| Mon 3 May 2004, 17:49 | | MGX Holdings Limited - Results Of The General Meet |
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MGX Holdings Limited - Results Of The General Meeting, Lifting Of The Suspensin
Of The MGX Share, Proposed Delisting And Cautionary Announcement
MGX Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1983/012697/06)
Share code: MGX ISIN: ZAE000009262
(MGX or the Company)
RESULTS OF THE GENERAL MEETING, LIFTING OF THE SUSPENSION OF THE MGX SHARE,
PROPOSED DELISTING AND CAUTIONARY ANNOUNCEMENT
1. RESULTS OF THE GENERAL MEETING
Shareholders of MGX are advised that at the general meeting held on Thursday,
29 April 2004 relating to:
* the disposal of:
- MGXs interest in Dion Business Systems (Proprietary) Limited (the DB
Systems disposal);
- MGXs interest in Didata Limited (the Didata (UK) disposal); and
- MGXs interest in MGX Property Faerie Glen (Proprietary) Limited (the
Faerie Glen settlement transaction); and
* the acquisition of 5 million shares in EC-Hold Limited (the acquisition of
EC-Hold shares),
(collectively, the combined transactions) the requisite majority of MGX
shareholders voted in favour of each of the ordinary resolutions pertaining to
the combined transactions.
All the conditions precedent relating to the Didata (UK) disposal, the Faerie
Glen settlement transaction and the acquisition of EC-Hold shares have been
fulfilled. Most of the conditions precedent relating to the DB Systems disposal
have been fulfilled and the outstanding conditions precedent are expected to be
fulfilled by Friday, 7 May 2004.
As a result of the combined transactions, MGXs interest-bearing liabilities
and overdraft will reduce by approximately R119 million.
2. LIFTING OF THE SUSPENSION OF THE LISTING OF the MGX SHARE
On 20 October 2003, MGX announced that the listing of the MGX share on the
JSE Securities Exchange South Africa (JSE) was to be suspended pending
finalisation of negotiations with the Companys capital providers.
To date, the common terms agreement with MGXs capital providers has been
signed and approved by shareholders together with various disposals. In
addition, the interim financial results for the six months ended 31 December
2003 have been published with a going concern statement and an updated working
capital statement has been issued by the Company in the circular to shareholders
dated 31 March 2004, where the board of directors (the board) stated that, in
its opinion, the working capital available to the Company and the MGX group will
be adequate for the Companys and the MGX groups requirements for a period of
at least six months from 30 March 2004.
The JSE has been requested and has agreed to lift the suspension of the MGX
share with effect from the commencement of trading on Tuesday, 4 May 2004.
3. PROPOSED DELISTING
Shareholders are further advised that the board has resolved that the listing
of the MGX share on the JSE should be terminated (the proposed delisting).
The board has reviewed the rationale for the listing of the Company and has
concluded that no benefits are being derived from the Company remaining listed
on the JSE. Moreover, the costs of complying with the JSEs regulations in the
financial year ended 30 June 2003 exceeded the market capitalisation of the
Company at the date of the suspension of trading in the MGX share and such costs
have effectively been borne by MGXs capital providers, which has resulted in an
inequitable situation whereby the Companys creditors are subsidising the
Companys shareholders. Consequently, the board has resolved to pursue the
delisting.
It is envisaged that shareholders who do not wish to hold shares in an unlisted
public company will be provided with an opportunity to sell all or part of the
MGX shares held by them in exchange for an offer consideration of
0,1 cent per MGX share. Currently, MGX is in discussions with the JSE, the
Securities Regulation Panel and its advisers as to decide upon the most
appropriate mechanism in terms of which to effect the proposed delisting. The
details of the mechanism in terms of which shareholders will be afforded with an
opportunity to sell all or part of the MGX shares held by them will be set out
in a detailed terms announcement and in a circular to shareholders once the
regulatory requirements surrounding the proposed delisting have been resolved.
In terms of the Listings Requirements of the JSE, should a company wish to
terminate its listing on the JSE, the board is required to obtain advice from an
independent expert as to whether the terms and conditions of the offer to
shareholders are fair and reasonable. Deloitte & Touche Corporate Finance has
been appointed by the board to act as an independent expert to the board to
advise it on whether the terms and conditions of any such offer are fair and
reasonable to the shareholders of MGX. The substance of such advice will be
included in the above mentioned circular to MGX shareholders.
4. CAUTIONARY
Shareholders are advised to exercise caution in dealing in MGX shares
subsequent to the resumption of trading in the MGX share until a detailed terms
announcement relating to the proposed delisting is published.
Sandton
3 May 2004
Investment bank and sponsor
Standard Bank
Auditors
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Independent experts
Deloitte & Touche
Corporate Finance Division
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Joint attorneys to MGX
WEBBER WENTZEL BOWENS
And
Charl du Plessis Attorneys
Attorneys, Notary Publics & Conveyancers
Attorneys to MGX on the acquisition of EC-Hold shares
Knowles Husain Lindsay Inc Attorneys
(Registration number 2000/000004/21)
Auditors to Didata Limited
Grant Thornton
Chartered Accountants (SA)
Accountants, Auditors & Business Advisers
