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Winecorp Limited - The Disposal Of All Assets And Liabilities
Release Date: 20/05/2004 08:19:11 Code(s): WNE
WINECORP LIMITED - THE DISPOSAL OF ALL ASSETS AND LIABILITIES
DELISTING AND VOLUNTARY WINDING UP
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
WINECORP.LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/012032/06)
JSE Code: WNE ISIN: ZAE000027710
(`Winecorp` or `the company`)
* THE DISPOSAL OF ALL ASSETS AND LIABILITIES
* DELISTING AND VOLUNTARY WINDING UP
* WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that Winecorp has entered into agreements to
repurchase and cancel the treasury shares held by Winecorp Private Label
Services (Proprietary) Limited, a wholly owned subsidiary of Winecorp
through which its main operations are conducted (`Winecorp PLS`) (`the
repurchase and cancellation`) and, subject to certain conditions precedent,
to dispose of the remainder of its assets and liabilities for R25,803
million to Winecorp Holdings (Proprietary) Limited (`Winecorp Holdings`)
and its wholly owned subsidiary Winecorp SA (Proprietary) Limited
(`Winecorp SA`), in terms of section 228 of the Companies Act, Act 61 of
1973, as amended (`the Act`) (`the disposal`).
Winecorp is controlled by Hollard Holdings (Proprietary) Limited
(`Hollard`), which, prior to the repurchase and cancellation of the
treasury shares, holds and/or controls approximately 73.53% of the issued
share capital of Winecorp and which,, after the repurchase and cancellation
will hold and/or control 77.41% of the issued share capital of Winecorp.
Hollard also indirectly, via Spier Holdings (Proprietary) Limited and
Winecorp Holdings, owns 100% of the issued share capital of Winecorp SA.
The disposal constitutes an affected transaction in terms of the Securities
Regulation Panel (`SRP`) Code on Take-overs and Mergers (`the Code`) and a
category 1 and related party transaction in terms of the JSE Securities
Exchange South Africa (`JSE`) Listings Requirements and accordingly
Winecorp shareholders are required to approve the transaction. The
repurchase and cancellation is governed by Section 85 of the Act and the
JSE Listings Requirements, which requires that it be approved by
shareholders.
The directors of Winecorp propose that the estimated net proceeds of the
disposal, in an amount of R24 303 000 be distributed to shareholders by
means of a capital reduction, that the listing of Winecorp shares on the
JSE be terminated and that the company be voluntarily wound up.
2. RATIONALE
As a result mainly of the strengthening of the South African Rand against
the currencies of its main overseas trading partners, the businesses of
Winecorp SA and Winecorp are performing poorly and are likely to require
ongoing funding support from their major shareholders. A merger of the
operations and assets of Winecorp and Winecorp SA will offer the merged
entity certain operational advantages, which will include an entry into the
branded market for the Winecorp business and product expansion.
Having regard to these circumstances and considerations the board of
directors of Winecorp are of the opinion that it is no longer appropriate
for Winecorp to remain listed on the JSE and that the operations and assets
of Winecorp should be disposed of at fair value to and merged with Winecorp
SA and that the net proceeds of the disposal should be distributed to
shareholders.
The disposal presents shareholders with an opportunity to exit their
investment in Winecorp at an attractive premium of over 97% to the weighted
average price at which the shares of the company have traded on the JSE
prior to the cautionary announcement relating to the disposal.
3. THE REPURCHASE AND CANCELLATION
3.1 Introduction
Winecorp PLS currently holds 2 600 000 Winecorp shares as treasury shares
as a result of a specific repurchase which was effected during January
2001. The directors have resolved that, in order to facilitate the
disposal and the proposed voluntary winding-up of the company, these
treasury shares be repurchased and cancelled in terms of section 85 of the
Act and the JSE Listings Requirements, prior to the disposal of all of the
assets and liabilities of Winecorp.
3.2 Terms and financial effects of the repurchase
In terms of the repurchase Winecorp will, subject to the fulfilment of the
conditions precedent set out in 3.4 below, repurchase the treasury shares,
comprising approximately 5% of the issued share capital of the company at a
price of 32 cents per share. The repurchase and cancellation will have no
financial effect on Winecorp.
3.3 Payment of the purchase price
The purchase price of R832 000 will be set-off against the existing loan
account between Winecorp and Winecorp PLS.
3.4 Conditions precedent
The repurchase is conditional upon approval thereof by shareholders in
general meeting (`the general meeting`), by way of a special resolution and
registration of such resolution by the Registrar of Companies.
3.5 Cancellation of repurchased shares
The repurchased shares will be cancelled as issued shares and restored to
the status of authorised shares with effect from the date of registration
of the special resolution, which is expected to be Monday, 7 July 2004.
4. PARTICULARS OF THE DISPOSAL
4.1 Terms of the disposal
4.1.1 Subject matter, disposal consideration and payment
Winecorp shall, subject to the fulfilment of the conditions precedent set
out in 4.1.3 below, dispose of all its assets and liabilities to Winecorp
SA and Winecorp Holdings for a net aggregate amount of R25 803 000.
The disposal will result in Winecorp Holdings being indebted to Winecorp,
on loan account, in the amount of R25 803 000. These claims on loan
account against Winecorp Holdings, less a provision for transaction and
winding-up costs, will be distributed to shareholders, whereafter they will
be settled in cash as set out in 5 below.
4.1.2 Effective date
The effective date of the disposal is the later of 1 July 2004 and the day
following the date upon which the repurchase and cancellation is effected.
4.1.3 Suspensive Conditions
The disposal is subject to and conditional upon the following conditions
precedent:
4.1.3.1 approval of the disposal by the JSE, the SRP and the South African
Reserve Bank;
4.1.3.2 approval of the disposal by Winecorp shareholders at the general
meeting as required by section 228 of the Act;
4.1.3.3 that any necessary approvals of any other regulatory authorities are
obtained; and
4.1.3.4 receipt by Winecorp of written notification from Winecorp Holdings
that it is satisfied that the Industrial Development Corporation of
South Africa, to which certain Winecorp shares owned by Hollard have
been ceded and pledged in terms of a financing agreement with Winecorp
SA, has been adequately consulted in relation to the disposal.
4.1.4 Warranties
The disposal agreement contains no warranties other than that the assets
concerned are owned and can be sold by Winecorp and Winecorp PLS.
4.1.5 Related parties
Winecorp Holdings and Winecorp SA are related parties to Winecorp.
Consequently the disposal constitutes a related party transaction in terms
of the Listings Requirements of the JSE and requires written confirmation
from an independent professional expert acceptable to the JSE as to whether
the terms and conditions of the disposal are fair and reasonable to the
Winecorp minority shareholders. The disposal further constitutes an
affected transaction in terms of the Code and requires an independent
opinion thereon by an appropriate external advisor in terms of Rule 3.1 of
the Code.
Sasfin has been appointed as the independent professional expert and has
concluded that the terms and conditions of the disposal and the resultant
distribution are fair and reasonable to Winecorp minority shareholders.
The full text of the opinion will be included in the circular referred to
in 7 below.
4.1.6 Opinions and recommendations
A committee of independent directors of the company have considered the
terms and conditions of the disposal agreement and are of the opinion that
they are beneficial to the company and fair and reasonable to shareholders
and unanimously recommend to the directors that the disposal agreement is
entered into. The directors unanimously recommend that shareholders vote
in favour of the resolutions to implement the disposal at the general
meeting.
All the directors who hold Winecorp shares and are able to vote at the
general meeting intend to vote in favour of the resolutions necessary to
implement the disposal.
4.1.7 Financial effects
The following table and accompanying notes set out the unaudited pro forma
financial effects of the disposal on the company and a Winecorp
shareholder. It has been prepared for illustrative purposes only, to
provide information about how the transaction might have affected the
financial information presented and, because of its nature, may not give a
true reflection of the effect of the transaction on the company and a
Winecorp shareholder.
Before After % Change
(Loss)/Earnings per (0.33)1 1.294
share (cents)
Headline (0.26)1 1.294
(loss)/earnings per
share (cents)1
Net asset value per 52.351 49.315 (6.2)
share (cents)
Net tangible asset 48.05(1) 49.31(5) 2.6
value per share
(cents)
Weighted average share 25.00(2) 49.31(5) 97.2
price (cents)
Weighted number of 49 49 286
shares in issue (`000) 286(3)
Number of shares in 49 49 286
issue (`000) 286(3)
Notes:
1. Based on the unaudited published interim results for the six months to 31
January 2004.
2. Thirty day weighted average trading price of one Winecorp share up to 11
March 2004, the last date prior to publication of the first cautionary
announcement relating to the transaction.
3. After taking into account 2 600 000 shares held in treasury.
4. Assuming the transaction was effected on 1 August 2003 and the company
earned an after-tax interest rate of 5.25% on the net proceeds thereof.
5. Based on the net amount available for distribution to shareholders, being
the proceeds of the disposal of R25 803 000 less estimated transaction and
winding-up costs of R1 500 000.
5. THE DISTRIBUTION, DELISTING AND VOLUNTARY WINDING-UP
The directors of Winecorp have resolved to distribute to shareholders the
net proceeds of the disposal, estimated at R24 303 000 or 49.31 cents per
share and represented by claims against Winecorp Holdings on loan account,
following which the listing of the company`s shares on the JSE will be
terminated and the company voluntarily wound-up. Hollard and PLB Group
Limited (`PLB Group`), a strategic shareholder, which will retain an
interest in the merged entity, have undertaken to retain their
proportionate loan accounts against Winecorp Holdings. All other
shareholders shall effectively receive the distribution in cash by Winecorp
Holdings settling the loan accounts in question simultaneously with the
distribution (`the loan account repayments`). The loan account repayments
will be guaranteed by Winecorp Holdings by means of a guarantee issued by a
financial institution acceptable to the SRP and Winecorp.
The distribution will be effected by way of a reduction of capital out of
share capital and share premium in terms of section 90 of the Companies
Act, subject to shareholder approval.
In order to qualify for the distributions, shareholders must be recorded in
the register of Winecorp on the record date, being Friday, 16 July 2004.
The last day to trade in the ordinary shares of Winecorp to be recorded in
the register on the record date is Friday, 9 July 2004.
Should the voluntary winding-up of the company be approved, the listing of
the ordinary shares on the JSE will be suspended from commencement of trade
on Monday, 12 July 2004 and terminated from commencement of trade on
Tuesday, 20 July 2004. The voluntary winding-up of the company will
commence following the registration of the special resolution approving
same and is expected to take approximately 6 months to complete.
6. SALIENT DATES
Circular and notice of
general meeting posted to Monday, 7 June
shareholders on
Last day for lodging form of Monday, 28 June
proxy by 12h00 on
General meeting of Winecorp
shareholders at 12h00 on Wednesday, 30 June
Announcement of fulfilment or
waiver of conditions
precedent and results of Wednesday, 30 June
general meeting on SENS on
Announcement of fulfilment or
waiver of conditions Thursday, 1 July
precedent and results of
general meeting in press on
Last day to trade in shares
to be recorded in the
register of Winecorp as a Friday, 9 July
shareholder on the record
date
Suspension of listing of
shares on the JSE from Monday, 12 July
commencement of trade
Record date for purposes of Friday, 16 July
distribution
Pay date Monday, 19 July
Termination of listing of
shares on the JSE from Tuesday, 20 July
commencement of trade on
Notes:
1. No dematerialisation or rematerialisation of certificates may take place
after Friday, 9 July 2004.
2. The above dates and times are subject to amendment and are dependent upon
the approval of Winecorp shareholders of the resolutions set out in the
notice of general meeting being obtained and upon the fulfilment of the
conditions precedent. Any amendment to the dates and times will be
announced on SENS and published in the press.
7. SHAREHOLDER APPROVAL AND GENERAL MEETING
A general meeting of shareholders will be held at Winecorp, Watergat Road,
Simondium at 12h00 on Wednesday, 30 June 2004 for the purpose of
considering and, if deemed fit, passing, with or without modification, the
ordinary and special resolutions required to approve and implement the
repurchase and cancellation, the disposal, the distribution, the delisting
and the voluntary winding-up. Hollard and its subsidiaries and PLB Group
will not be able to vote on any resolutions relating to the disposal,
distribution, delisting or voluntary winding-up at the general meeting.
A circular setting out the details of the transactions and containing a
notice of general meeting and proxy form will be posted to Winecorp
shareholders on Monday, 7 June 2004. A further announcement advising
shareholders of the results of the general meeting and the salient dates of
the distribution will be published after the general meeting on or about
Wednesday, 30 June 2004.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the details provided in this announcement, Winecorp
shareholders are no longer required to exercise caution when dealing in
their shares on the JSE.
Cape Town
20 May 2004
Sponsor and Independent Expert
Sasfin Corporate Finance
A division of Sasfin Bank Limited
Attorneys
Hofmeyr Herbstein Gihwala Inc.
Reporting Accountants and auditors
PricewaterhouseCoopers
