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Cycad - Company Announcement and Further Cautionary Announcement.
CYCAD FINANCIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/008637/06)
JSE Share code: CYD ISIN: ZAE000017729)
("Cycad" or "the company" or "the Cycad group")
Settlement of legal dispute with MGX Holdings Limited ("MGX") and disposal of
Cycad"s shareholding in EC-Hold Limited ("EC-Hold") to MGX ("the settlement")
and Further Cautionary Announcement
1. Introduction
Solcor Capital Limited is authorized to announce that, subject to the
ratification of the settlement agreement by shareholders in general meeting and
the fulfilment of, inter alia, the suspensive condition set out in paragraph 4
hereof, the Cycad group has resolved its dispute with MGX by the disposal of its
investment in EC-Hold (comprising 5 million ordinary shares) to MGX for a cash
consideration of R 7 million together with an additional amount of R 500 000 as
a contribution towards the legal costs incurred by Cycad regarding the dispute.
2. Rationale for the settlement
The settlement agreement brings to an end the long-standing dispute between
Cycad and MGX in relation to EC-Hold and is in line with the stated intention of
Cycad"s directors to dispose of it"s assets and ultimately wind down the
company. It realises immediate value for Cycad shareholders regarding its
shareholding in EC-Hold, and the disposal proceeds will be utilised by Cycad to
retire and/or to repay debt.
3. Terms of the settlement
The terms of the settlement are, inter alia, that;
* the disposal, cession and delivery of the shares held by Cycad in ECHold to
MGX on payment of the purchase consideration and fulfilment of all suspensive
conditions will constitute a full and final settlement of the dispute between
Cycad and MGX; and a waiver of claims vesting in Cycad in it"s capacity as a
shareholder of EC-Hold against, inter alia, EC-Hold, Ronald Sydney Price and
each of the trustees of the Mandy Rebecca Price Trust in their personal
capacities;
* all claims and counterclaims are formally withdrawn;
* payment of the consideration of R 7 million together with the additional
amount of R 500 000, equalling R 7,5 million be made; and
* the settlement agreement will be ratified in a general meeting of
shareholders.
4. Suspensive condition
The settlement is subject, inter alia, to MGX"s Consortium of bankers agreeing
to the provision of sufficient funding to MGX to implement the MGX
restructuring.
5. Pro-forma Financial effects
The table below sets out the pro-forma financial effects of the transaction,
based on the published audited results of the Cycad group for the year ended 30
June 2003.
Before After % Change
(cents) 1 (cents)
Headline loss per (14) (11) 2 21 %
share
Loss per share (14) (11) 2 21 %
Net asset value 3,6 6 3 67 %
per share
Notes:
1. Extracted from the published audited results of Cycad for the year ended 30
June 2003.
2. The loss figures in the after column assume the transaction was effected on
1 July 2002 when calculating the effect on the loss and headline loss per share.
3. The net asset value figure in the after column assumes the transaction was
effected on 30 June 2003.
4. The reporting accountants report on the pro-forma financial effects are
detailed in the circular to be posted to shareholders on or about 26 November
2003.
6. Irrevocable undertakings
Irrevocable undertakings have been received from shareholders holding in excess
of 50.1% of the ordinary shares in issue, to vote in favour of the resolutions
to be proposed at the general meeting.
7. Circular to shareholders
A circular to shareholders, setting out full details of the transaction and
convening a general meeting of shareholders to ratify the transaction, will be
sent to shareholders on or about 26 November 2003.
8. Further cautionary
Until such time as the suspensive conditions have been fulfilled, shareholders
are advised to continue to exercise caution when dealing in the company"s
securities.
Johannesburg
17 November 2003
Corporate Adviser to Cycad
Solcor Capital Limited (Pty) Ltd
(Registration number 2003/011551/07)
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
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