| Mon 4 Aug 2003, 16:47 | | Change Of Control, Balance Sheet Restructuring, |
|
Zenith Concessions Limited -
Zenith Concessions Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1994/009012/06)
Share code: ZNT ISIN: ZAE000009064
("Zenith" or "the company")
CHANGE OF CONTROL, BALANCE SHEET RESTRUCTURING, CHANGE OF DIRECTORS AND
CAUTIONARY ANNOUNCEMENT
1. Change of Control
Radagast Capital (Pty) Ltd is authorised to announce that an agreement has been
reached whereby Gandalf Trust ("Gandalf") has acquired 146 422 973 ordinary
shares of 1 cent per share ("cps") each in the capital of Zenith for a total
purchase consideration of R300 000, equivalent to 0.205 cps. The acquisition is
subject to the conditions precedent set out in paragraph 5 below. The change in
control has been negotiated by the current controlling shareholders, Mr D Bird
and Mr S Crossland, ("Bird and Crossland") in an effort to stem the cash flow
and profitability difficulties being experienced by the company due, inter alia,
to the strong Rand. The shares have been purchased from Bird and Crossland and
represent 55% of the company"s issued share capital, constituting the
acquisition as an affected transaction.
2. BALANCE SHEET RESTRUCTURING
In terms of a further agreement reached with Gandalf, Bird and Crossland have
agreed to write off their loan accounts in the company, amounting to a combined
R2.0 million as per the management accounts at 31 May 2003, in exchange for
Gandalf extending a put option to them for the remainder of their shares. The
put option is exercisable nine months after the acceptance date for a period of
14 days. The strike price is 3cps if the 60-day trade-weighted share price is
less than 6cps, or 4cps if it is greater than 6cps. Gandalf also holds a call
option with a strike price of 10cps on 50% of the balance of stock that Bird and
Crossland each hold at the time that the call option is exercised.
In addition, 25 million shares that were issued at 2cps in 2002 as part payment
for the acquisition of diamond recovery rights, will be returned to the company
as part of the re-negotiation of this transaction concluded by Bird on behalf of
the company. Shareholders are referred to the revised listing particulars that
formed part of a circular posted on 4 September 2002 and the press announcement
of the same date. The shares are to be cancelled to the benefit of all
shareholders.
3. FINANCIAL EFFECTS
The table below sets out, for illustrative purposes only, the pro forma
financial effects of the cancellation of 25 million shares as well as of the
writing off of the loan accounts referred to above:
Unaudited Actual Pro forma % Change Pro forma % Change
results before share after share (Column B after share (Column
for the six- cancellation cancellation vs cancellation vs
month (Column A) (Column B) Column A) and writing Column B
period ended off of loan
31 December 2002 accounts
(Column C)
Notes: 1 2
Net asset value (0.28) (0.52) 85% 0.28 >100%
per share
(cents)
Net tangible (0.61) (0.67) 10% 0.12 >100%
asset value per
share (cents)
Earnings/(loss) (0.56) (0.61) 10% 0.18 >100%
per share
(cents)
Headline (0.56) (0.61) 10% (0.61) -
earnings/(loss)
per share
(cents)
Average and 265 552 240 552 -9% 240 552 -
weighted average
number of
ordinary shares
(`000)
Notes:
The reduction in the share capital and premium has been credited against
intangible assets.
The loans from Bird and Crossland amounted to R1.9 million at 31 December 2002
and these amounts have been used in the pro forma calculations. The
shareholder loans bear no interest and the gain arising from writing off the
loans has been credited to income.
The change in control and recapitalisation of the company will restore Zenith to
solvency.
4. OFFER TO MINORITIES
The Securities Regulation Panel has agreed to waive the requirement for a
mandatory offer to be made to the minority shareholders of the company on the
basis of the de minimus principle.
5. CONDITIONS PRECEDENT
The acquisition is subject, inter alia, to the following conditions precedent:
The proposals must result in the company injecting viable assets complying with
the JSE"s Listings Requirements;
The relevant documentation must be approved by the JSE; and
Gandalf Trust may not dispose of these shares until the completion of the
proposals and the JSE"s written consent thereto.
6. CIRCULAR TO SHAREHOLDERS
A circular pertaining to the repurchase and cancellation of the shares will be
sent to shareholders in due course.
7. CHANGES TO BOARD OF DIRECTORS
With effect from 4 August 2003, Messrs KJ Gribnitz, JP Nel, PE du Preez and Ms
PA Byrne will be appointed to the board of directors, while Messrs D Bird, S
Crossland, M Weetman and Ms W Bailey will tender their resignations.
8. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the new controlling shareholder is currently
engaged in negotiations on behalf of the company, which, if successfully
concluded, may have a material effect on the price of the company"s securities.
Shareholders are accordingly advised to exercise caution when dealing in the
company"s securities until a further announcement is made in this regard.
PRETORIA
4 August 2003
Transaction Advisor Restructuring Advisor
Radagast Capital (Pty) Ltd Gandalf Trust
Sponsor
LPC Manhattan (Pty) Ltd
Date: 04/08/2003 02:12:55 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
