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Hosken Consolidated Investments Limited - Disposal Of International Payment
Systems (Proprietary) Limited (`IPS`)
Hosken Consolidated Investments Limited
(Registration number 1973/07111/06)
(Incorporated in the Republic of South Africa)
Share Code: HCI ISIN : ZAE000003257
(`HCI`)
DISPOSAL OF INTERNATIONAL PAYMENT SYSTEMS (PROPRIETARY) LIMITED (`IPS`)
1. Introduction
HCI shareholders are advised that HCI, The Bevin Trust, John Anthony Snoek and
The Cradean Trust (`the sellers`), have concluded a sale agreement with The
Bidvest Group Limited (or its nominee) for the sale of 100% of the entire issued
share capital of, and the sellers` sale claims against IPS (`the disposal`) for
a total amount of R55.2 million (`the consideration`). HCI currently holds 50%
of IPS while The Bevin Trust, John Anthony Snoek and The Cradean Trust hold
38,67%, 3,33% and 8% of IPS, respectively.
The disposal is effective from 1 April 2004. Usual warranties for a transaction
of this nature were furnished by the sellers (`the warranties`).
2. Nature of business of IPS
IPS is an investment holding company, holding interests in International Payment
Systems Property (Proprietary) Limited, Ingenico S.A. (Proprietary) Limited
(`Ingenico`) and Global Payment Technologies Cash Systems (Proprietary) Limited
(`GPT`). Ingenico and GPT are involved in the `integrated payment solutions
business`.
3. Rationale for the disposal
The HCI Board considers the IPS transaction as opportune and HCI`s share of the
consideration will be used to fund future investment opportunities.
4. The consideration
The consideration was settled on 19 July 2004 and HCI`s share of the
consideration amounted to R28.4 million.
An amount of R2 million of the consideration was paid into an attorneys` trust
account to be held until 30 September 2004 to cover any claims that may arise
under the warranties.
5. Conditions precedent
All conditions precedent regarding the disposal have been fulfilled.
6. Financial effects
Based on the published consolidated reviewed results of HCI for the year ended
31 March 2004, the pro forma financial effects of the disposal on HCI`s
earnings, headline earnings and net asset value (`NAV`) per share are set out
below. The pro forma financial information has been prepared for illustrative
purposes only and because of its nature may not give a true picture of HCI`s
financial position and results of operations.
Per HCI Before the After the Percentage
ordinary disposal (1) disposal (2) Change
share
Earnings 131.26 146.72 (3) 11.78%
(cents)
Headline 2.96 0.95 (3) -67.90%
earnings
(cents)
NAV (cents) 645 662 (4) 2.64%
Notes:
1. Based on the published consolidated reviewed results of HCI for the year
ended 31 March 2004.
2. Based on the assumption that the disposal was effected on 1 April 2003 for
income statement purposes and on 31 March 2004 for balance sheet purposes and
assuming that HCI receives the disposal consideration of R28.4 million.
3. Taking into account the after tax profit on the sale of IPS of R 17.6
million, assuming no Capital Gains Tax is payable. A further adjustment was made
to take into account the after tax interest received on the disposal
consideration at average call rates applicable during the period 1 April 2003 to
31 March 2004, assuming a corporate tax rate of 30%.
4. Taking into account the profit on the sale of IPS of R 17.6 million,
assuming no Capital Gains Tax is payable.
5. The effect of the disposal on net tangible asset value has not been
included as the effect thereon is not materially different to the effect on NAV.
7. Categorisation of the disposal
The disposal has been categorised as a Category 3 transaction in terms of
section 9.5(a) of the JSE Securities Exchange South Africa Listings
Requirements.
Durban
20 July 2004
Sponsor
Nedbank Capital
Corporate advisors to HCI
HJS Advisory Services (Proprietary) Limited
Date: 20/07/2004 05:53:15 PM Produced by the JSE SENS Department
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