| Thu 13 Nov 2003, 8:30 | | GRINDROD LIMITED - SPECIFIC REPURCHASE OF ORDINARY |
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GRINDROD LIMITED - SPECIFIC REPURCHASE OF ORDINARY SHARES; RESTRUCTURE OF SHARE
CAPITAL; AND FURTHER CAUTIONARY ANNOUNCEMENT
GRINDROD LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1966/0009846/06)
JSE Code: GND
ISIN Code: ZAE000030805
JSE Code: GNN
ISIN Code: ZAE000030813
ANNOUNCEMENT RELATING TO: SPECIFIC REPURCHASE OF ORDINARY SHARES; RESTRUCTURE OF
SHARE CAPITAL; AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement that appeared in the press on 4
November 2003, shareholders are advised that:
1.1 Pursuant to the acquisition of a significant shareholding of Grindrod
Limited ("Grindrod or the Company") ordinary shares by Nedbank Limited
as warehousing agent ("Nedbank"), the Company has entered into a
repurchase agreement with Nedbank to acquire 8 958 956 ordinary shares
("repurchase shares") in the Company (representing approximately 25%
of the current issued ordinary share capital and approximately 9% of
the total issued share capital of the Company), at a price of 1140
cents per ordinary share, plus acquisition and holding costs ("the
repurchase price").
1.2 The directors have recommended that the share capital of the Company
be simplified by consolidating the two classes of shares into one
class of share.
2. THE SPECIFIC REPURCHASE
2.1 Terms Of The Repurchase
In terms of the specific repurchase, the Company will, subject to the
fulfilment of the conditions precedent detailed in 2.3 below,
repurchase the repurchase shares from Nedbank at the repurchase price
on or about 9 January 2004.
2.2 Rationale
The Company is a South African shipping company and is committed to
accommodating and facilitating the introduction of black empowerment
into the Grindrod group. The repurchase provides a basis for issuing
shares to empowerment parties without unnecessarily diluting earnings.
The intention is to issue new shares to appropriate empowerment
parties to facilitate a meaningful stake in the Company.
2.3 Conditions Precedent
The specific repurchase is conditional upon, inter alia, the following
conditions precedent:
* The requisite approvals being received from the JSE Securities
Exchange South Africa ("the JSE");
* The approval of the specific repurchase by the Company
shareholders in general meeting, excluding the shares held by
Nedbank; and
* Registration of the special resolutions by the Registrar of
Companies.
2.4 Funding For The Specific Repurchase
The specific repurchase will be funded by a combination of available
cash resources and financing from the Company"s bankers, if required
at the time.
2.5 Treatment Of Repurchase Shares
The Company will, pursuant to the specific repurchase cancel and
delist the repurchase shares on or about 12 January 2004.
2.6 Related Party And Voting
In terms of the Listings Requirements of the JSE, the specific
repurchase is classified as a related party transaction and
accordingly Nedbank and its associates will not be allowed to vote at
the general meeting referred to in 4 below.
2.7 Financial Effects
The table below sets out the effects of the share repurchase on the
earnings per share ("EPS"), headline earnings per share ("HEPS") and
net tangible asset value per share ("NTAV"), and net asset value per
share ("NAV") of the Company based on the unaudited interim results
for the six months ended 30 June 2003, being the most recent reporting
period. The EPS, HEPS, NTAV and NAV, have been calculated by
assuming:
* that the share repurchase was concluded on 1 January 2003;
* that the funds utilised to repurchase the shares were sourced
from borrowings on which interest of 13% is payable; and
* by applying the same accounting policies used in the Company"s
latest audited annual financial statements.
Results for Before(cents) After(cents) Percentage
the six Increase /
months (Decrease)
ended 30
June 2003
EPS 97,8 100,0 2,3%
HEPS 100,3 102,8 2,5%
NTAV 530,2 457,6 (13,7%)
NAV 550,9 480,5 (12,8%)
Number of 95 360 86 401
shares in
issue
(`000)
Weighted
average 95 100 86 141
number of
shares in
issue
(`000)
2.8 Irrevocable Commitments
The Company has received irrevocable commitments from shareholders
holding approximately 77% of the ordinary shares that can be voted at
the general meeting to be convened in terms of paragraph 4 hereunder,
that they will vote in favour of the requisite special resolution to
give effect to the specific repurchase.
3. RESTRUCTURE OF SHARE CAPITAL
The Company currently has two classes of shares in issue, namely ordinary
and "N" ordinary shares, with differential voting rights. The directors
are of the opinion that the share capital structure should be simplified by
consolidating the two classes of shares into one class of share. This has
the benefit of not only a simplified capital structure but also providing
liquidity in the market.
4. DOCUMENTATION AND GENERAL MEETING
A general meeting of shareholders will be held on or about 8 January 2004
to approve the following:
* The repurchase of the repurchase shares as envisaged in 2 above;
* Consolidation of ordinary and "N" ordinary shares into one class of
share.
A circular containing full details of the specific repurchase, the
restructuring of the share capital and convening a general meeting of
shareholders to pass the requisite resolutions will be sent to shareholders
in due course.
5. FURTHER CAUTIONARY ANNOUNCEMENT
Furthermore, shareholders are advised that the Company is continuing with
negotiations, which may affect the price of the securities of the Company,
and should therefore continue to exercise caution when dealing in the
Company"s securities.
Durban
12 November 2003
Merchant bank:
Marriott Merchant Bank Limited
Sponsor:
Exchange Sponsors (Pty) Ltd
Auditor and reporting accountant:
Morrison Murray
Legal advisors:
