| Tue 22 Jun 2004, 8:23 | | Midrand Property Disposal And Cautionary Announcem |
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Mgx Holdings Limited - The Midrand Property Disposal And Cautionary Announcement
Release Date: 22/06/2004 08:00:20 Code(s): MGX
MGX HOLDINGS LIMITED - THE MIDRAND PROPERTY DISPOSAL AND CAUTIONARY ANNOUNCEMENT
MGX Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1983/012697/06)
JSE Share code: MGX
ISIN: ZAE000009262
(`MGX` or the `Company`)
THE MIDRAND PROPERTY DISPOSAL
1. INTRODUCTION
Shareholders are advised that MGX Property (Proprietary) Limited (`MGX
Property`), a wholly-owned subsidiary of MGX, has entered into an agreement
with C-Max Investments 151 (Proprietary) Limited (`C-Max`), a wholly-owned
subsidiary of Zenprop Property Holdings (Proprietary) Limited, to sell to C
Max, MGX Property`s immovable property situated at 126, 14th Street,
Midrand, held under title deed number T78545/99 (`the Midrand property`)
for a purchase consideration of R35 million (`the Midrand property
disposal`).
2. RATIONALE FOR THE MIDRAND PROPERTY DISPOSAL
As has been announced previously by the Company, MGX is in the process of
implementing a recovery plan to return the MGX Group to profitability.
Pursuant to MGX`s recovery plan, MGX Property has entered into the Midrand
property disposal. The funds received in terms of the Midrand property
disposal will be used to reduce MGX`s interest-bearing liabilities and
obligations.
3. IMPORTANT TERMS AND CONDITIONS
3.1 Effective Date
The effective date of the Midrand property disposal will be the date
of registration of transfer of ownership of the Midrand property in
the relevant deeds registry, into the name of C-Max. It is expected
that the effective date of the disposal will be 31 August 2004 (`the
effective date`).
3.2 Purchase Consideration
The purchase consideration paid by C-Max to MGX Property for the
Midrand property is R35 million, which will be paid on the effective
date.
3.3 Occupational Rent
In the event that C-Max takes occupation before the registration of
transfer of the Midrand property into the name of C-Max, C-Max will
pay to MGX Property occupational rent in an amount of R364 000 per
month, payable monthly in advance.
3.4 Voetstoots And Warranties
Other than limited warranties provided by MGX Property to C-Max, the
Midrand property disposal is voetstoots.
3.5 Conditions Precedent
All the conditions precedent relating to the Midrand property disposal
have been fulfilled, and MGX has obtained dispensation from the JSE
Securities Exchange South Africa (`JSE`) to implement the transaction
on the basis that the requisite majority of shareholders have
irrevocably undertaken to vote in favour of the resolution necessary
to ratify the Midrand property disposal as set out in paragraph 4
below.
4. IRREVOCABLE UNDERTAKINGS
MGX has obtained irrevocable undertakings to vote in favour of the
resolution necessary to ratify the Midrand property disposal from the
requisite majority of independent shareholders of MGX.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the Midrand
property disposal on the net liability value (`NLV`) and tangible NLV
(`TNLV`) per MGX share, headline loss per share (`HLPS`) and loss per share
(`LPS`), based on MGX`s interim results for the six months ended 31
December 2003. The pro forma financial effects have been prepared for
illustrative purposes only to provide information of how the Midrand
property disposal may have impacted on the results and financial position
of MGX. Because of their nature, the pro forma financial effects may not
give a fair reflection of MGX`s financial position after the Midrand
property disposal or the effect on future earnings.
Before After
the Midrand property the Midrand property
disposal disposal Change
(cents) (cents) (%)
LPS 97.4(1) 89.8(3) 7.80
HLPS 73.3(1) 69.0(3) 5.87
NLV per MGX share 456.6(2) 456.7(4) (0.02)
TNLV per MGX share 464.2(2) 464.3(4) (0.02)
Notes:
1. The HLPS and LPS, Before the Midrand property disposal, have been
extracted from MGX`s interim results for the six months to 31 December
2003 and calculated based on a weighted average of 66.598 million MGX
shares in issue, assuming that the Midrand property disposal had not
yet been implemented.
2. The HLPS and LPS, After the Midrand property disposal, have been
calculated based on a weighted average of 66.598 million MGX shares in
issue, assuming that Midrand property disposal had been implemented on
30 June 2003 and the cash portion of the purchase consideration that
MGX will receive was calculated at an average after-tax rate of 14.4%
for the six months to 31 December 2003. The interest has been assumed
to have no tax effect, as MGX was not in a tax paying position for the
proposed period.
3. The NLV and TNLV per MGX share, Before the Midrand property disposal,
have been extracted from MGX`s interim results for the six months to
31 December 2003 and calculated based on 66.598 million MGX shares in
issue, assuming that the Midrand property disposal had not yet been
implemented.
4. The NLV and TNLV per MGX share, After the Midrand property disposal,
have been calculated based on 66.598 million MGX shares in issue,
assuming that the Midrand property disposal had been implemented on 31
December 2003.
6. IMPORTANT DATES AND TIMES
2004
Posting of circular, on Monday, 19 July
Last day to lodge the form of proxy for the general
meeting, by 09:00, on Friday, 30 July
General meeting at 09:00 at the registered office of MGX,
22 Milkyway Avenue, Linbro Business Park, Linbro Park,
Sandton, on Tuesday, 3 August
Results of the general meeting released on SENS, on Tuesday, 3 August
Results of the general meeting published in the press, on Wednesday, 4 August
Note:
These dates and times are subject to amendment. Any such amendment will be
published on SENS and in the press.
7. CAUTIONARY ANNOUNCEMENT
MGX shareholders are referred to the cautionary announcement dated 3 May
2004 relating to the proposed delisting of MGX from the JSE (`the
delisting`) and are advised to continue exercising caution when dealing in
their MGX shares until such time as a further announcement relating to the
delisting is published.
22 June 2004
Sandton
Investment bank and sponsor
Standard Bank
Reporting accountants and auditors
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Joint attorneys
WEBBER WENTZEL BOWENS
And
Charl du Plessis Attorneys
Attorneys, Notary Publics & Conveyancers
