| Mon 21 Oct 2002, 17:46 | | Mathomo Group Limited - Disposal By Mathomo Of Its |
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Mathomo Group Limited - Disposal By Mathomo Of Its Interest In Mathomo Financial
Services (Proprietary) Limited
Mathomo Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/004783/06)
("Mathomo" or "the Company")
Share code: MTO ISIN: ZAE000010542
DISPOSAL BY MATHOMO OF ITS INTEREST IN MATHOMO FINANCIAL SERVICES (PROPRIETARY)
LIMITED
1. INTRODUCTION
The board of directors of Mathomo ("the board") is pleased to announce that
Mathomo has entered into an agreement with Mineworkers Investment Company
(Proprietary) Limited ("MIC") and Miners Credit Guarantee (Proprietary) Limited
("MCG") ("the disposal agreement"), in terms of which Mathomo will dispose of
its 42,5% interest in Mathomo Financial Services (Proprietary) Limited ("MFS")
to MIC and MCG ("the disposal").
2. RATIONALE FOR THE DISPOSAL
In January 2002, Mathomo embarked on a restructuring program involving, inter
alia, the consolidation of certain operations, the disposal of non-core assets,
a reconstitution of the board, a change in management, a recapitalisation of the
Company and a flattening of reporting structures.
The disposal forms part of this ongoing restructuring program, as MFS falls
outside of Mathomo`s core business of the sale and distribution of workwear and
retailing of merchandise to mineworkers. MFS is an investment holding company,
the sole asset of which is 10% of the issued share capital of Unlimited Deals
(Proprietary) Limited, a micro-lender engaged in business in the mining sector.
The proceeds of the disposal will be used to reduce Mathomo`s liabilities on
overdraft.
3. THE DISPOSAL
In terms of the disposal agreement, Mathomo will dispose of:
* 35% of the issued share capital of MFS and a proportionate share of its
claims against MFS, to MIC for an aggregate consideration of R2 558 750; and
* 7,5% of the issued share capital of MFS and a proportionate share of its
claims against MFS, to MCG for an aggregate consideration of R941 250,
as one indivisible transaction.
4. RIGHT OF FIRST REFUSAL
Subject to the disposal becoming unconditional, Mathomo has also granted to
MFS a right of first refusal in respect of:
* any transaction which Mathomo wishes to enter into with any third party for
the third party in question:
- to distribute unsecured personal loans and associated products (excluding
the provision of credit to purchase physical goods), through Mathomo`s mining
outlets; and/or
- to capitalise Mathomo in order for Mathomo itself to distribute such
unsecured personal loans and associated products through Mathomo`s mining
outlets; and/or
* any disposal by Mathomo of any of its mining related businesses to a third
party, in which Mathomo has an interest.
The right of first refusal will be effective for a period of three years
commencing on the date on which the disposal becomes unconditional.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the disposal on
the earnings per ordinary share ("EPS"), headline earnings per ordinary share
("HEPS") and the net asset value ("NAV") per ordinary share of Mathomo. The
effects of the disposal on Mathomo`s NAV and tangible NAV per ordinary share are
identical.
Before Pro forma
the after the Percentage
disposal disposal change
(cents) (1) (cents) (%)
EPS (14,74) (22,23) (2) (50,81)
HEPS (6,36) (3,26) (2) 48,74
NAV per ordinary share 7,62 (2,97) (3) (138,98)
Notes:
(1) The EPS, HEPS and NAV per ordinary share, before the disposal, 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, being the number of ordinary shares in issue after the rights offer and
the 10-for-1 ordinary share consolidation, which were completed on 10 April 2002
and 3 May 2002, respectively.
(2) The pro forma EPS and HEPS, after the disposal, have been calculated based
on 47 179 214 Mathomo ordinary shares in issue, assuming:
* the disposal was implemented on 1 October 2001;
* the proceeds of the disposal were used to reduce Mathomo`s liabilities on
overdraft bearing interest at an average rate of 13,48% per annum over the
period by R3,5 million;
* the issue of the 10 000 cumulative variable rate redeemable preference shares
to The Standard Bank of South Africa Limited ("Standard Bank") for R30 million
("the debt restructuring"), which was effected on or about 26 September 2002,
was implemented on 1 October 2001;
* the proceeds of the debt restructuring were used to reduce Mathomo`s
liabilities on overdraft bearing interest at an average rate of 13,48% per annum
over the period by R30 million;
* the cumulative preferential cash dividend on the R30 million was paid at a
rate of 4,72% per annum; and
* Secondary Tax on Companies of 12,5% was paid in relation to the cumulative
preferential cash dividend.
(3) The pro forma NAV per ordinary share, after the disposal, has been
calculated based on 47 179 214 Mathomo ordinary shares in issue, assuming that
the disposal was implemented on 31 March 2002. As was announced previously, the
debt restructuring had no effect on the NAV per ordinary share of Mathomo.
6. RELATED PARTY TRANSACTION
MIC and CorpInvest 14 (Proprietary) Limited ("CorpInvest"), a company
controlled by MIC, collectively own 34,9% of the issued ordinary share capital
of Mathomo. Consequently, the disposal constitutes a related party transaction
in terms of the Listings Requirements of the JSE Securities Exchange South
Africa ("JSE").
7. UNDERTAKINGS
Standard Bank, which owns 49,9% of the issued ordinary share capital of
Mathomo and Leslie Matuson, who owns 5,3% of the issued ordinary share capital
of Mathomo, have irrevocably undertaken to vote in favour of the resolutions
necessary to implement the disposal.
8. INDEPENDENT ADVISER`S OPINION
The board has appointed Fisher Hoffman PKF (Jhb) Inc. as an independent
adviser to advise it on whether the terms of the disposal are fair and
reasonable to the shareholders of Mathomo. The substance of such advice will be
included in a circular to Mathomo shareholders.
9. IMPORTANT DATES AND TIMES
The important dates and times of the disposal are expected to be as set out
below.
2002
Last day to lodge forms of proxy for the general
meeting of shareholders, by 09:00, on Thursday, 5 December
General meeting of shareholders at 09:00, at the
office of the Company in the Boardroom,
Mathomo House, 14 Prolecon Road, Prolecon,
Johannesburg, 2001, on Friday, 6 December
Results of the general meeting published on
the Securities Exchange News Service ("SENS"), on Friday, 6 December
Results of the general meeting published in the press, on Monday, 9 December
Note:
These dates and times are subject to amendment. Any such amendment will be
published on SENS and in the press.
10. CONDITIONS PRECEDENT
The disposal is subject, inter alia, to the fulfilment of the following
conditions precedent:
* the passing of the resolutions necessary to effect the disposal by Mathomo
shareholders (excluding MIC and CorpInvest), prior to 30 December 2002;
* the approval of the JSE, prior to 30 December 2002; and
* the conclusion of a shareholders` agreement by MIC and MCG in relation to
MFS, prior to 30 October 2002.
11. GENERAL MEETING AND DOCUMENTATION
A general meeting of Mathomo shareholders will be held for the purpose of
considering and, if deemed appropriate, approving the resolutions necessary to
effect the disposal. A circular containing full details of the disposal and the
general meeting will be posted to shareholders in due course.
Johannesburg
21 October 2002
Merchant bank
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Attorneys
Feinsteins Attorneys
Established 1934
(Levy, Feinsteins & Associates Inc)
(Registration number 1995/001716/21)
Sponsor
Corpcapital Corporate Finance
a sponsor registered with the
JSE Securities Exchange South Africa
Debt adviser
Credit Management Solutions (Pty) Ltd
Reporting accountants and auditors
Fisher Hoffman PKF (Jhb) Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration number 1994/001166/21)
Date: 21/10/2002 05:29:00 PM Produced by the JSE SENS Department
