| Wed 1 Oct 2003, 9:43 | | Moribo acquires 60% of ATL |
|
Moribo - Announcement regarding the acquisition of 60% of Attica Trading 10
(Pty) Ltd, a contract bottling plant, and withdrawal of the cautionary
announcement
MORIBO LEISURE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1919/001318/06)
Share code: MRB ISIN: ZAE000014023
("Moribo" or "the company")
Announcement regarding the acquisition of 60% of Attica Trading 10 (Pty) Ltd, a
contract bottling plant, and withdrawal of the cautionary announcement
1. INTRODUCTION
Shareholders are advised that Moribo has entered into agreements, subject to the
suspensive conditions set out in paragraph 5 below, whereby Moribo has acquired,
at the par value thereof, 60% of the issued share capital of Attica Trading 10
(Proprietary) Limited ("ATL"), which company has, subject to the fulfilment of
certain suspensive conditions, acquired the business of Sun Burst Manufacturing
CC ("Sunburst") for R11,2 million on loan account ("the bottling business").
Contemporaneously, Dreamwise Props 45 (Proprietary) Limited ("Propco"), a wholly
owned subsidiary of ATL, has acquired the land and buildings on which the
bottling business is conducted ("the property") from Erapimus Property CC
("Erapimus") for R4,5 million on loan account. The members of Sunburst and
Erapimus are Messrs WG Erasmus and A Pienaar.
Furthermore, Moribo has agreed to advance ATL R4 million, on loan account, in
order to facilitate the expansion and upgrading of ATL"s bottling plant ("the
advance").
Consequently, Sunburst"s total loan account in ATL will be R15,7 million. Moribo
will, contemporaneously with the acquisition of the aforesaid 60% shareholding
interest in ATL, acquire 60% of Sunburst"s aforesaid loan account, at face
value, for an amount of R7,82 million, which together with Moribo"s aforesaid R4
million loan account, will give Moribo a total loan account of R11,82 million in
ATL.
(Collectively, "the acquisition".)
The effective date is the first business day of the next calendar month after
the date on which the last suspensive condition has been fulfilled or waived.
2. INFORMATION ON THE BOTTLING BUSINESS
The contract bottling plant was erected on the Chichester Farm, Hekpoort,
Gauteng, in 2000. The plant currently has a capacity of two million litres per
month and contracts for bottling and packaging have been entered into with
several branded mineral water, alcoholic and non-alcoholic beverage companies.
3. RATIONALE FOR THE ACQUISITION
Moribo noted its intention in the results announcement for the six months ended
30 June 2003, and published on 30 September 2003, that the company was reviewing
a number of investment opportunities not necessarily in the gaming industry.
Moribo has spent considerable time and resources since September 2002 evaluating
the beverages sector, including but not limited to the production and sale of
mineral water, fruit juices and certain alcoholic beverages. These are
considered to be the fastest growth areas within this sector.
Moribo has considered many investment opportunities in this sector and has
concluded an agreement with Sunburst. Management of Sunburst have also agreed to
commit themselves through a management contract and will be paid out in
accordance with a future earn-out formula and will retain a 40% stake in ATL,
demonstrating their commitment to the bottling business. Furthermore, Sunburst
management"s rationale for concluding the transaction was to raise capital for
expansion purposes.
4. PURCHASE CONSIDERATION
The total purchase consideration of R7 820 060 is payable as follows:
- R1 000 060 in cash on the effective date;
R2 000 000 in cash twelve months after the effective date or the date on which
- the property is registered in the name of Propco, whichever date occurs last;
and
- the balance, if any, based on an earn-out formula calculated 15 months after
the effective date, using a multiple of 2.8 times ATL"s earnings before, inter
alia, interest and taxation, plus R4,5 million, being the value placed on the
property.
In the event of the above formula-calculated value of ATL being less than R7,0
million, Moribo shall acquire the remaining 40% of the equity of ATL at the par
value thereof, Sunburst"s shareholder loan in ATL shall be reduced to zero and
Sunburst will be obliged to pay Moribo in cash the difference between R7,0
million and the value as determined.
Similarly, should the value of ATL at the end of the earn-out period be less
than R11,7 million and greater than R7,0 million, the balance due shall be
deemed to be zero and Moribo"s equity will increase on a sliding scale, from 60%
to 100%, for a consideration equal to the par value of those shares, and
Sunburst"s shareholder loan in ATL will be reduced on a sliding scale.
Finally, should the value of ATL exceed R11,7 million, the balance due will be
sixty percent of the calculated value less R7,0 million, payable in cash.
5. SUSPENSIVE CONDITIONS
The acquisition is subject to, inter alia, the following suspensive conditions:
- the various agreements, including the Sale of Business Agreement and the Sale
of Property Agreement, becoming unconditional;
- due diligence exercise to be conducted by Moribo;
- approval of the acquisition by the shareholders of Moribo in general meeting;
approval of the JSE Securities Exchange South Africa ("JSE"); and
- the granting to ATL and/or Propco of a water use licence from the Department
of Water Affairs and Forestry.
6. FINANCIAL EFFECTS
The pro forma effects on Moribo"s earnings per share, headline earnings per
share, net asset value per share and net tangible asset value per share,
calculated using the assumptions set out below, are:
Before After Percentage
Six Six change
months months
ended ended
30 June 30 June
2003 2003
(%)
Earnings/(loss) per share 0,45 (0,31) (168,9)
(cents)
Headline earnings per share 0,45 1,00 122,2
(cents)
Net asset value per share 22,44 22,44 -
(cents)
Net tangible asset value per 22,44 9,31 (58,5)
share (cents)
Shares in issue (`000) 55 231 55 231 -
Weighted number of shares in 58 352 58 352 -
issue (`000)
The effect on the earnings per share and the headline earnings per share is
calculated by assuming that the 60% interest in ATL was acquired on 1 January
2003 and that the full purchase consideration of R7,2 million and loan advance
of R4,0 million was settled on that date.
The effect on the net asset value and net tangible asset value per share assumes
that the acquisition took place on 30 June 2003, and that the full purchase
consideration was settled on that date.
7. FURTHER DOCUMENTATION FOR SHAREHOLDERS
In compliance with the JSE Listings Requirements, a circular containing details
of the acquisition and incorporating a notice of general meeting of Moribo
shareholders will be mailed to shareholders in due course.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcements, the last of which was
dated 8 September 2003, and are advised that, with the publication of this
announcement, caution is no longer required to be exercised by shareholders when
dealing in their Moribo shares.
Johannesburg
1 October 2003
Merchant Bank and Sponsor to Moribo
Absa Corporate and Merchant Bank
Corporate Finance Department
Legal advisor
Bell Dewar Hall
Date: 01/10/2003 07:01:04 AM Produced by the JSE SENS Department
