| Fri 6 Dec 2002, 17:39 | | Control Instruments Group Limited - Proposed Speci |
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Release Date: 06/12/2002 16:05:09 Code(s): CNL
Control Instruments Group Limited - Proposed Specific Repurchase
Control Instruments Group Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1964/003987/06)
Share code: CNL
ISIN code :ZAE000001665
("Control" or "the company")
PROPOSED SPECIFIC REPURCHASE
1. Introduction
Shareholders are advised that Control has entered into an agreement with the
trustees for the time being of the Basil Hersov Family Trust ("the Trust")
(being the beneficial owner of 12 050 159 Control shares) and Control
Instruments Management Services (Proprietary) Limited ("CIMS"), in terms of
which:
- Control will repurchase, via CIMS, 8 000 000 Control shares held by the
Trust at 100 cents per share;
- the balance of the Trust`s holding of Control shares (i.e. 4 050 159
shares) or a portion thereof will be sold by the Trust at 100 cents per share to
a third party or parties;
- any Control shares not sold by the Trust to a third party or parties will
be repurchased by Control at 100 cents per share and subsequently cancelled and
delisted,
("the specific repurchase").
2. Rationale for the specific repurchase
Mr. JR Hersov, a beneficiary of the Trust, has recently resigned as a non-
executive director of the company and wishes to divest himself of his interest
in the company.
The directors believe that the specific repurchase will enhance the company`s
earnings per share and contribute towards future shareholder value.
3. Terms of the specific repurchase
Subject to the approval of shareholders in general meeting and in terms of the
Companies Act and the Listings Requirements of the JSE Securities Exchange South
Africa ("JSE"), it is proposed that specific authority be granted to the company
to repurchase a maximum of 12 050 159 Control shares, constituting 13,6% of the
company`s current issued share capital, from the Trust at 100 cents per share
with effect from the date of the general meeting. 8 000 000 Control shares,
constituting 9% of the company`s current issued share capital, will be
repurchased and held as treasury stock by CIMS and the balance of 4 050 159, or
a portion thereof, will be sold by the Trust to a third party or parties,
failing which, whatever balance remains will be repurchased by Control and will
then be cancelled and delisted from the JSE.
The price at which the Control shares are to be repurchased is based on the
weighted average of the market value of Control`s shares on the JSE over the
five business days ended 12 November 2002 (plus a premium of 2%), which is the
date that the directors approved the specific repurchase.
4. Conditions precedent
The specific repurchase is subject to the approval of shareholders in general
meeting and the registration by the Registrar of Companies of the requisite
special resolutions.
5. Pro forma financial effects of the specific repurchase
The table below sets out the unaudited pro forma financial effects of the
specific repurchase.
This table is provided for illustrative purposes only and because of its
historical nature, may not give a fair reflection of the company`s financial
position after the specific repurchase, nor the effect on future earnings.
Pro forma
Befor After % Change
e
(cents per
share)
Net asset value per share 88.15 86.28 (2.12)
Tangible net asset value per 74.91 70.95 (5.28)
share
Earnings per share 6.71 6.51 (2.98)
Headline earnings per share 7.23 7.11 (1.60)
Actual and weighted average
number of shares in issue 88 486 84 436
(000`s)
The pro forma financial effects are based on the following assumptions:
the "Before" column was extracted, without adjustment, from the published
unaudited consolidated interim financial results of the company for the six
months ended 30 June 2002;
the specific repurchase was financed by way of borrowings bearing interest at a
pre-tax rate of 16% per annum, for a period of six months*;
12 050 159 Control shares were repurchased at 100 cents per share, of which
4 050 159 were cancelled and delisted and 8 000 000 were held as treasury stock
by CIMS. The 12 050 159 Control shares were ignored for purposes of calculating
the net asset value per share, tangible net asset value per share, earnings per
share and headline earnings per share of the company;
for the purpose of calculating the net asset value per share and the tangible
net asset value per share it was assumed that the specific repurchase had been
implemented on 30 June 2002;
for the purpose of calculating the earnings per share and headline earnings per
share it was assumed that the specific repurchase was effected on 2 January
2002.
*The company is, however, of the opinion that sufficient cash resources will be
available at the date of the specific repurchase.
6. Documentation
A circular to Control shareholders, setting out details of the specific
repurchase and including a notice of a general meeting to be held on or about 6
January 2003 will, subject to the approval of the JSE, be posted to shareholders
on or about 12 December 2002.
Cape Town
6 December 2002
INDEPENDENT ADVISER AND REPORTING LEGAL ADVISER
SPONSOR ACCOUNTANTS Jan S de
Barnard Jacobs Mellet PricewaterhouseCoo Villiers
Corporate Finance (Pty) pers Inc
Limited
Date: 06/12/2002 04:05:00 PM Produced by the JSE SENS Department
