 1.60(6) 0
value per
share
Net tangible 1.65(1) 1.61(4) (4) 1.61(6) 0
asset value
per share
Dividend per 3.75(1) 3.75 0 3.74 0
ordinary
share
Dividend per - - 0.75(7) 100
A-Class
preference
share
Ordinary 14 390 000 11 710 000 11 710 000
shares in
issue
Notes:
1. The "Before" financial information is based on Indequity`s published
unaudited interim results for the six months ended 31 March 2002;
2. Based on the assumption that Special Resolution Number 1 has been passed;
3. The "After the specific repurchase" earnings and headline earnings per
ordinary share were calculated on the assumption that the share repurchase took
place on 1 October 2001 taking into account the reduced number of weighted
average shares in issue for the period of 11 718 333. The effects of any
interest received on the loan to the Trust have not been taken into account as
the loan was interest free. Estimated transaction costs have not been taken
into account as these are not material;
4. The "After the specific repurchase" net asset value and net tangible asset
value per share has been calculated on the assumption that the share repurchase
took place as at 31 March 2002. Net assets have been adjusted for the reduction
in the loan to the Trust and reduced shares in issue as at 31 March 2002 of 11
710 000;
5. The proposed capitalisation issue has no effect on "After the
capitalisation issue" earnings and headline earnings per share;
6. The "After the capitalisation issue" net asset value and net tangible asset
value per share have been calculated on the assumption that the capitalisation
issue took place as at 31 March 2002. Net assets have been adjusted by R11 711
to take into account the proposed capitalisation issue out of share premium and
has not had a material effect on the "After the capitalisation issue" net asset
value and net tangible asset value.
7. The "After the capitalisation issue" per A-Class preference share was
calculated on the assumption that sufficient earnings were available to be
declared to ordinary shareholders.
8. Salient dates and times
2002
Last day for lodging forms of proxy for the general
meeting by 11:00 Tuesday, 1 October
General meeting held at 11:00 Thursday, 3 October
Publication of results of general meeting on SENS Thursday, 3 October
Publication of results of general meeting in the
press Friday, 4 October
Last day to trade in order to participate in the
capitalisation issue Friday, 11 October
Indequity shares trade ex-entitlement Monday, 14 October
Record date to determine who participates in
the capitalisation issue Friday, 18 October
Unlisted preference shares will be held by
IDQ Nominees(Pty) Limited on behalf of shareholders Monday, 21 October
Share certificates may not be dematerialised or rematerialised from Monday, 14
October to Friday, 18 October 2002, both days inclusive.
Circular to shareholders
A circular giving details of the specific repurchase and the capitalisation
issue will be posted to shareholders today.
Johannesburg
11 September 2002
Sponsor Reporting Accountants and Auditors
Bridge Capital Services (Pty) KPMG Inc.
Limited
Date: 11/09/2002 07:04:00 AM Produced by the JSE SENS Department
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