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MCCARTHY LIMITED - DISPOSAL OF MCCARTHY"S MOTOR OPERATIONS IN THE UNITED KINGDOM
AND FURTHER CAUTIONARY ANNOUNCEMENT
McCarthy Limited
(Incorporated in the Republic of South Africa)
(Registration number 1991/003245/06)
("McCarthy" or "the company")
Ordinary shares: JSE code: MCC ISIN: ZAE000034823
Preference shares: JSE code: MCCP ISIN: ZAE000034831
Disposal of McCarthy"s motor operations in the United Kingdom and further
cautionary announcement
1. Introduction
Rand Merchant Bank is authorised to announce that McCarthy has disposed of its
66,67% shareholding in McCarthy Holdings Limited ("McCarthy Holdings"), with
effect from 1 October 2003 ("the transaction"). The transaction was concluded
on 31 October 2003.
McCarthy Holdings is a company registered in Jersey and is the holding company
of McCarthy Motor Holdings UK Limited, which owns four motor dealerships in the
UK.
The purchaser is a major company registered in Japan.
2. Rationale for the transaction
McCarthy does not have any other interests in the UK apart from the four motor
dealerships held through McCarthy Holdings. As a result, the company does not
have the critical mass to be a significant participant in the UK motor retail
market.
In addition, the McCarthy Board wants management to focus solely on the core
activities in South Africa.
These two factors have led to the decision to dispose of the company"s interest
in McCarthy Holdings.
3. Terms of the transaction
3.1 Consideration
The consideration for McCarthy Holdings of GBP 9.9 million has been settled in
cash. Using an exchange rate of R11,8 : GBP1 and, after deducting transaction
costs, the consideration will be approximately R74,6 million.
3.2 Application of the proceeds
The proceeds from the transaction will be remitted back into South Africa, where
they will be used to strengthen the company"s net debt position.
3.3 Nature of the assets forming part of the transaction
The operation being sold consists of a property holding company registered in
Jersey, which also owns the trading operations in the United Kingdom. The
trading operation consists of four motor dealerships selling the Toyota and
Lexus brands.
4. Financial effects of the transaction
The financial effects of the transaction are based on the following assumptions:
* the "Before the transaction" positions are based on the company"s audited
results for the twelve months ended 30 June 2003 and on the balance sheet as at
that date;
* the "After the transaction" position in respect of both diluted and undiluted
earnings per share assumes that the transaction was effective from 1 July 2002
and that the proceeds were set off against interest bearing debt, bearing
interest at a rate of 14,5% per annum; and
* the "After the transaction" position in respect of NAV assumes that the
transaction was effected on 30 June 2003.
Before the After the
transaction transaction Increase
(cents) (cents) (%)
Earnings per McCarthy
ordinary share for the year
ended 30 June 2003
Undiluted 9.8 10.3 5.1
Undiluted headline 8.2 8.4 2.4
Diluted 6.7 7.1 6.0
Diluted headline 5.7 5.8 1.8
NAV per McCarthy ordinary
share as at 30 June 2003
Undiluted 32.4 32.7 0.1
Diluted 23.1 23.3 0.1
5. Further cautionary announcement
Shareholders are referred to the cautionary announcement dated 22 October 2003
and are advised that the process referred to therein is continuing. Accordingly,
shareholders are advised to continue to exercise caution until a further
cautionary announcement is made.
Durban
3 November 2003
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
Date: 03/11/2003 09:27:03 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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