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Mouldmed - Restructuring; Agreement with Black Economic Empowerment Party;
Issue of shares for cash; Change of name and Appointment of new
directors
MOULDED MEDICAL SUPPLIES LIMITED
(Registration number 1995/003771/06)
(`Mouldmed`)
JSE Code: MUM & ISIN Code: ZAE000013751
RESTRUCTURING; AGREEMENT WITH BLACK ECONOMIC EMPOWERMENT (`BEE`) PARTY; ISSUE OF
SHARES FOR CASH; CHANGE OF NAME AND APPOINTMENT OF NEW DIRECTORS
1. INTRODUCTION
Since its listing in the Venture Capital sector of the JSE Securities Exchange
SA (`JSE`) in 1997 Mouldmed was involved in medical services, the development,
manufacturing and distribution of specialized medical equipment. The long period
of development and the high costs involved led the board of directors to
consider a further issue of shares for cash and to negotiate for a BEE-partner
(`the transactions`). This necessitates a restructuring of the company and an
increase in capital. For this purpose Mouldmed is proposing a special meeting of
members.
2. PURPOSE OF SPECIAL MEETING
At the special meeting special resolutions will be proposed to attain, inter
alia, the following:
2.1 That the 100 000 000 authorised ordinary shares of no par value of
Mouldmed be converted to 100 000 000 authorised ordinary shares with a
par value of (one) 1 cent each with each issued share issued at a
premium of 12.71 cents per share.
2.2 That the stated capital of Mouldmed be converted to authorised capital
of R13 710 000, including paid-up capital of R1 000 000 and a share
premium of R12 710 000.
2.3 That the authorised capital of Mouldmed be increased from R1 000 000
to R10 000 000 divided into 1 000 000 000 (one thousand million)
shares of one (1) cent each.
2.4 That the board of directors of Mouldmed be granted special authority
to issue an initial 15 000 000 shares to a BEE group at not less than
10 cents per share ie at a premium of nine (9) cents per share (`the
BEE issue`).
2.5 That the board of directors of Mouldmed further be granted special
authority to increase the total number of Mouldmed shares issued to
such (and / or a similar) BEE group to 26 % of the total issued share
capital of Mouldmed at a price related to the average price of
Mouldmed on the JSE for a certain period (but at not less than 10
cents per share).
2.6 That the board of directors be granted special authority to issue
35 000 000 of the unissued shares for cash at not less than 10 cents
per share to members of the public as defined in the rules and
regulations of the JSE (`the specific issue`).
2.7 That the name of the company be changed to MOULDMED LIMITED.
2.8 That Dr Jacob Kekane and Advocate Modise G Khoza be appointed as
irectors following the BEE issue.
3. BEE ISSUE
On the expectation that these resolutions will be passed, Mouldmed has signed an
agreement with Nubian Management Consulting CC (Reg no CK 2002/038948/23)
(`Nubian`), a BEE group which provides management services to small and medium
enterprises, specializing in the utilization of the call centre as a delivery
channel, and in diversity management.
In terms of this agreement Nubian will subscribe to 15 000 000 new Mouldmed
shares of no par value at 10 cents per share, thereby acquiring a 10 % interest
in Mouldmed.
The relevant shares will be issued to or on behalf of Nubian against the
consideration which shall be paid before or on 31 August 2004.
The subscription is subject to:
3.1 proof of funds by Nubian;
3.2 a proper due diligence by Nubian before or on 15 July 2004; and
3.3 the listing of the relevant shares on the JSE.
The shares acquired by Nubian shall be subject to the specific restriction that,
should it wish to sell any of the shares, it shall first offer it to other
approved BEE investors on the same terms and conditions on which a third party
is prepared to acquire such shares.
4. RIGHT TO SUBSCRIBE TO ADDITIONAL SHARES
Should Mouldmed is at any time acquire additional assets which could have an
effect on the percentage shareholding the existing BEE shareholder(s) shall be
entitled to subscribe to as many Mouldmed shares as would be necessary to
increase its / their total shareholding in Mouldmed to 26 %.
The subscription price will be the average price at which the shares have been
issued for such acquisition.
5. SPECIFIC ISSUE
The company will place 35 000 000 shares at not less than 10 cents per share
with independent members of the public (as defined in the rules and regulations
of the JSE) before or on 31 July 2004. No related party (including any director,
employee, or associate of the company or any subsidiary) will acquire any shares
from the placement. No specific investors can be named at present but Mouldmed
is negotiating with a number of businesses in the medical product industry to
take up most of the shares. Further particulars will be provided at the proposed
general meeting (if available).
The 35 000 000 shares to be issued for cash will provide Mouldmed with the
capital strongly to:
5.1 expand the distribution of its own and of acquired product ranges;
5.2 increase the turnover of its profitable locums subsidiary;
5.3 provide a solid base for its rest and recreation retreats venture
(medical and general tourism);
5.4 acquire larger office space s well as space to accommodate its first
hundred international medical exhibitors; and
5.5 the specific issue will additionally reduce current debt levels.
6. RATIONALE FOR THE TRANSACTIONS
The scope of Mouldmed as a financial and medical services provider will be
greatly enhanced by the quality of the services and connections of Nubian.
As has been confirmed a number of times in the financial statements of the
group, the lack of working capital has always been the main constraint to
Mouldmed becoming a viable health industry enterprise. After unsuccessful
attempts to raise additional funds from members or bankers, Mouldmed is
presently in a position to place the shares with investors and businessmen in
the health industry who wish to assist in the growth of the group.
7. CHANGE OF CONTROL
At present the trustees of the Oxford Property Trust is the effective
controlling shareholder of Mouldmed, holding 40 %. This will be diluted to 27 %
by the envisaged share issues. Thereafter only Nubian (with 10 %) will be
significant shareholder. There is no voting or other arrangement between Nubian
and the above trustees.
The issue of additional shares (to the BEE group and to members of the public as
defined in terms of the rules and regulations of the JSE) will in no way affect
the control of Mouldmed.
8. SUSPENSIVE CONDITIONS IN RESPECT OF THE TRANSACTIONS
The transactions are subject to approval by the JSE.
9. FINANCIAL EFFECTS OF THE TRANSACTIONS
The financial effects are summarised below, and are based on the assumption
that the various transactions have been effective from 1 March 2003.
Before the After the % change
transactions(1) transactions(2)
Net asset value per 10.80 10.53 (2.5)
share (cents)
Net tangible asset 4.7 6.47 37.66
value per share (cents)
Earnings per share 1.2 1.2 Nil
(cents)
Headline earnings per (0.5) (0.5) Nil
share (cents)
Number of shares in 100 000 150 000 -
issue (`000)
Principal assumptions:
1. The position `before the issue` is based on the un-audited results of
Mouldmed for the twelve months ended 29 February 2004.
2. The position `after the issue` is after the issue of 15 000 000 BEE
shares at 10 cents per share in cash and 35 000 000 shares to the
public at 10 cents per share.
3 The asset value excludes the present market value of Mouldmed`s
interest in Health for Life UK Plc (see paragraph 11 below).
10 DIRECTORS
Nubian will appoint the following directors as its representatives on the board
of Mouldmed after receipt of their investment.
10.1 Dr Jacob Kekane
Dr Kekane has a BA degree from the University of the North, an HDPM
from Wits Business School, an MA from Michigan State University and a
DPhil from the University of Oxford.
As a businessman he is also an executive of Cell C and a director of
African Bank.
10.2 Adv Modise Geoffrey Khoza (with mr Sello Kekana as his alternate)
He has a BProc-degree (from the University of the North), an LLB-
degree (Wits) and an LLM-degree (Harvard).
Mr Modise is an advocate of the High Court of South Africa and a
member of the Johannesburg bar.
The reconstituted board of Mouldmed will therefore be:
Dr Sarie Brits (Chairman);
Gerrit A Theron;
Prof Ryno G Kriel;
Henry YA Kruger;
Dr Jacob Kekane; and
Adv MG Khoza (alt S Kekane).
11. GENERAL
With the receipt of the funds from the issue for cash, Mouldmed is no longer
considering a possible sale of its 8 000 000 shares in Health for Life UK Plc.
Shares in the latter company have lately been placed at 12 pence per share. This
value the investment at R11 000 000 (or 11 cents per present Mouldmed share).
12. CIRCULAR
A detailed circular will be issued to members as soon as possible.
Cape Town
14 June 2004
Sponsor
Exchange Sponsors (Pty) Limited
Date: 14/06/2004 09:36:24 AM
Produced by the JSE SENS Department
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