| Mon 30 Sep 2002, 10:46 | | Wesco Investments Limited - Conclusion Of Agreemen |
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WESCO INVESTMENTS LIMITED - CONCLUSION OF AGREEMENT AND DISTRIBUTION
ANNOUNCEMENT
Wesco Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1968/005871/06)
(Share code WES)
(ISIN Number ZAE000007928)
("Wesco" or "the Company")
ANNOUNCEMENT REGARDING:
THE PROPOSED SALE BY WESCO OF A CONTROLLING INTEREST IN TOYOTA SOUTH AFRICA
(PROPRIETARY) LIMITED TO TOYOTA MOTOR CORPORATION OF JAPAN; and
THE PROPOSED CASH PAYMENT TO SHAREHOLDERS OF WESCO OF R55 PER SHARE
1. Introduction
Further to the announcement of 24 June 2002, the board of directors of Wesco
("the board") hereby announces that formal agreement has now been concluded
whereby, subject to fulfillment of the conditions precedent referred to in
paragraph 4 below, Wesco will sell 12 425 997 ordinary shares in Toyota South
Africa (Proprietary) Limited ("Toyota SA"), being 61,1% of the Company`s
interest in Toyota SA (and representing some 39,3% of the total share capital of
Toyota SA), to Toyota Motor Corporation of Japan ("TMC") ("the Sale"), in
consideration for a cash payment of R994 079 760, equivalent to R80 per share
("the Sale proceeds"). The board is also pleased to announce that the
Competition Tribunal has given its unconditional approval for the Sale.
2. The cash payment
The board is proposing to make a cash payment of R55 per Wesco share, payable in
South African rands ("the cash payment"), amounting in total to R464 299 000.
Subject to fulfillment of the conditions precedent referred to in paragraph 4
below by not later than Friday, 8 November 2002, it is expected that the cash
payment will be made to all shareholders of Wesco recorded as such in the
register of members of the Company at the close of business on Friday, 15
November 2002. On such basis, settlement of the cash payment will take place
on Monday, 25 November 2002. An announcement will be published by Wesco on or
about Friday, 8 November 2002 reporting on the outcome of the general meeting of
Wesco ("general meeting") referred to in paragraph 7 below as well as confirming
or amending the dates pertinent to the cash payment.
3. Application of Sale proceeds
Subject to implementation of the Sale, it is intended to utilise the Sale
proceeds as follows:
approximately R300 million will be retained to enable the Company to follow its
rights in terms of rights offers expected to be undertaken by Toyota SA in
pursuance of capital raisings;
R464 299 000 for the cash payment dealt with in paragraph 2 above;
approximately R229 781 000 will be retained by the Company to settle any
potential warranties arising from the Sale, pursue opportunities within the
Wesco group`s current sphere of business operations and for settlement of
Secondary Tax on Companies and Capital Gains Tax as well as all other expenses
associated with the Sale and the cash payment.
4. Conditions precedent
Both the Sale and the cash payment remain subject to fulfillment of the
following conditions precedent:
4.1 the shareholders` agreement concluded between Wesco and TMC regulating
their relationship as shareholders in Toyota SA coming into effect;
4.2 the passing of an ordinary resolution in terms of section 228 of the
Companies Act, 1973 (Act 61 of 1973), as amended ("Companies Act") at the
general meeting referred to in paragraph 7 below to approve and ratify the
Sale as embodied in the agreement of Sale and such Sale agreement becoming
unconditional.
In addition to the above, the cash payment is further conditional upon the
passing at the general meeting:
- of a special resolution and registration thereof by the Registrar of
Companies, for the adoption by the Company of a new Memorandum and Articles
of Association inter alia containing the authority necessary in terms of
section 90 of the Companies Act to effect payments to shareholders of the
nature of the cash payment; and
- of an ordinary resolution necessary to approve the cash payment.
5. Unaudited pro forma financial effects of the sale and the cash payment
Set out below are the unaudited pro forma financial effects on Wesco of the
proposed Sale and cash payment, based on the published unaudited consolidated
interim financial results of Wesco for the 6 months ended 30 June 2002. The
unaudited pro forma financial effects have been prepared for illustrative
purposes only to provide information about how the Sale and cash payment might
have affected the earnings and net asset value per share of Wesco, had the Sale
and cash payment been effected on 1 January 2002 and 30 June 2002, respectively.
Because of their nature, the pro forma financial effects may not give a fair
reflection of Wesco`s financial position or the effect on income going forward.
The financial information is adjusted as described in notes 2 to 5 below.
Per Wesco share Before 1 Pro Percen Pro Percent
forma tage forma age
after change after change
Sale cash
payment
5
(1260,2) 1 836,82 - 1836,8 -
Earnings/ (loss) per
share (cents)
Headline / (loss) (1260,2) 102,82 - 102,8 -
earnings per share
(cents)
Net asset value per 19 31,83 14,0 14231,8 (27,9)
share (cents) 17 306,7
Net tangible asset 17 306,7 19 31,83 14,0 14231,8 (27,9)
value per share (cents)
Notes:
1. Extracted from the published unaudited consolidated interim results of
Wesco for the 6 months ended 30 June 2002.
2. Adjusted to reflect the earnings and headline earnings per share that the
Company would have earned had the Sale been effected by the Company with
effect 1 January 2002 and the proceeds arising from the Sale had been
invested to earn an after tax interest income of 8,5% for the 6 months
ended 30 June 2002. Headline earnings per share excludes the profit
resulting from the Sale.
3. Adjusted to reflect the effect on net asset value had the Sale been
effected by the Company with effect from 30 June 2002.
4. Prior to the Sale, Wesco consolidated its shareholding in Toyota SA.
Subsequent to the Sale, Wesco`s shareholding in Toyota SA will be equity
accounted.
5. Adjusted to reflect the effect of the cash repayment, as if the cash
payment had been effected at the end of the financial period.
The calculation of earnings and net asset value per share is based on Wesco`s
issued share capital of 8 441 800 ordinary shares.
6. Views of the board and Nedcor Investment Bank Limited
Nedcor Investment Bank Limited, acting as independent financial adviser to
the board of directors of Wesco, has considered the terms and conditions of
the Sale and is of the opinion that, as at the date of issue of its letter,
the Sale proceeds are fair and reasonable from a financial point of view to
shareholders of Wesco and has advised the directors of Wesco accordingly in
the form and subject to the conditions of a letter to the directors of the
Company.
Taking into account the opinion of Nedcor Investment Bank Limited, the board of
Wesco is of the unanimous opinion that the Sale is fair and reasonable and
accordingly recommend that shareholders vote in favour of the ordinary
resolution at the general meeting necessary to ratify and approve the Sale as
well as all other resolutions to be considered thereat.
Those directors of Wesco who own shares in their own right intend to vote such
shares in favour of all resolutions at the general meeting.
7. Circular to shareholders and general meeting
A circular to shareholders of Wesco dealing in detail with the Sale and cash
payment and matters related thereto and incorporating a notice convening a
general meeting of shareholders of the Company to be held at 10:00 on Monday, 4
November 2002 in the Auditorium, Toyota Building, Wesco Park, Sandton is
currently being prepared.
Subject to the required approvals of the JSE Securities Exchange South Africa
and the Securities Regulation Panel, it is expected that the circularwill be
posted to shareholders on Friday, 11 October 2002.
Johannesburg
30 September 2002
Investment bank and independent Independent legal adviser
financial adviser
WWB
NIB WEBBER WENTZEL BOWENS
Nedcor Investment Bank Limited
Corporate adviser and sponsor Reporting accountants
PWC PWC
PricewaterhouseCoopers Corporate PricewaterhouseCoopers Inc
Finance (Pty) Ltd
(Registration number
1970/003711/07)
Date: 30/09/2002 07:30:00 AM Produced by the JSE SENS Department
