| Fri 8 Aug 2003, 10:01 | | Disposal Of Corpbuild and further cautionary anno |
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Corpcapital Limited -
(Incorporated in the Republic of South Africa)
(Registration number 1983/011384/06)
Share code: CPA ISIN: ZAE 000034260
("Corpcapital" or "the company")
DISPOSAL OF CORPBUILD
1. Introduction
Java Capital (Proprietary) Limited is authorised to announce that,
Corpcapital has concluded an agreement ("the sale agreement") with Iliad Africa
Limited ("Iliad") in terms of which the business ("the business") carried on by
Corpgro Industrial and Building Supplies (Proprietary) Limited ("Corpbuild")
has, subject to the fulfilment of the conditions precedent set out in paragraph
4 below, been disposed of to Iliad as a going concern ("the disposal").
Corpbuild is a wholly-owned subsidiary of Corpcapital. It supplies building
materials and hardware to the building, construction and allied markets.
2. The disposal
Iliad has agreed to acquire the business with effect from 1 July 2003. The
purchase consideration for the business will be discharged by the issue of 46
000 000 Iliad shares ("the Iliad shares") and the payment of R125,0 million in
cash ("the cash consideration"). The cash consideration shall accrue interest at
the prime overdraft rate from 1 July 2003 until the date of payment. The Iliad
shares will be acquired cum dividend, Iliad having undertaken not to declare a
dividend until the Iliad shares have been issued.
3. Rationale for the disposal
On 28 February 2003 Corpcapital announced a strategy to unlock value for
shareholders by the responsible realisation of the company"s investments and the
return of capital to shareholders. The disposal is in line with this strategy.
4. Conditions precedent
The disposal is subject to the fulfilment of the following conditions
precedent:
* the approval of the Corpcapital shareholders in general meeting by no later
than 30 October 2003;
* the approval of the Iliad shareholders in general meeting by no later than 30
October 2003. In this regard, Iliad has furnished Corpcapital with unconditional
and irrevocable letters of undertaking from Iliad shareholders holding in excess
of 50% of Iliad"s current share capital to vote in favour of the disposal;
* the furnishing by Iliad by no later than 20 August 2003 of confirmation to
the reasonable satisfaction of Corpcapital that Iliad has the ability to
timeously discharge the cash consideration; and
* all requisite regulatory approvals including to the extent necessary, the
approval of the JSE by no later than 30 October 2003 and the Competition
Commission by no later than 31 December 2003.
5. Return of capital
The strategy envisages returning capital to shareholders, accordingly the
proceeds of the disposal which are not required in order to maintain the
company"s sound financial position will be distributed to shareholders.
In terms of the sale agreement, Corpcapital has undertaken, as soon as
reasonably practicable after the fulfilment of the last condition precedent,
which is expected to be Competition Commission approval, to either:
* distribute the Iliad shares to its shareholders; or
* place the Iliad shares with a company and/or institution approved of by Iliad.
A further announcement in this regard will be published as soon as possible.
6. Financial effects
The net asset value and net tangible asset value of the business as at
28 February 2003 was R160,6 million and R158,9 million respectively. On the
assumption that the Iliad shares have a value of 300 cents each being the price
at which Iliad has announced its intention to place Iliad shares for purposes of
the transaction, the purchase consideration received by Corpcapital for the
business will be R263,0 million, an uplift in net asset value of R102,4 million.
For the half year ended 28 February 2003 the business contributed
R24,2 million of earnings to Corpcapital. As from 1 July 2003 Corpbuild"s
earnings will accrue to Iliad and Corpcapital will earn interest on the cash
consideration and will subject to any distribution by Corpcapital to
shareholders be entitled to receive dividends on the Iliad shares.
The pro forma financial effects of the disposal set out in the table below
have been prepared for illustrative purposes only to provide information on how
the disposal may have impacted on the results and financial position of
Corpcapital for the six months ended 28 February 2003. Because of their nature,
the pro forma financial effects may not give a fair reflection of Corpcapital"s
financial position after the disposal or the effect on future earnings. These
pro forma financial effects do not reflect any changes to Corpcapital"s
financial position post 28 February 2003. The current financial position of the
company after the disposal and the effect thereof on future earnings will in the
ordinary course be reported in the company"s annual results as at 31 August
2003.
After the
disposal
and after the
distribution 5
After the
Before1 disposal Change
Note (cents) (cents) (%) (cents)
Earnings per share 2 (2,7) 26,5 - 26,5
Headline earnings per share 3 19,8 16,4 (16,9) 16,4
Net asset value per share 4 228,1 259,1 13,6 217,4
Net tangible asset value
per share 4 213,6 245,0 14,7 203,3
Notes:
1. The figures in the "Before" column were extracted from the unaudited interim
results of Corpcapital for the six months ended 28 February 2003 ("the period").
2. The earnings per share calculation in the "After the disposal" and "After
the disposal and distribution" columns are based on the following assumptions:
* the disposal was effective 1 September 2002;
* interest would have been earned on the cash consideration for the period at an
after tax interest rate of 11,3% being Corpcapital"s net after tax cost of
funding for the period;
* Corpcapital would have earned a capital profit on the disposal equivalent to
R111,1 million being the difference between the sum of the cash consideration
and the Iliad shares (assuming a value of 300 cents per Iliad share) and the net
asset value of Corpbuild of R151,9 million as at 1 September 2002 ("the capital
profit");
* a dividend of 12 cents per share would have been received on the Iliad shares
for the period; and
* Corpcapital had a weighted average of 340 850 166 shares in issue during the
period.
3. The headline earnings per share calculation in the "After the disposal" and
"After the disposal and distribution" columns are based on the same assumptions
as the earnings per share calculation except for the exclusion from headline
earnings of the capital profit.
4. Net asset and tangible asset value per share are based on the following
assumptions:
* the net asset value and net tangible asset value of Corpbuild reflected on the
balance sheet of Corpcapital as at 28 February 2003 was R160,6 million and
R158,9 million respectively;
* a value of 300 cents per share, would have been attributed to the Iliad shares
being the price at which Iliad will place shares with specifically identified
institutions; and
* Corpcapital had 331 091 744 shares in issue at 28 February 2003 excluding
treasury shares.
5. The "After the disposal and distribution" column has been included for the
purposes of providing additional information only. The calculation assumes that
a distribution of 13,89 Iliad shares per 100 Corpcapital shares would have been
made to Corpcapital shareholders on 28 February 2003 assuming that there were
331 091 744 Corpcapital shares in issue (excluding treasury shares and shares
held by the share incentive trust). This equates to a distribution of 42 cents
per Corpcapital share based on a value of 300 cents per Iliad share being the
price at which Iliad will place shares with specifically identified
institutions.
7. Salient dates and times
The salient dates and times of the disposal are as set out in the table below:
2003
General meeting of Corpcapital shareholders to be
held at 09:00 Monday, 15 September
General meeting of Iliad shareholders to be
held at 10:00 Monday, 15 September
Results of general meetings released on SENS Monday, 15 September
Results of general meetings published in the press Tuesday, 16 September
Estimated date by which Competition Commission
approval should be obtained Friday, 14 November
These dates and times may be changed at the instance of the company. Any
changes will be published in the press and on SENS.
8. Documentation
A circular containing details of the disposal, will be posted to
shareholders in due course.
9. Further cautionary
Corpcapital is still involved in negotiations pertaining to the realisation
of its other investments which, if successfully concluded, may have a material
effect on the price of the company"s shares. Accordingly, holders of the
company"s shares are advised to continue exercising caution when dealing in
Corpcapital shares.
Rosebank
7 August 2003
Corporate advisor and sponsor to Corpcapital
JAVACAPITAL
Legal advisor to Corpcapital
JAVACAPITAL
Reporting accountants and auditors
FISHERHOFFMANSITHOLE
Chartered Accountants (SA)
Registered Accountants and Auditors
Date: 08/08/2003 07:02:08 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
