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AVA
AVASA - General issue of shares for cash
AVASA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: AVA ISIN: ZAE000040622
("AVASA" or "the Company")
General issue of shares for cash
1. Introduction
Shareholders are advised that AVASA has successfully completed an issue of
some 75,8 million shares for cash. The issue has been made in terms of the
general authority granted to the Board at the annual general meeting held on
Friday, 20 December 2002.
The shares have been issued to:
- involve additional high profile businessmen in the shareholder base;
- strengthen AVASA"s deal flow; and
- further increase the cash resources of AVASA.
On 9 June 2003 AVASA"s Board entered into an agreement with inter alia, a
local high profile investor and an offshore corporate, each being unrelated
members of the "public" as defined in the listings requirements of the JSE
Securities Exchange South Africa ("JSE"), to collectively subscribe for some
75,8 million new ordinary shares of 0,1 cents each ("new AVASA shares") at an
issue price of 14 cents each. These shares represent some 15,0% of the Company"s
current issued share capital (prior to the issue) and their issue will
consequently increase the number of AVASA shares in issue from 505 million to
580,8 million (post the above transaction). The issue price represents a
discount of some 9,0% to the weighted average traded share price of AVASA"s
shares on the JSE in the 30 business days prior to the date on which the terms
were agreed (namely 9 June 2003) of 15,4 cents per share.
An application has been made to the JSE for the listing of the new AVASA
shares with effect from Monday, 28 July 2003.
2. Rationale for the allotment and issue and the application of the funds
derived there from
This issue has been made in line with AVASA"s strategy of further
strengthening its position in the South African marketplace and bolstering its
balance sheet and cash reserves to take advantage of any forthcoming
opportunities for its particular style of value investment.
3. Pro forma financial effects of the general issue of shares for cash
Set out below are the pro forma financial effects of the issue of
approximately 75,8 million new AVASA shares for cash at an issue price of 14
cents per share on:
- Earnings and headline earnings per share for the interim financial period
ended 28 February 2003; and
- Net asset value ("NAV") and net tangible asset value ("NTAV") per share for
the six-month period ended 28 February 2003, prepared on the following basis:
i. The calculations set out below are based on the audited results of AVASA
for the six-month period ended 28 February 2003;
ii. The effect of the issue on earnings and headline earnings per share has
been calculated on the assumption that the new AVASA shares were issued on 1
September 2002 (being the first day of AVASA"s last reporting period). It has
been further assumed that the net proceeds of the issue were invested in an
interest bearing account at a pre tax rate of 12% or 8,4% expressed as an after
tax rate (based on the maximum corporate tax rate of 30%) for the
six-month period ending 28 February 2003; and
iii. The effect of the issue on NAV and NTAV has been calculated on the
assumption that the new AVASA shares were issued on 28 February 2003.
Before the issue
28 February
2003
(cents) After the Change
(Audited) issue (cents) %
(Loss) per share (0,82) (0,61) 25,6
Headline (loss) per share (0,82) (0,61) 25,6
Net asset value per share 2,43 4,10 68,7
Net tangible asset value per share 2,43 4,10 68,7
Number of shares ("000) 505 000* 580 750 15,0
* The number of shares in issue as published in the audited interim results
announcement on 30 May 2003 was 495 million and not 505 million as reflected
herein. The reason for the difference was that 10 million shares which were to
be allotted and issued to one of the placees (reflected in the circular dated 20
December 2002) were not in fact allotted and issued until after the completion
of the interim period. The effect on the pro forma income effects of this charge
to the denominator in the "before" column and the after column are not material.
Sandton
25 July 2003
Corporate advisor and sponsor
Ernst & Young Sponsors (Pty) Ltd
(Registration number 2000/031843/07)
Legal advisors
Routledge-Modise Attorneys
Established 1892
Independent auditors
Compendium (Pretoria) Incorporated
(Registration number 2000/004461/21)
Date: 24/07/2003 05:59:53 PM Produced by the JSE SENS Department
