| Fri 23 Apr 2004, 14:47 | | ANNOUNCEMENT TO NAIL SHAREHOLDERS |
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NEW AFRICA INVESTMENTS LIMITED - ANNOUNCEMENT TO NAIL SHAREHOLDERS
NEW AFRICA INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
Share code: NAI and NAN
ISIN: ZAE000033338 and ZAE0000033346
("NAIL")
ANNOUNCEMENT TO NAIL SHAREHOLDERS
1. INTRODUCTION AND RATIONALE
As previously announced, the board of directors of NAIL has commenced with the
process of disposing of NAIL"s underlying assets. Investec Bank Limited is
authorised to announce that in terms of such disposal process, NAIL has entered
into arrangements relating to the disposal of:
- 100% of the issued share capital of New Africa Media Holdings (Proprietary)
Limited ("NAMH"), including all claims which NAIL may have against NAMH at the
effective date as defined in paragraph 2.3 below ("the effective date"), subject
to the fulfilment of the conditions precedent set out in paragraph 2.4 below, to
Primedia Broadcasting (Proprietary) Limited ("Primedia Broadcasting"), a wholly
owned subsidiary of Primedia Limited ("Primedia") ("the NAMH disposal"). Details
of the NAMH disposal are set out in paragraph 2 below;
- 93.3% of the share capital in and shareholders claims against New Africa Books
(Proprietary) Limited for an amount of R9 million; and
- 50% of the share capital in Urban Brew (Proprietary) Limited for an amount of
R16.0 million after payment of a dividend to NAIL of R5.5 million.
2. THE NAMH DISPOSAL
2.1 Details of the NAMH disposal
NAIL will, subject to the fulfilment of the conditions precedent set out in
paragraph 2.4 below, dispose of 100% of the issued share capital of NAMH,
including all claims which NAIL may have against NAMH at the effective date, to
Primedia Broadcasting.
Prior to the NAMH disposal, NAIL has undertaken to dispose of/transfer all of
the assets out of NAMH ("the NAMH restructure") such that its only remaining
asset will comprise:
- 66.5% of the entire issued share capital of KFM (Proprietary) Limited ("KFM"),
including all claims held by NAIL against KFM at the effective date and any
other financial interests held by NAIL in KFM at the effective date; and
- all the preference shares held by NAIL in the issued share capital of Main
Street 69 (Proprietary) Limited ("SPV"), including all claims held by NAIL
against SPV and any other financial interests held by NAIL in SPV at the
effective date. SPV owns 28.5% of KFM and is owned by Broadcape Investments
(Proprietary) Limited,
collectively "the KFM asset".
2.2 Nature of business of NAMH
The KFM asset will be the sole asset of NAMH after the NAMH restructure. KFM is
the number one adult contemporary music radio station in the Western Cape with
over one million listeners based on the past seven days listenership figures.
2.3 Disposal consideration
The total amount payable to NAIL by Primedia Broadcasting in terms of the NAMH
disposal is essentially:
2.3.1 R208.8 million plus an amount equal to Nedbank Limited"s publicly quoted
prime interest rate ("the prime rate") multiplied by R208.8 million, compounded
monthly in arrears from 1 July 2004 to the effective date; minus
2.3.2 any distributions and/or dividends, from 3 October 2003 to the effective
date, declared and or paid to NAIL attributable to the KFM asset plus an amount
equal to the prime rate multiplied by the amount of such distributions and/or
dividends, compounded monthly in arrears from the date on which the
distributions and/or dividends are made to the effective date,
("the disposal consideration"). The disposal consideration will be adjusted
having regard to any over or under provision for taxation.
The implementation date of the NAMH disposal will be the fifth business day
after the later of the date of fulfilment of the last of the conditions
precedent referred to in paragraph 2.4 below and the date on which all the
assets other than the KFM asset have been transferred out of NAMH in terms of
the NAMH restructure ("the implementation date"). The effective date of the NAMH
disposal is the day immediately preceding the implementation date.
The disposal consideration has been underpinned by Primedia in the event that
Primedia does not implement the NAMH disposal. In this event, the shortfall
arising therefrom will be for Primedia"s account.
2.4 Conditions precedent
The NAMH disposal is subject to the fulfilment of the following conditions
precedent:
2.4.1 insofar as may be necessary, the Independent Communications Authority of
South Africa giving its approval for the NAMH disposal, either unconditionally
or subject to such conditions as NAIL and Primedia agree in writing are
acceptable to them;
2.4.2 insofar as may be necessary, the approval of the Competition Commission
and/or the Competition Tribunal, as the case may be, for the NAMH disposal,
either unconditionally or subject to such conditions as NAIL and Primedia agree
in writing are acceptable to them;
2.4.3 insofar as may be necessary, the obtaining of any other regulatory
approvals (other than those described in paragraphs 2.4.1 and 2.4.2 above),
required to implement the NAMH disposal;
2.4.4 insofar as may be necessary in terms of the Listings Requirements of the
JSE Securities Exchange South Africa, the shareholders of NAIL and Primedia
approving the implementation of the NAMH disposal; and
2.4.5 the successful completion of a due diligence investigation on NAMH within
20 business days from 22 April 2004.
2.5 Financial effects
The table below sets out the financial effects of the NAMH disposal based on the
published provisional results of NAIL for the year ended 31 December 2003:
Per NAIL share Notes Before After Chang
e
(cents) (cent (%)
s)
Earnings 1 86.9 135.2 55.6
Headline earnings 1 151.9 168.0 10.6
Net asset value 2 1 284.1 1 3.7
331.9
Net tangible asset 2 1 156.3 1 9.5
value 266.4
Notes:
1. The "Before" column reflects the earnings and headline earnings per NAIL
share for the year ended 31 December 2003 calculated on the basis of a weighted
average number of 122.8 million shares in issue throughout the period. The
"After" column assumes that the NAMH disposal was implemented on 1 January 2003
and reflects the after tax earnings which would have been earned had an amount
equivalent to the disposal consideration been invested by NAIL at an after tax
interest rate of 8.9% per annum for the year ended 31 December 2003 in lieu of
the consolidated after tax earnings of the KFM asset for the year ended 31
December 2003.
2. The "Before" column reflects the net asset value and net tangible asset value
per NAIL share at 31 December 2003 calculated on the basis of 126.8 million
shares in issue at 31 December 2003. The "After" column assumes that the NAMH
disposal was implemented on 31 December 2003 and reflects the disposal
consideration in lieu of the KFM asset at 31 December 2003.
The above financial effects do not take into account the following transactions
concluded by NAIL subsequent to 31 December 2003:
- the distribution by NAIL to its shareholders of:
- R6.86 per NAIL share which distribution included the proceeds relating to the
disposal by NAIL of its entire shareholding in MTN Group Limited and Johnnic
Holdings Limited; and
- all the Metropolitan Holdings Limited shares held by NAIL equating to
approximately R2.15 per NAIL share; and
- the disposal by NAIL, subject to the fulfilment of certain conditions
precedent, of NAIL"s:
- effective 37.2% interest in Jacaranda FM (Proprietary) Limited for R124.3
million;
- effective 31.7% interest in Radmark (Proprietary) Limited for R14.3 million ;
- 90.5% interest in New Africa Publications (Proprietary) Limited;
- 93.3% interest in New Africa Books (Proprietary) Limited for R9.0 million; and
- 50.0% interest in Urban Brew (Proprietary) Limited for R16.0 million after
payment of a dividend to NAIL of R5.5 million.
3. CIRCULAR TO NAIL SHAREHOLDERS
A circular, setting out the full details of the NAMH disposal and convening a
general meeting of NAIL shareholders to consider and, if deemed fit, pass the
resolution necessary to implement the NAMH disposal, will be posted to NAIL
shareholders in due course.
Bryanston
23 April 2004
Investment Sponsor Corporate law
bank Investec Bank advisers and
Investec Bank Limited consultants
Limited Edward Nathan &
Corporate Friedland (Pty)
Finance Limited
Date: 23/04/2004 02:38:59 PM Produced by the JSE SENS Department
