| Tue 29 Apr 2003, 17:19 | | Congella Federation Limited - Company Announcement |
|
Congella Federation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1947/025767/06)
Ordinary shares
Share code: CNF ISIN: ZAE000001624
Preference shares
Share code: CNFP ISIN: ZAE000001632
("ConFed" or "the Company")
ANNOUNCEMENT REGARDING THE PROPOSED:
* disposal by ConFed of its property portfolio to Pangbourne
Properties Limited ("Pangbourne");
* cash distribution by ConFed in anticipation of a members" voluntary
winding-up;
* suspension and termination of the listing of ConFed; and
* members" voluntary winding-up of ConFed in terms of sections 349
and 350 of the Companies Act, 1973 (Act 61 of 1973), as amended
(the "Companies Act").
(the "Transaction")
1. Introduction
ConFed announced in the press and on the Securities Exchange News Service
("SENS") on 19 March 2003, that Commercial Finance Company Limited ("CFC"), the
controlling shareholder of ConFed, was placed into voluntary liquidation on 20
December 2002 and that tenders were being invited for the property portfolio of,
or alternatively, the shares in ConFed.
Nedbank Corporate is authorised to announce that the tender process closed on
28 March 2003 and that the board of directors of ConFed has accepted, subject to
the conditions precedent detailed in paragraph 5.1 below, an offer from
Pangbourne to acquire the entire property portfolio of ConFed, as a going
concern, for a disposal consideration of R88 295 000 (the "disposal").
2. Background on ConFed
ConFed was incorporated and listed on the JSE Securities Exchange South
Africa ("JSE") during 1947, with the sole objective of being an investment
holding company with investments in property and listed shares. The Company"s
investments consist of a property portfolio of 11 industrial properties based in
KwaZulu-Natal and shareholdings in JSE-listed companies.
3. Rationale for the Transaction
As ConFed"s holding company, CFC was placed into voluntary liquidation,
ConFed has been left in a position where it will not have the support and
strategic backing of its controlling shareholder going forward. As a result, the
board of directors of ConFed believes that the interests of shareholders will
best be served by a disposal of the assets and a members" voluntary winding-up.
The board of directors of ConFed also believes that the organised tender process
that was undertaken has resulted in the optimal value being unlocked for its
shareholders.
4. Terms of the transaction
4.1 The disposal
Pursuant to the closure of the tender process, the board of directors of
ConFed has resolved to accept an offer from Pangbourne. In terms of the offer,
Pangbourne will, subject to the fulfilment of the conditions precedent as set
out in paragraph 5.1 below, acquire the entire property portfolio of ConFed, as
a going concern, for an aggregate cash consideration of R88 295 000. The cash
consideration will be paid by Pangbourne to ConFed on transfer of the
properties.
4.2 Realisation of listed investments
ConFed will, in anticipation of the cash distribution and members" voluntary
winding-up of the Company, as set out in paragraph 4.3 below, commence the
process of realising its listed investments.
4.3 The cash distribution
Subject to the fulfilment of the conditions precedent detailed in paragraph 5
below and pursuant to the receipt of the cash consideration in terms of the
disposal and the realisation of the listed investments, a cash distribution will
be made to ConFed shareholders in anticipation of a members" voluntary winding-
up of the Company.
The exact quantum of the cash distribution has not been finalised and will be
dependant on the proceeds of the realisation of the listed investments, the
liquidation and realisation costs and the impact of tax legislation on the
Transaction. It is expected that an initial cash distribution will be in the
order of R95,00 per ordinary ConFed share. The remaining cash, if any, will be
distributed to ConFed ordinary shareholders registered as such by way of a final
liquidation distribution as detailed in paragraph 7 below.
As the transfer of the properties in terms of the disposal can only commence
once the disposal is unconditional, the exact timing of the distribution will
only be announced once the Transaction has become unconditional. The estimated
dates and times of the cash distribution will be set out in a circular to
shareholders to be sent in terms of paragraph 9 below.
5. Conditions precedent
5.1 The disposal is subject to the fulfilment of, inter alia, the following
conditions precedent, which must be fulfilled within 90 days of acceptance of
the offer by the board of directors of ConFed, whereafter ConFed shall have the
right to cancel the disposal:
- the approval of all the requisite ordinary resolutions by ConFed shareholders
in a general meeting to give effect to the disposal in accordance with section
228 of the Companies Act;
- approval of the JSE and the Securities Regulation Panel ("SRP"); and
- approval of the Competition Authorities.
5.2 The cash distribution is subject to the fulfilment of the following
conditions precedent:
- the disposal becoming unconditional;
- the approval of the requisite ordinary and special resolutions by ConFed
shareholders in a general meeting; and
- the registration of all the special resolutions by the Registrar of Companies.
6. Financial effects of the disposal
The table below sets out the financial effects of the disposal on the
earnings, headline earnings, net asset value (at book and market value) and
market value per ordinary ConFed share, "Before" the Transaction, "After
disposal of property portfolio and related costs" and "After disposal of
property portfolio and related costs, realisation of listed investments,
expenses and taxes relating to the winding-up".
After disposal of
property portfolio and
related costs,
realisation of
listed investments,
After disposal of expenses and
property portfolio taxes relating
and related to the
winding-up
Before costs Change (Rand per- Change
Notes (Rand per share) (Rand per share) (%) share) (%)
Earnings 2 13,26 17,78 (34,09) 18,15 (36,88)
Headline
earnings 2 6,92 6,14 (11,27) 6,20 (10,41)
Net asset
value - book
earnings 2 6,92 6,14 (11,27) 6,20 (10,41)
value 92,05 101,24 9,98 101,07 9,80
Net asset
value - market
value 3 103,35 112,54 8,89 101,07 (2,21)
Market value 4 83,00 110,00 32,53 98,52 18,70
Notes:
1. The "Before" column represents the actual reported financial information for
the 12 months ended 31 December 2002. The "After disposal of property portfolio
and related costs" column reflects the effect on income going forward and the
financial position for the same period had the disposal been effected on 1
January 2002 and 31 December 2002, respectively. The "After disposal of property
portfolio and related costs, realisation of listed investments, expenses and
taxes relating to the winding-up" column reflects the effect on income going
forward and the financial position for the same period assuming costs and
expenses relating to the winding-up of the Company are provided for had the
Transaction been effected on 1 January 2002 and 31 December 2002, respectively.
2. The "After disposal of property portfolio and related costs" column and the
"After disposal of property portfolio and related costs, realisation of listed
investments, expenses and taxes relating to the winding-up" column assumes that
the funds received had been invested at 8,27% p.a. before tax, being the average
deposit rate received by ConFed for the period.
3. The net asset value - market value is based on the market value of listed
investments at 31 December 2002.
4. The market value is based on the closing market prices on 24 April 2003, the
last practicable date prior to the finalisation of this announcement.
5. The next asset value - book value of the Company before the Transaction
is R77 965 922.
6. The Company has no intangible assets.
7. Termination of listing and members" voluntary winding-up of ConFed
Subject to the fulfilment of the conditions precedent set out in paragraph 5
above, application will be made to the JSE for the suspension and termination of
the listing of ConFed, whereafter the Company will be wound-up in terms of
sections 349 and 350 of the Companies Act by way of a members" voluntary winding
up.
After the settlement of the costs associated with the members" voluntary
winding-up and confirmation of the final liquidation and distribution account to
the satisfaction of the Master of the High Court of South Africa, the remaining
cash, if any, will be distributed to ConFed ordinary shareholders registered as
such by way of a final liquidation distribution.
The relevant dates and times for the suspension and termination of the
listing of ConFed and the winding-up of the Company will be announced in the
press and on SENS.
8. Opinions and recommendations
The disposal constitutes an affected transaction in terms of the SRP Code on
Take-overs and Mergers and accordingly, the board of directors of ConFed is
obliged to seek appropriate independent advice on the terms of the disposal.
The board of directors of ConFed has appointed Marriott Merchant Bank Limited
as independent advisor. The opinion of the independent advisor and the opinion
and recommendation of the board of directors of ConFed will be set out in the
circular to be sent to shareholders in terms of paragraph 9 below.
9. Circular to shareholders
A circular to shareholders containing full details of the Transaction and
convening a general meeting of ConFed shareholders to vote on the requisite
ordinary and special resolutions to give effect to the Transaction will be
posted on or about 30 May 2003.
10. Cash confirmation
ABSA Bank Limited has confirmed to the SRP that Pangbourne has sufficient
cash resources to satisfy its full obligations in terms of the disposal.
11. Cautionary announcement
Shareholders are advised to continue exercising caution until a further
announcement is made containing details of the date of the initial cash
distribution.
Durban
29 April 2003
Investment bank and sponsor
NEDBANK CORPORATE
Attorneys
COX YEATS ATTORNEYS
Reporting accountants and auditors
KPMG
Independent advisor
MARRIOTT MERCHANT BANK
