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Cadiz Holdings Limited - Dealing In Securities Of Cadiz Holdings Limited
CADIZ HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/007258/06)
Share code: CDZ ISIN: ZAE000017661
("Cadiz" or "the Company")
ACQUISITION BY WORLDWIDE CAPITAL OF 10% OF THE ISSUED SHARE CAPITAL OF CADIZ AND
DIRECTORS" DEALINGS IN SECURITIES - SALE OF SHARES
1. INTRODUCTION
On 23 March 2004 Cadiz announced a transaction whereby a consortium led and
controlled by Makana Investment Corporation (Proprietary) Limited acquired some
23.5m shares in Cadiz (the "Makana Transaction"). In addition to the Makana
Transaction, Cadiz is pleased to announce that an agreement has been reached in
terms of which Worldwide Capital Limited ("WWC"), a subsidiary of Worldwide
African Investments Holdings (Proprietary) Limited ("WAIH"), has acquired 21.5
million Cadiz shares with effect from 1 April 2004 for a total consideration of
R 55.175m ("the Transaction"). 12m of the shares have been sold for cash
amounting to R30m at 250 cents per Cadiz share. The balance, amounting to 9.5m
shares, has been sold for cash amounting to R25.175m equal to 265 cents per
Cadiz share and will be settled on 14 December 2004.
The Transaction has resulted in WWC acquiring a strategic investment of
approximately 10% in Cadiz. Together with the Makana Transaction, the shares
held by black employees and the indirect Black Economic Empowerment ("BEE")
shareholding held via Investec, approximately 27% of the shares in Cadiz are
currently held by BEE stakeholders. The Transaction will not cause any dilution
to the earnings of Cadiz as the equity is not a new issue but has been sourced
from existing shareholders.
2. RATIONALE FOR THE TRANSACTION
Cadiz operates within the financial sector in South Africa and is committed to
the principles of BEE. In line with the BEE requirements of the recently
formulated Financial Sector Charter ("the Charter") and taking into
consideration legislation governing BEE in South Africa, Cadiz has identified a
critical need and business imperative to introduce empowerment partners as
equity stakeholders in the Company.
WWC is a public company, a subsidiary of WAIH and a Black Company as defined in
the Charter. WWC"s focus is in the areas of financial market trading,
structured finance and products, asset finance solutions and financial services.
WWC wished to acquire a strategic stake as a long-term investment in Cadiz. The
board and management of Cadiz believe that to issue a further 10% over and above
the equity issued to the Makana consortium would result in excessive dilution of
the earnings of the group. In order to fulfill the Transaction therefore, WWC
needed to source the equity from existing shareholders. Since the Cadiz shares
are tightly held by the vendors, primarily management and Investec Bank Limited,
WWC was unable to acquire the shares in the market. The vendors therefore
assisted WWC in procuring the shares as the parties acknowledged that the
transaction was undertaken in order to contribute to the Company"s BEE strategy.
This transaction has accordingly been undertaken between the parties in
accordance with the spirit and purport of the Charter.
Due to the fact that there are no vesting restrictions on the sale of the Cadiz
shares by WWC, the Transaction was struck at the ruling market price for the
shares. This is in contrast to the Makana Transaction which was struck at a
significant discount to market to compensate for the fact that the Makana
consortium is restricted on trading the equity for up to 7 years.
It is envisaged that the Transaction will continue to transform Cadiz into an
entity that has the profile and capacity to successfully deliver quality
services to all segments of the South African business community, including
corporate, government, institutional and state owned enterprises clients,
thereby facilitating growth in earnings and shareholder value on an ongoing
basis. The Transaction further demonstrates not only Cadiz"s continuing
commitment to growing its business in South Africa, but also its commitment to
meaningful transformation at all levels of the business.
3. BACKGROUND TO WAIH AND WWC
WWC was incorporated in 1999 and is a subsidiary of WAIH, a prominent black
owned and managed investment holding company. WWC"s core competencies are
situated in the areas of financial market trading, structured finance and
structured products, asset finance solutions and financial services. WWC
employs its skill base and the above competencies to acquire shares in both
listed and unlisted companies that offer value and fall within its investment
criteria.
The executives of WWC have significant skills and experience on the management
of the liability-side of the balance sheet. In addition to being employed within
the WAIH Group, WWC structured product solutions have also been implemented by
major South African financial institutions and pension funds.
4. UNDERTAKINGS BY WWC
WWC has undertaken to use all reasonable endeavours to:
proactively market and promote Cadiz to their members, business and other
contacts; and
jointly and singularly procure business opportunities for Cadiz; and
approach and solicit business from its contacts for the business of Cadiz.
WWC and Cadiz will sign co-operation agreements to give effect to these
undertakings.
5. DEALINGS IN SECURITIES - SALE OF SHARES
Cadiz advises that, in accordance with rules 3.63 to 3.74 of the Listings
Requirements of the JSE Securities Exchange South Africa, it has been informed
of the following sale of Cadiz shares relating to the Transaction:
Directors : Raymond Cadiz and Frank Cadiz
Company : Cadiz Holdings Limited and Cadiz Financial
Strategists (Proprietary) Limited
Office held : Chief Executive Officer of Cadiz Holdings
Limited and director of major subsidiary
of Cadiz Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 15 000 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R 38,494,186
Security class : Ordinary shares
Nature and extent of
directors" interest : Indirect beneficial - discretionary
beneficiaries of trusts
Clearance : The required clearance per rule 3.66 has
been obtained
Director : Ram Barkai
Company : Cadiz Asset Management (Proprietary)
Limited
Office held : Director of major subsidiary of Cadiz
Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 1 000 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R2 566 279
Security class : Ordinary shares
Nature and extent of
director"s interest : Direct Beneficial
Clearance : The required clearance per rule 3.66 has
been obtained
Director : Frank Cadiz
Company : Cadiz Financial Strategists (Proprietary)
Limited
Office held : Director of major subsidiary of Cadiz
Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 288 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R739 088
Security class : Ordinary shares
Nature and extent of
director"s interest : Direct Beneficial
Clearance : The required clearance per rule 3.66 has
been obtained
Director : Kevin Morley
Company : Cadiz Financial Strategists (Proprietary)
Limited
Office held : Director of major subsidiary of Cadiz
Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 250 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R641 570
Security class : Ordinary shares
Nature and extent of
director"s interest : Direct Beneficial
Clearance : The required clearance per rule 3.66 has
been obtained
Director : Dan Ahern
Company : Cadiz Financial Strategists (Proprietary)
Limited
Office held : Director of major subsidiary of Cadiz
Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 250 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R641 570
Security class : Ordinary shares
Nature and extent of
director"s interest : Direct Beneficial
Clearance : The required clearance per rule 3.66 has
been obtained
Director : Roberto Gonsalves
Company : Cadiz Special Projects Limited
Office held : Director of major subsidiary of Cadiz
Holdings Limited
Nature of transaction : Sale of shares
Number of shares : 50 000
Selling price : 250cps in respect of 55.8% of the shares
sold for cash and 265cps in respect of
44.2% of the shares to be settled on 14
December 2004
Date of transaction : 16 April 2004
Total value of Transaction : R128 314
Security class : Ordinary shares
Nature and extent of
director"s interest : Shares held by an Associate as defined
in the Listing Requirements
Clearance : The required clearance per rule 3.66 has
been obtained
6. INVESTEC BANK LIMITED
In addition to the equity sourced for the Transaction as detailed above,
Investec Bank Limited have agreed to assist with facilitation of the Transaction
by disposing of 4 142 000 shares to WWC for a total purchase consideration of
R10,629,528.
7. CONCLUSION
The Transaction, in aggregate with the Makana Transaction, will result in the
shareholding by black parties in Cadiz approximating 27% with immediate effect.
This shows the commitment of Cadiz to black economic empowerment. The commitment
by WWC in securing external funding for the purchase of the equity at ruling
market prices at the time discussions were initiated is evidence of their
commitment and belief in the prospects of the Cadiz group.
Newlands
19 April 2004
Sponsor Attorneys Adviser
Investec Corporate Finance Cliffe Dekker Cadiz Corporate Solutions
