| Wed 13 Aug 2003, 16:39 | | Realisation Of Investment In Vestacor |
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CPA
Corpcapital Limited - Realisation Of Investment In Vestacor And Further
Cautionary
CORPCAPITAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1983/011384/06)
Share code: CPA ISIN: ZAE 000034260
("Corpcapital" or "the company")
REALISATION OF INVESTMENT IN VESTACOR AND FURTHER CAUTIONARY
1. Introduction
Java Capital (Proprietary) Limited is authorised to announce that Corpcapital
Investments (Proprietary) Limited ("Corpcapital Investments"), a wholly- owned
subsidiary of Corpcapital, has concluded an agreement with a consortium
represented by Gerald Rubenstein ("the consortium") pursuant to which, subject
to the fulfilment of the condition precedent set out in paragraph 4 below (the
"condition precedent"), will result in the realisation of Corpcapital
Investment"s investment in Vestacor Limited ("Vestacor") ("the realisation").
2. The realisation
Corpcapital Investments has agreed that, subject to the fulfilment of the
condition precedent, Corpcapital Investments shall accept an offer (which offer
the consortium has contractually undertaken to make) to acquire from all
remaining shareholders in Vestacor (including Corpcapital Investments)
(collectively, the "remaining Vestacor shareholders") their Vestacor shares for
a consideration of 37,4 cents per share (the "consortium offer"). The aggregate
proceeds to be paid by the consortium to Corpcapital Investments in respect of
Corpcapital Investment"s 91 997 665 Vestacor shares will be R34 409 940. The
consortium offer will be made to the remaining Vestacor shareholders in
compliance with the Securities Regulation Code on Takeovers and Mergers and the
Rules of the Securities Regulation Panel.
The acceptance by Corpcapital of the consortium offer is conditional on
Vestacor having declared:
* and made payment to its shareholders R213 763 649 by way of reduction of
Vestacor"s capital (of which R105 442 647 will be paid to Corpcapital
Investments in respect of its shareholding in Vestacor) (the "capital
distribution"); and
* a dividend (the "agterskot distribution") in an amount equal to all amounts
and benefits due to Vestacor arising from the realisation of certain of
Vestacor"s assets which is anticipated to be approximately R18,6 million (of
which R9,0 million will be paid to Corpcapital Investments in respect of its
shareholding in Vestacor).
The consortium offer, the capital distribution and the agterskot distribution
are, collectively, referred to herein as "the transaction".
The aggregate proceeds to be received by Corpcapital Investments pursuant to
the transaction (including any proceeds from the agterskot distribution which
are anticipated to be approximately R9,0 million) is R148,9 million.
3. Rationale for the transaction
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 transaction is in line with this
strategy.
4. Condition precedent
The acceptance of the consortium offer is conditional on Corpcapital having
received from Vestacor, by no later than 30 November 2003, payment of the
capital distribution .
The payment of the capital distribution is conditional upon the funding
arrangements concluded by Vestacor becoming unconditional, the last condition of
which is expected to be Competition Commission approval by not later than 30
November 2003.
5. Return of capital
The strategy outlined in paragraph 3 above envisages returning capital to
shareholders. Accordingly the proceeds of the transaction which are not required
in order to maintain the company"s sound financial position will be distributed
to shareholders.
A further announcement in this regard will be published as soon as possible.
6. Financial effects
The net asset value of the investment in Vestacor as at 28 February 2003 was
R90,3 million. The aggregate proceeds to be received by Corpcapital Investments
pursuant to the transaction (including any proceeds from the agterskot
distribution which are anticipated to be approximately R9,0 million) of R148,9
million, results in an uplift in net asset value of R40,8 million.
Shareholders are referred to the announcement dated 8 August 2003 relating to
the disposal by Corpcapital of the business carried on by Corpgro Industrial and
Building Supplies (Proprietary) Limited ("the Corpbuild disposal") in which the
financial effects of the Corpbuild disposal on Corpcapital are set out. The
Corpbuild disposal has not been taken into account in preparing these financial
effects.
The pro forma financial effects of the transaction set out in the table below
have been prepared for illustrative purposes only to provide information on how
the transaction 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 transaction 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 transaction 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
Before1 transaction Change
Note (cents) (cents) (%)
Earnings per share 2 (2,7) 10,1 -
Headline earnings per share 2 19,8 32,3 62,9
Net asset value per share 3 228,1 240,5 5,4
Net tangible asset value per share 3 213,6 232,3 8,8
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 and headline earnings per share calculation in the
"After the transaction" column is based on the following assumptions:
* the transaction was effective 2 December 2002, being the date on which
Corpcapital Investments originally acquired its investment in Vestacor;
* interest would have been earned on the proceeds of the transaction 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 an after-tax profit (assuming a tax rate of 30%)
on the disposal equivalent to R50,2 million;
* the agterskot distribution would have amounted to R9,0 million; and
* Corpcapital had a weighted average of 340 850 166 shares in issue during the
period.
3. Net asset and tangible asset value per share are based on the following
assumptions:
* the transaction was effective 28 February 2003;
* the net asset value and net tangible asset value of Vestacor reflected on the
balance sheet of Corpcapital as at 28 February 2003 was R90,3 million and
R69,2 million, respectively;
* the agterskot distribution would have amounted to R9,0 million; and
* Corpcapital had 331 091 744 shares in issue at 28 February 2003, excluding
treasury shares.
7. Documentation
A circular, containing details of the transaction, will be posted to
shareholders in due course.
8. Further cautionary
Corpcapital is still involved in negotiations pertaining to the realisation
of certain 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
13 August 2003
Corporate advisor and sponsor to Corpcapital
JAVA CAPITAL
Legal advisor to Corpcapital
JAVA CAPITAL
Reporting accountants and auditors
Fisher Hoffman PKF (Jhb) Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration number 1994/001166/21)
