| Wed 2 Apr 2003, 16:40 | | Amb/amb Partners - Proposed Specific Repurchase By |
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AMB/AMB Partners - Proposed Specific Repurchase By AMB And Detailed Joint
Cautionary Announcement
AMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/003054/06)
Share Code: AMB
ISIN: ZAE000029682
("AMB" or "the Company")
AMB PRIVATE EQUITY PARTNERS LIMITED
(Registration number 1998/015329/06)
(Incorporated in the Republic of South Africa)
Share code: APP
ISIN: ZAE000026936
("AMB Partners")
ANNOUNCEMENT REGARDING THE PROPOSED SPECIFIC REPURCHASE BY AMB OF:
* a maximum of 5 249 693 AMB shares currently held by employees of the Company
in terms of an Employee Loan Scheme ("Loan repurchase");
* a maximum of 4 040 740 AMB shares currently held by the AMB Holdings Limited
Share Incentive Trust ("Trust repurchase"); and
* 1 466 667 AMB shares currently held by Pamshop (Proprietary) Limited and
7 544 700 AMB shares currently held by Mount Sherman (Proprietary) Limited
("Pamodzi repurchase"),
(collectively referred to as "the repurchases"),
AND INCORPORATING A DETAILED JOINT CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
In recent years, a number of structures were put in place to facilitate the
acquisition of shares by empowerment groups and staff in AMB. These structures
involved the advancing of funding by AMB and/or its subsidiaries ("the AMB
Group") for the purchase of AMB shares where the only security for repayment and
the servicing of the loans was the underlying AMB shares. This is deemed not to
be the most effective utilisation of AMB"s capital and hence the Board of AMB
has resolved to cancel these shares and reduce AMB"s capital base accordingly.
These structures include:
1.1 The Employee Loan Scheme, in terms of which AMB advanced loans to
employees to facilitate the acquisition of the Company"s shares, as envisaged in
Section 38(2)(c) of the Companies Act, No 61 of 1973, as amended ("the Companies
Act");
1.2 The issue of shares to the AMB Holdings Limited Share Incentive Trust
("AMB Share Incentive Trust"), and the extension of an interest free loan in
respect of the subscription price of such shares. In terms of the Listings
Requirements of the JSE Securities Exchange South Africa ("JSE"), the AMB Share
Incentive Trust is obliged to dispose of those shares held by the AMB Share
Incentive Trust over which options have not been allocated; and
1.3 The advancing of preference share funding to Pamshop (Proprietary)
Limited ("Pamshop") and Mount Sherman (Proprietary) Limited ("Mount Sherman")
(the entire ordinary issued share capital of which companies is held by Pamodzi
Investment Holdings Limited ("Pamodzi")), to facilitate the acquisition by such
companies of AMB shares.
Under the circumstances, the board of directors of AMB is of the opinion that it
is in the best interests of AMB shareholders that these structures be unwound
through the implementation of the Loan repurchase, the Trust repurchase and the
Pamodzi repurchase.
2. CONDITIONS PRECEDENT
Implementation of each of the repurchases is subject to the fulfillment of the
following conditions precedent:
2.1 the obtaining of all relevant statutory and regulatory approvals,
including those of the JSE and Securities Regulation Panel; and
2.2 the passing by the requisite majority of AMB shareholders of a special
resolution approving the repurchase in question, and the registration of such
special resolution by the Registrar of Companies.
3. LOAN REPURCHASE
Subject to the fulfillment of the conditions precedent set out in paragraph 2
above, the Company will, prior to 30 September 2003, repurchase a maximum of
5 249 693 AMB shares currently held by the Company"s employees in terms of the
Employee Loan Scheme for a consideration equal to the lesser of:
3.1 the market value per AMB share as at the date of implementation of the
Loan repurchase; or
3.2 the amount outstanding per AMB share on such employees" loan accounts
with AMB as at the date of implementation of the Loan repurchase.
In terms of the Listings Requirements of the JSE, the employees who participated
in the Employee Loan Scheme will be precluded from voting in respect of any
special resolution to be proposed to approve and implement the Loan repurchase.
4. TRUST REPURCHASE
Subject to the fulfillment of the conditions precedent set out in paragraph 2
above, AMB will, prior to 30 June 2003, acquire a maximum of 4 040 740 AMB
shares from the AMB Share Incentive Trust for a purchase consideration per share
equal to the market value per share as at the date of implementation of the
Trust repurchase.
In terms of the Listings Requirements of the JSE, the AMB Share Incentive Trust
will be precluded from voting in respect of any special resolution to be
proposed to approve and implement the Trust repurchase.
5. PAMODZI REPURCHASE
Subject to the fulfillment of the conditions precedent set out in paragraph 2
above, AMB will repurchase:
5.1 1 466 667 AMB shares from Pamshop; and
5.2 7 544 700 AMB shares from Mount Sherman,
for a purchase consideration per share equal to the market value per share as at
date of implementation of the Pamodzi repurchase.
In terms of the Listings Requirements of the JSE, Pamshop and Mount Sherman will
be precluded from voting in respect of any special resolution to be proposed to
approve and implement the Pamodzi repurchase.
6. CASH FLOW EFFECT
Implementation of each of the Loan repurchase, the Trust repurchase and the
Pamodzi repurchase will have no material cash flow implications for the Company
as:
6.1 in the case of the Loan repurchase, the purchase consideration will be
discharged by the reduction of the employee loan accounts. It should be noted,
however, that if on implementation of the Loan repurchase, the amount
outstanding on the employee loan accounts is greater than R7,71 per AMB share
(being the price at which the employees acquired AMB shares in terms of the
Employee Loan Scheme) and the market value per AMB share is less than the amount
outstanding, then there will be cash flow implications for AMB due to additional
commitments assumed by AMB at the time of implementation of the Employee Loan
Scheme, which were designed to ensure that the employees did not suffer a loss
as a result of the unwinding of such scheme;
6.2 in the case of the Trust repurchase, the purchase consideration will be
discharged by the reduction of AMB"s claim against the AMB Share Incentive
Trust; and
6.3 in the case of the Pamodzi repurchase, the purchase consideration will be
discharged by the reduction of the AMB Group"s claim against each of Pamshop and
Mount Sherman for redemption of the preference share funding and payment of the
accrued return thereon.
7. PRO FORMA FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the repurchases on
the loss per share, headline loss per share, net asset value per share and
tangible net asset value per share, based on the audited consolidated financial
results for the year ended 30 September 2002, being the most recent reported
results of AMB. The pro forma financial effects have been calculated applying
the same accounting policies applied in AMB"s latest audited financial
statements:
Before After Percentage
Notes (cents) (cents) change
Loss per share 1 (141) (171) (21,3%)
Headline loss per share 1 (125) (152) (21,6%)
Net asset value per 2 906 955 5,4%
share
Tangible net asset value 2 906 955 5,4%
per share
Notes:
1. The "Before" column reflects the audited loss per share and headline loss
per share for the twelve months ended 30 September 2002, calculated on the
weighted average number of 106 409 796 shares in issue for the 12 month period
ended 30 September 2002. The "After" column indicates the pro forma loss per
share and headline loss per share, calculated on the assumption that the
repurchases were implemented on 1 October 2001 and that the consideration
payable was R6,55 per share.
2. The "Before" column reflects the audited net asset value per share and
audited tangible net asset value per share as at 30 September 2002, based on the
104 737 091 shares in issue on that date. The "After" column reflects the pro
forma net asset value per share and pro forma tangible net asset value per
share, assuming that the repurchases were concluded on 30 September 2002 at a
consideration of R6,55 per share and accordingly that there were 86 435 291
shares in issue on that date.
It is drawn to the attention of AMB shareholders that on 1 April 2003, the
closing price of an AMB share on the JSE was the amount of R6,05 per share, and
that the above financial effects have been calculated on the basis of R6,55 per
share.
8. WORKING CAPITAL STATEMENT
The Directors of AMB are of the view that for a period of at least twelve months
after date of implementation of the Loan repurchase, the Trust repurchase and
the Pamodzi repurchase:
* AMB and the AMB Group will be able in the ordinary course of business to
pay their debts;
* the assets of AMB and the AMB Group will be in excess of the liabilities of
AMB and the AMB Group;
* the ordinary capital and reserves of AMB and the AMB Group will be adequate
for the purpose of AMB"s and the AMB Group"s businesses respectively; and
* the working capital of AMB and the AMB Group will be adequate for their
requirements.
9. SALIENT DATES AND TIMES
2003
Last day to lodge forms of proxy for the Friday, 25 April
general meeting by 15h00 on
General meeting held at 15h00 on Tuesday, 29 April
Announcement of the results of the
general meeting made on SENS on or about Tuesday, 29 April
Announcement of the results of the
general meeting published in the press Wednesday, 30 April
on or about
Registration of special resolutions Monday, 5 May
approving the repurchases on or about
Implementation of the Pamodzi repurchase Monday, 12 May
on or about
Implementation of the Trust repurchase, Monday, 30 June
on or before
Implementation of the Loan repurchase, Tuesday, 30 September
on or before
Notes:
1. Any variation of the above dates and times, approved as necessary by the
JSE, will be advised by notification on SENS and in the press.
2. Dematerialised shareholders recorded in the register for voting must
provide their CSDP or broker with their instructions for attendance or voting at
the general meeting in the manner stipulated in the custody agreement governing
the relationship between such shareholders and the CSDP or broker. These
instructions must be provided to the CSDP or broker by the cut-off time and date
advised by the CSDP or broker for instructions of this nature.
10. GENERAL MEETING
A general meeting of AMB shareholders will be convened to be held at AMB"s
registered offices, situate at 18 Fricker Road, Illovo, Sandton on Tuesday,
29 April 2003 at 15h00, at which the resolutions necessary to approve and
implement the Loan repurchase, the Trust repurchase and the Pamodzi repurchase
will be considered. A circular containing full details of the repurchases and
incorporating a notice of general meeting will be posted to AMB shareholders on
or about 4 April 2003.
11. DETAILED JOINT CAUTIONARY ANNOUNCEMENT
Shareholders of AMB and unitholders of AMB Partners are referred to various
cautionary announcements published over the period October 2002 to March 2003
relating to discussions taking place between AMB and unitholders of AMB
Partners.
AMB Advisory Services Limited is authorised to announce that the discussions,
which are at an advanced stage, relate to a potential scheme of arrangement to
be proposed by AMB in terms of Section 311 of the Companies Act between AMB
Partners and its unitholders, excluding AMB and several unitholders which are
committed in principle to continued participation in an unlisted, restructured
entity or entities which will hold the AMB Partners assets. If proposed the
scheme is likely to be on the following conditions:
11.1 a take-out price of R12,25 per AMB Partners unit in cash, to be
discharged as follows:
11.1.1 an amount of R4,00 per AMB Partners unit, to be paid by AMB in
cash on or about the date of implementation of the scheme of arrangement
("implementation date"); and
11.1.2 an amount of R8,25 per AMB Partners unit, to be paid by a third
party discounter in cash on or about the implementation date, in consideration
for the transfer of the first promissory note and the second promissory note ,
as defined in paragraph 11.2 below; or
11.2 Where AMB Partners linked unitholders do not elect to receive the
consideration proposed in paragraph 11.1, a take-out price of R13,00 per AMB
Partners unit in cash, to be discharged as follows:
11.2.1 an amount of R4,00 per AMB Partners unit to be paid by AMB in cash
on or about the implementation date;
11.2.2 an amount of R4,50 per AMB Partners unit, plus interest accruing
thereon at a rate equal to the yield to maturity on the Republic of South Africa
Government Bond Code R153 ("R153"), as at the implementation date, for the
period from the implementation date to the payment date, being 30 September
2003. The obligation to effect this payment will be evidenced by a promissory
note issued by AMB to the AMB Partners linked unitholders ("first promissory
note"); and
11.2.3 an amount of R4,50 per AMB Partners unit, plus interest accruing
thereon at the R153 rate plus 50 basis points over the period from the
implementation date to the payment date, being 30 September 2004. The
obligation to effect this payment will be evidenced by a promissory note issued
by AMB to the AMB Partners linked unitholders ("second promissory note").
The information contained in this paragraph does not constitute an announcement
by AMB of a firm intention to make an offer to AMB Partners unitholders, and
discussions in this regard are still taking place at both an internal and
external level. Accordingly, AMB shareholders and AMB Partners unitholders are
advised to continue to exercise caution in dealing in their shares and units
respectively, until such time as a detailed announcement can be made in this
regard. It is anticipated that a more detailed announcement will be published
by no later than 16 April 2003.
Illovo
2 April 2003
Corporate adviser Joint sponsor Legal adviser
and joint sponsor
AMB Advisory Deloitte & Touche Webber Wentzel
Services Limited Sponsor Services Bowens
