| Mon 23 Dec 2002, 12:37 | | Kersaf - Announcement |
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Kersaf - Announcement
Kersaf Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1967/007528/06)
Share code: KER ISIN: ZAE000003844
("Kersaf")
Announcement to Kersaf shareholders regarding the results of the disposal by
Kersaf and its subsidiaries ("the Group") of a portion of its Kerzner
International Limited ("KZL") shares ("the disposal")
1. INTRODUCTION
Kersaf shareholders are referred to the announcements published in the press
on:
* Thursday, 7 November 2002 relating, inter alia, to the disposal ("the
previous announcement");
and
* Thursday, 28 November 2002 relating to the results of the general meeting
at which Kersaf shareholders (with no abstention) voted in favour of the
disposal of up to a maximum of 4 025 000 KZL shares indirectly owned by Kersaf.
Investec Bank Limited ("Investec") is authorised to announce that, in terms of a
public offering in the United States arranged by KZL on the Group`s behalf ("the
public offering"), the Group has disposed of 2 300 000 KZL shares at an
effective price, after underwriters` commission and other costs ("the costs") of
US$18,42 per KZL share. Kersaf effectively held 2 166 486 of these shares, with
the balance of 133 514 held by Cement Merchants SA ("CMSA").
2. RESULTS OF THE DISPOSAL
2.1 Introduction
In terms of the public offering, the Group has disposed of 2 300 000 KZL
shares at an effective price net of the costs of US$18,42 per KZL share
resulting in net proceeds of US$42,3 million attributable to the Group. The
number of KZL shares sold includes 300 000 KZL shares, representing 15% of the
KZL shares sold to buyers in the public offering, that were required to be sold
in terms of the underwriters overallotment option. The selling price per KZL
share of US$19,50, before the costs, represents a discount of 3,6% to the KZL
closing share price on the New York Stock Exchange on the date on which the
price was fixed in terms of the public offering.
2.2 Number of KZL shares sold
In terms of previous agreements concluded between the Group and KZL and
further extensions to these agreements ("the previous agreements"), the Group
was obliged to sell 2 000 000 KZL shares by 28 February 2003 ("the compulsory
sale").
In light of the compulsory sale and the US$32 million owing to KZL as a
consequence of the agreement reached with KZL detailed in the previous
announcement ("the KZL agreement"), the Kersaf directors decided to proceed with
the public offering but to limit the number of KZL shares to be sold to the
minimum due to the relatively depressed KZL share price.
3. THE SIML ACQUISITION
3.1 Background to the SIML acquisition
As detailed in the previous announcement, Kersaf entered into a binding
"Heads of Agreement" with CMSA in terms of which a wholly-owned subsidiary of
Kersaf was to acquire the 26,7% of SIML that was not already indirectly owned by
Kersaf ("the SIML acquisition"). The conditions precedent to this transaction
have been fulfilled and the SIML acquisition has been completed.
3.2 Purchase consideration for the SIML acquisition
The purchase consideration for the SIML acquisition has been finalised as 850
000 KZL shares which equates to approximately US$16,9 million.
4. RESIDUAL SHAREHOLDING IN KZL
Prior to implementation of the disposal and the SIML acquisition, Kersaf
effectively held 19,16% (5 230 677 shares) in KZL. As a result of the disposal
and the SIML acquisition, Kersaf`s effective shareholding has been reduced to
8,11% (2 214 642 shares) in KZL ("the residual KZL shares"), which amounts to
US$44,1 million (approximately R394,9 million at R8,96/US$1) at the closing
market price on 19 December 2002 of US$19,90 per share.
The residual KZL shares are freely tradable by Kersaf subject to the following
restrictions:
* in terms of the previous agreements, a maximum of 400 000 KZL shares may be
traded by the Group per quarter; and
* in terms of an agreement entered into between the Group and the
underwriters of the public offering, no KZL shares may be traded by the Group
for a period of ninety days following the completion of the disposal i.e. 18
March 2003.
As the residual KZL shares are not considered core to Kersaf`s operations
and in accordance with Kersaf`s stated intention of disposing of its holdings in
KZL over time, the directors of Kersaf will make further announcements regarding
Kersaf`s residual shareholding in KZL as and when further decisions are taken in
this regard.
5. PROCEEDS FROM THE DISPOSAL
The proceeds from the disposal has and is to be utilised as follows:
* US$32,0 million has been utilised to discharge the Group`s obligations to
KZL in terms of the KZL agreement; and
* the balance of US$10,3 million will be utilised to settle certain other
liabilities of the Group.
As the directors of Kersaf decided on the disposal of only 2 300 000 KZL shares
and in light of the current obligations of the Group, no cash is considered to
be available for distribution to Kersaf shareholders at this time.
6. FINANCIAL EFFECTS OF THE DISPOSAL
The table below sets out the financial effects of the disposal on a Kersaf
shareholder on the basis that the disposal was effective 1 July 2001 for the
calculation of earnings and headline earnings per share and was effective on 30
June 2002 for the calculation of net asset value per share:
Before(5) Adjustments After Change
Earnings per share (cents)(1)(3) (330) (125) (455) (38%)
Headline earnings
per share (cents)(1)(3) 58 32 90 55%
Net asset value
per share (cents)(2)(4) 3 207 (157) 3050 (5%)
Notes:
(1) Based on the weighted average number of Kersaf shares in issue of
90 050 306 for the twelve-month period ended 30 June 2002.
(2) Based on the number of Kersaf shares in issue of 90 050 306 at
30 June 2002.
(3) Assumes 2 166 500 KZL shares effectively owned by Kersaf are sold for
US$19,50 each on 1 July 2001 and that an after-tax interest rate of 7% was
earned on the proceeds in South Africa. US$ amounts have been translated
into Rand amounts using the 30 June 2002 R/US$ exchange rate of
R10,225/US$1. It has also been assumed that share realisation costs of 5,5%
were incurred on the disposal of KZL shares.
(4) Assumes 2 166 500 KZL shares effectively owned by Kersaf are sold for
US$19,50 each on 30 June 2002. US$ amounts have been translated into Rand
amounts using the 30 June 2002 R/US$ exchange rate of R10,225/US$1,00. It
has also been assumed that share realisation costs of 5,5% were incurred on
the disposal of KZL shares.
(5) Based on the Kersaf Annual Financial Statements for the year ended
30 June 2002.
The table above has been prepared for illustrative purposes only.
Sandton
20 December 2002
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Sponsor
Investec Bank Limited
(Registration number 1969/004763/06)
Corporate law advisers
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Date: 23/12/2002 08:08:00 AM Produced by the JSE SENS Department
