| Wed 22 Jan 2003, 12:05 | | Brimstone Investment Corporation Limited - Announc |
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Brimstone Investment Corporation Limited
(Registration number 1995/010442/06)
(Incorporated in the Republic of South Africa)
ISIN Number: ZAE000015277 Share Code: BRT
ISIN Number: ZAE000015285 Share Code: BRN
("Brimstone" or "the company")
Announcement regarding a proposed specific repurchase of shares and the proposed
disposal of Brimstone`s interest in Nando`s Group Holdings Limited ("Nando`s")
1. Introduction
Holders of ordinary shares and "N" ordinary shares in Brimstone ("Brimstone
shareholders") are referred to the announcement to Brimstone shareholders dated
9 September 2002 relating to:
* the proposed specific repurchase by Brimstone from Capricorn Ventures
(Proprietary) Limited ("Capricorn") of 3 599 400 Brimstone ordinary and up to
71 937 034 Brimstone "N" ordinary shares, at 63 cents per Brimstone share, plus
an amount computed by reference to Capricorn`s acquisition and holding costs
("Specific Repurchase"); and
* the proposed disposal of Brimstone`s holding of 77 688 700 Nando`s ordinary
shares ("Disposal").
Brimstone shareholders are further referred to a Nando`s announcement published
today informing its shareholders inter alia of a scheme of arrangement in terms
of section 311 of the Companies Act (Act 61 of 1973) to be proposed by Brozent
Holdings (Pty) Limited ("Brozent") between Nando`s and its minority shareholders
(including Brimstone) (the "Scheme").
2. The scheme
As set out in the Nando`s announcement published today, details of the Scheme
will be included in a circular to Nando`s shareholders, which is expected to be
posted on or about 21 February 2003.
Brimstone shareholders` attention is drawn to the following:
* the consideration payable in terms of the Scheme will be 70 cents per Nando`s
share ("Scheme Consideration"), compared to the 65 cents per Nando`s share
stated in the announcement of 9 September 2002;
* the Scheme will be conditional upon, inter alia, Brimstone shareholders
approving the Specific Repurchase and the Disposal in general meeting; and
* should the Scheme not become operative, an offer will (subject to the
fulfillment of the aforementioned condition that the Specific Repurchase and the
Disposal are approved by the required majority of Brimstone shareholders) be
made by Brozent in terms of which Brozent will offer to purchase the Nando`s
shares held by minority shareholders in Nando`s (including Brimstone) at 70
cents per share, being an amount equivalent to the Scheme Consideration
("Substitute Offer").
3. Shareholder meetings
Brimstone will hold three separate meetings of shareholders (together referred
to as "Brimstone shareholder meetings"), being:
* a general combined meeting of Brimstone ordinary shareholders and Brimstone
"N" ordinary shareholders to authorise the Disposal; and
* two separate meetings for each of the Brimstone ordinary shareholders and
Brimstone "N" ordinary shareholders to authorise the Specific Repurchase.
In accordance with a ruling received from the JSE Securities Exchange South
Africa ("JSE"), the votes at the latter two meetings will be aggregated in
accordance with the voting rights attaching to each class of shares, in order to
determine whether the required special resolutions have been passed by the
requisite majority of Brimstone shareholders. In this regard, in accordance
with their terms each Brimstone ordinary share will be entitled to 100 votes and
each Brimstone "N" ordinary share will be entitled to one vote.
4. Financial effects
The table below sets out the pro forma financial effects of the Specific
Repurchase and the Disposal:
Per Before After % After %
Brimstone Disposal change Disposal change
share and
Specific
Repurchase
Earnings 5.3 10.6 100% 15.5 46.2%
(cents)
Headline 5.8 5.2 -10.3% 6.7 28.8%
earnings
(cents)
Net asset 85.9 91.9 7.0% 110.0 19.7%
value
(cents)
Notes
1. The financial information under the column headed "Before" is extracted from
Brimstone`s unaudited published interim results for the six months ended 30 June
2002.
2. The pro forma financial information under the column headed "After Disposal"
assumes that Brimstone disposed of its investment of 77 688 700 Nando`s shares
for a consideration of 70 cents each on 1 January 2002 and invested the proceeds
at 8,81% (being the after-tax weighted average prime interest rate for the six
months ended 30 June 2002 less 2%).
3. The pro forma financial information under the column headed "After Disposal
and Specific Repurchase" assumes that, pursuant to the Disposal, Brimstone
repurchased (on 1 January 2002) 75 536 434 Brimstone ordinary and "N" ordinary
shares for a consideration equal to 63 cents per share plus interest of 8,81%
(being the after-tax weighted average prime interest rate for the six months
ended 30 June 2002 less 2%).
4. The pro forma financial information is shown after the Disposal and the
Specific Repurchase as the approval of the Disposal is a condition precedent to
the Specific Repurchase, which can, accordingly, not be implemented unless the
Disposal is effected.
5. Undertakings and commitments
Brimstone shareholders holding in aggregate 18 337 858 Brimstone ordinary shares
and 30 658 099 Brimstone "N" ordinary shares, representing a total of 50.3% of
the votes entitled to be cast at the Brimstone shareholder meetings, have given
irrevocable undertakings to vote in favour of the resolutions required to give
effect to the transactions.
6. Opinions and recommendations
Deloitte & Touche Corporate Finance has been appointed by the board of directors
of Brimstone ("Board") as an independent adviser to advise them as to the
fairness of the terms and conditions of each of the Specific Repurchase and the
Disposal. This advice, together with the recommendations of the Board, will be
included in the circular referred to below.
7. Documentation
A circular containing full details of the Specific Repurchase and the Disposal
will be posted to Brimstone shareholders in due course. A further announcement
regarding salient dates relevant to Brimstone shareholders will be made once
details of the salient dates of the Scheme are announced.
Cape Town
22 January 2003
Investment bank and sponsor
Nedbank Corporate
Corporate law advisers and consultants
Edward Nathan & Friedland (Pty) Ltd
Date: 22/01/2003 11:04:09 AM Produced by the JSE SENS Department
