| Fri 12 Dec 2003, 14:12 | | JOINT ANNOUNCEMENT RELATING TO A STRATEGIC INVESTM |
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GRINTEK - JOINT ANNOUNCEMENT RELATING TO A STRATEGIC INVESTMENT BY SAAB IN
GRINTEK
GRINTEK
(Incorporated in the Republic of South Africa)
(Registration number 1955/000013/06)
Share code: GNK ISIN: ZAE000003067
("Grintek" or "the Company")
SAAB Technologies
(Incorporated in Sweden)
(Registration number 556036-0793)
("Saab")
JOINT ANNOUNCEMENT RELATING TO A STRATEGIC INVESTMENT BY SAAB IN GRINTEK
1. INTRODUCTION
Further to the Company"s announcement on the Securities Exchange
News Service on 18 November 2003, and in the Press on 19 November 2003,
Grintek shareholders are advised that Saab has entered into agreements
in terms of which it will acquire a strategic investment in Grintek of
not less than 21,2% of the entire issued share capital of Grintek, being
62 341 444 Grintek shares, including 22 813 005 Grintek shares which are
currently held as treasury shares by a wholly-owned subsidiary, Grintek
Group Limited. The disposal by Grintek Group Limited of the treasury
shares to Saab for a cash purchase consideration of R36,5 million,
equivalent to 160 cents per share, is as if such disposal were a
specific issue of shares for cash in terms of the JSE Securities
Exchange South Africa ("JSE") Listings Requirements. Saab will acquire a
further quantity of not less than 39 528 439 Grintek shares from third
parties ("Acquisitions")
The specific issue and the acquisitions are collectively referred to
hereinafter as "the strategic investment".
2. RATIONALE
Saab is one of the world"s leading high-technology companies, with
its main operations focusing on defence, aviation and space. Saab
currently has a 49% shareholding in Grintron (Proprietary) Limited, a
Grintek subsidiary housing part of Grintek"s defence electronics
businesses. The strategic investment by Saab will enhance the existing
relationship between Grintek and Saab, by exploiting other areas of the
businesses common to both, such as telecommunications and industrial
electronics. Saab"s entry as a significant active shareholder sets the
stage for further expansion by Grintek into world markets where Grintek
has proved that it has a range of competitive high technology products
for civilian and defence use.
The specific issue will also provide a cash injection into Grintek
of R36,5 million thereby increasing Grintek"s cash resources and
strengthening the balance sheet.
3. THE SPECIFIC ISSUE OF SHARES
Grintek Group Limited has entered into an agreement with Saab in
terms whereof it will dispose of the treasury shares to Saab at an issue
price of 160 cents per Grintek share. In terms of the JSE Listings
Requirements, the transaction involving the disposal of treasury shares
must be approached as if it were a specific issue of shares for cash.
The treasury shares represent approximately 7,75% of the Company"s
current issued share capital. The issue price of 160 cents per Grintek
share represents a premium of approximately 30% to the weighted average
traded share price of Grintek shares on the JSE measured over the
30 days prior to 2 December 2003, the last practicable date. In this
regard, Investec Bank Limited advises that it has considered the terms
and conditions of the specific issue and is of the opinion that the
specific issue is fair and reasonable to the Grintek Limited
shareholders.
The directors of Grintek are of the opinion that the terms of the
specific issue are fair and reasonable to the shareholders of Grintek.
3.1 Rationale for the specific issue
The purpose of the specific issue is primarily to enhance the
shareholder profile and international exposure of the Company through
the investment by an international strategic and active partner, and to
provide a cash injection into Grintek of R36,5 million, thereby
increasing the Company"s cash resources and strengthening the Company"s
balance sheet.
3.2 Financial effects of the specific issue
The table below sets out the illustrative financial effects of
the specific issue based on audited historical financial information for
the year ended 30 June 2003 assuming that the specific issue had been
concluded for income statement purposes on 1 July 2002 and for balance
sheet purposes on 30 June 2003:
Before the After the
specific issue specific issue Change
Note 1 Notes 2 and 3 %
Basic earnings per share (cents) 3,15 3,90 23,7
Headline earnings per share (cents) 7,05 7,49 6,3
Net asset value per share (cents) 133,23 135,30 1,6
Net tangible asset value
per share (cents) 130,45 132,74 1,8
Number of shares in issue at
30 June 2003 ("000) 271 582 294 395 8,4
Weighted average number of
shares in issue ("000) 271 582 294 395 8,4
Notes:
1. The "Before" financial information has been extracted, without
adjustment, from the audited financial results of Grintek for the year
ended 30 June 2003 and excludes the Grintek treasury shares.
2. The basic and headline earnings per share calculations have been
based on the assumption that the specific issue was implemented on
1 July 2002.
3. The net asset value and net tangible asset value per share
calculations have been based on the assumption that the proposed
transaction was implemented on 30 June 2003.
4. In terms of the basic and headline earnings calculations, it has
been assumed that the proceeds of the specific issue amounted to
approximately R36,5 million and were invested in an interest bearing
account at an after-tax rate of 8% for the year ended 30 June 2003.
4. CONDITIONS PRECEDENT
The specific issue is subject to the passing of the requisite
resolutions by shareholders in general meeting, approving the specific
issue in accordance with the requirements of the JSE by not later than
31 January 2004.
5. GENERAL MEETING
A circular to shareholders setting out details of the specific
issue of shares for cash, a notice of general meeting and form of proxy,
will be posted to shareholders on 15 December 2003.
Centurion
12 December 2003
Independent expert and sponsor to Grintek
Investec Bank Limited
(Registration number 1969/004763/06)
Corporate law advisors and consultants
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Date: 12/12/2003 02:10:23 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
