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SEKUNJALO - ANNOUNCEMENT
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1996/006093/06)
Share Code : SKJ ISIN Code : ZAE000017893
("Sekunjalo" or "the company")
* UPDATE ON RESTRUCTURING OF THE SEKUNJALO GROUP
* INCREASE OF STAKE IN PREMIER FISHING SA (PROPRIETARY) LIMITED
* FURTHER CAUTIONARY ANNOUNCEMENT
1. Update on restructuring of the Sekunjalo Group ("the Group")
Shareholders are referred to the cautionary announcement dated 5 February 2001
and the various further cautionary announcements published thereafter and are
advised that the recapitalisation of the Group will be finalised through a
proposed rights offer, the terms of which will be announced in due course. The
restructuring of Sekunjalo"s fishing interests is now complete as detailed
below. Sekunjalo is currently attending to certain components of Sekunjalo
Health Care Limited, its healthcare business and shareholders will be kept
informed of any further developments in this regard.
2. Acquisition of additional interest in Premier Fishing
Further to the cautionary announcements published on 10 June and 29 July 2003
shareholders are informed that Sekunjalo has increased its effective stake in
Premier Fishing SA (Proprietary) Limited ("Premier Fishing") from 56% to 80%, by
means of two acquisitions the details of which are set out below.
2.1 The acquisitions
Sekunjalo acquired an additional interest of 24% in Premier Fishing by
increasing the stake of Sekunjalo Fishing (Proprietary) Limited ("Sekunjalo
Fishing"), a wholly-owned subsidiary of Sekunjalo, in Sekfish Investments
(Proprietary) Limited ("Sekfish") from 70% to 100% ("the acquisitions").
Sekfish holds an 80% interest in Premier Fishing and a workers" trust holds the
remaining 20%.
Sekunjalo Fishing acquired 18.5% of Sekfish from the Industrial Development
Corporation of South Africa Limited ("IDC") and a further 11.5% from The Skyman
Trust ("the acquisitions").
2.2 Rationale for the acquisitions
Sekunjalo, as a premier black economic empowerment company, has built
significant value over the past few years in Premier Fishing by strong active
management through its previous stake in that company. As a result of the
acquisitions Sekunjalo will now be able to unlock this value and that of further
developments for its shareholders.
Premier Fishing is the only large major black controlled and black managed
fishing company in South Africa and a large employer in areas such as the West
Coast. It is therefore in a position to extend its engagement of smaller group
and individual fishing operations in joint ventures and is a growth platform for
further acquisitions in the fishing industry. The current four-year fishing
rights allocation has facilitated further capital investment in the business and
allowed Premier Fishing to develop a long-term plan for the sustainable
utilisation of fishing resources. The strong presence of Premier Fishing in the
South and West Coast lobster areas contributes significantly to its export
income. Locally Premier Fishing dominates the fish-spread market with its Redro
and Pecks Anchovette brands.
2.3 Terms of the acquisitions
The acquisitions form part of a R70 million recapitalisation of the Sekunjalo
Fishing business by the business banking division of Nedcor Corporate. R12,312
million of the funds injected by Nedcor Corporate will be utilised to purchase
the 30% interest in Sekfish. The balance of the funds will be utilised to
replace debt provided by the IDC and to provide working capital for Premier
Fishing.
2.4 Financial effects
Based on the unaudited interim financial information of the company for the 6
months ended 28 February 2003, the pro forma financial effects of the
acquisitions on earnings per share, headline earnings per share, net asset value
per share and tangible net asset value per share are set out below.
These pro forma financial effects have been prepared for illustrative purposes
only and because of its nature, may not give a true picture of the company"s
financial position or results of operations.
Before After %
change
Earnings per share 1.51 2.48 64
Headline earnings per 2.03 3.56 75
share
Net asset value per share 0.09 0.09 -
Tangible net asset value (0.56) (0.77) (37)
per share(3)
Notes:
1. The "before" financial effects is based on the published unaudited interim
results of the group for the six months ended 28 February 2003.
2. The "after" pro forma financial effects have been prepared as if the
acquisitions took place on 1 September 2002.
3. Due to the debt funding being used to increase the equity stake in Premier
Fishing, the transaction effect reflects a decrease in tangible net asset value
as the value of the investment has not been revalued on the balance sheet.
2.5 Condition precedent
In terms of the aggregation rules contained in the Listings Requirements of the
JSE Securities Exchange South Africa ("JSE") the acquisition of the further
interest in Sekfish from The Skyman Trust constitutes a category 1 transaction
and is subject to the approval thereof by the shareholders of Sekunjalo in
general meeting.
3. General meeting and Documentation
A circular, which is subject to the approval of the JSE, containing full details
of a rights offer and the acquisitions and incorporating a notice convening a
general meeting of Sekunjalo shareholders to approve the rights offer and the
acquisition of the interest of The Skyman Trust (`the circular") is in the
course of preparation and will be posted to Sekunjalo shareholders in due
course. Shareholders are further advised that shareholders controlling 75% of
the votes in Sekunjalo have given an irrevocable undertaking to vote in favour
of the acquisitions at the general meeting.
4. Further cautionary announcement
As stated above shareholders are informed that the company is currently
finalising the terms of a rights offer. This may have an effect on the price at
which Sekunjalo shares trade on the JSE and shareholders are therefore advised
to continue to exercise caution when dealing in their Sekunjalo shares until a
detailed announcement is made.
Cape Town
27 August 2003
Corporate Advisor Attorneys
and Sponsor
Mallinicks
Sasfin Attorneys
Corporate Finance
A division of
Sasfin Bank Limited
Date: 28/08/2003 03:53:35 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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