| Thu 16 Oct 2003, 16:56 | | Rand Leases / JCI - Scheme Of Arrangement To Be Pr |
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Rand Leases / JCI - Scheme Of Arrangement To Be Proposed By JCI Between Rand
Leases And The Holders (Other Than JCI) Of Its Linked Units
Rand Leases Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1978/000870/06)
Share code: RPR ISIN: ZAE000028254
(Rand Leases or the company)
JCI Limited
(formerly Consolidated African Mines Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
Share code: JCD ISIN: ZAE000039681
(JCI)
SCHEME OF ARRANGEMENT TO BE PROPOSED BY JCI BETWEEN RAND LEASES
AND THE HOLDERS (OTHER THAN JCI) OF ITS LINKED UNITS
(The Rand Leases minority linked unitholders)
1. THE SCHEME
1.1 JCI will propose a scheme of arrangement in terms of section
311 of the Companies Act, 1973 (Act 61 of 1973), as amended (the
scheme) between Rand Leases and the Rand Leases minority linked
unitholders holding 65,8% of Rand Leases linked units (linked
units), which on implementation will result in:
- JCI acquiring the linked units held by the Rand Leases minority
linked unitholders in exchange for
1,5 JCI ordinary shares for each linked unit;
- Rand Leases becoming a wholly-owned subsidiary of JCI; and
- the listing of Rand Leases on the JSE Securities Exchange South
Africa (the JSE) being terminated.
1.2 The implementation of the scheme shall be subject to:
- the scheme being approved by a majority representing not less
than 75% of the votes exercisable by the Rand Leases minority
linked unitholders present and voting, either in person or by
proxy, at a scheme meeting of Rand Leases minority linked
unitholders;
- the scheme being sanctioned by the High Court of South Africa
and the Order of Court sanctioning the scheme being registered by
the Registrar of Companies; and
- approval by the relevant regulatory authorities, including The
Competition Commission, the JSE and the Securities Regulation
Panel (the SRP).
1.3 In the event of the scheme not being approved and implemented
and subject to Competition Commission approval, JCI will make an
offer to the Rand Leases minority linked unitholders on the same
terms as the scheme. In addition, the directors of Rand Leases
will propose the termination of the listing of Rand Leases on the
JSE.
2. RATIONALE FOR THE SCHEME
The implementation of the scheme:
- will eliminate potential for conflicts of interest between JCI
and Rand Leases in the development of properties, inter alia, no
longer required for mining purposes following the disposal by
Rand Leases of its entire investment property portfolio and its
repositioning as a property development company;
- recognises that the companys listing is under threat of
suspension as the net assets and income attributable to the
companys holding of linked units in Redefine Income Fund Limited
presently exceeds the proportions permissible in terms of the
Listings Requirements of the JSE;
- will save the cost of maintaining Rand Leases as a separately
listed company, the benefits of which are restricted by the small
market capitalisation and public free float of linked units and
the attendant illiquidity of such linked units;
- will enhance the tradeability of the investment of the Rand
Leases minority linked unitholders due to the greater
tradeability of the JCI shares they will receive over the
illiquid linked units; and
- will afford the Rand Leases minority linked unitholders the
opportunity to realise their linked units at a premium to the
prevailing Rand Leases market price.
3. PRO FORMA FINANCIAL EFFECTS OF THE SCHEME
The pro forma financial effects of the scheme on JCI and the
Rand Leases minority linked unitholders are presented below for
illustrative purposes only and are based on the published
reviewed results of Rand Leases for the year ended 30 June 2003
and the audited results of JCI for the year ended 31 March 2003.
3.1 On JCI
Before After (3) Change
Per share (cents) (cents) (cents)
Earnings 13,9(1) 11,5 (2,4)
Headline earnings 5,1(1) 3,7 (1,4)
Net asset value 46,1(1) 49,3 3,2
Adjusted net asset value 134,0(1) (2) 135,0 1,0
Notes:
1. Extracted from the audited financial statements of JCI for the
year ended 31 March 2003.
2. The adjusted net asset value is based on the market price of
JCIs listed investments on the last practicable trading date
before publication of this announcement, post balance sheet
events and the directors valuation of underlying unlisted assets
at 31 March 2003.
3. Takes account of post balance sheet events as disclosed in the
directors report of JCI for the year ended 31 March 2003 and the
Barnato Exploration Limited scheme of arrangement.
3.2 On the Rand Leases minority linked unitholders
Before After (3) Change
Per share (cents) (cents) (cents)
Headline earnings (6,0)(1) 17,2 23,2
Fully diluted earnings (3,7)(1) 5,5 9,2
Net asset value 186,8(1) 74,0 (112,8)
Adjusted net asset value 172,7(2) 204,6 31,9
Market price 45,0(3) 108,0(3) 63,0
Notes:
1. Extracted from the published reviewed results of Rand Leases
for the year ended 30 June 2003.
2. The adjusted net asset value is based on the market price of
Rand Leases listed investments and the directors valuation of
underlying unlisted assets.
3. Based on the market price of Rand Leases linked units and JCI
shares on the last practicable trading date before publication of
this announcement.
4. OPINIONS AND RECOMMENDATIONS
In terms of the SRP Code on Take-overs and Mergers, the board
of Rand Leases has appointed Newfound Capital to advise on the
scheme and to make appropriate recommendations to the Rand Leases
minority linked unitholders and the directors.
5. DOCUMENTATION AND SALIENT DATES
5.1 Full details of the scheme, together with opinions and
recommendations, will be included in a circular to Rand Leases
linked unitholders, which will, subject to the approval of the
JSE and the SRP, be dispatched to Rand Leases minority linked
unitholders in due course.
5.2 Salient dates in relation to the scheme will be published
prior to the issuing of the abovementioned documentation.
Johannesburg
17 October 2003
Corporate and independent advisers to Rand Leases
NEWFOUND
Sponsor to Rand Leases
PSG CAPITAL
Sponsor to JCI
SASFIN
Corporate Finance
A division of Sasfin Bank Bank Limited
Corporate law advisers
TABACKS
Date: 16/10/2003 04:41:05 PM Produced by the JSE SENS Department
