| Wed 28 Jul 2004, 8:51 | | Aquila - Specific Repurchase, Advance Payment |
|
Aquila - Specific Repurchase, Advance Payment and Proposed Voluntary Liquidation
AQUILA GROWTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/003158/06)
Share code: AQL ISIN: ZAE000013959
(`Aquila` or `the company`)
SPECIFIC SHARE REPURCHASE, ADVANCE PAYMENT AND PROPOSED VOLUNTARY LIQUIDATION
1. INTRODUCTION
Shareholders are referred to Aquila`s announcement of its audited results
for the year ended 29 February 2004, dated 31 May 2004, in which
shareholders were notified that the directors had re-evaluated the
company`s strategy in light of the disposal of the company`s 11,72%
interest in Peermont Global Limited (`Peermont Global`), formerly Global
Resorts SA (Pty) Limited, and the negative impact on shareholder returns in
the future following the introduction of Capital Gains Tax (`CGT`) and
Secondary Tax on Companies (`STC`) leviable on the distribution of capital
profits. The directors resolved, subject to shareholder approval, to wind-
up the company (`the voluntary liquidation`). Following advice from its
professional advisors, appointed specifically with respect to the proposed
winding-up, the board of directors have resolved to proceed with the
orderly winding-up of the company`s affairs in anticipation of the
voluntary liquidation of the company.
2. THE SPECIFIC REPURCHASE
Subject to approval by the company`s shareholders the directors have
resolved to proceed with the specific repurchase of 14 310 494 Aquila
shares at a price of 125 cents per share from Eagle Aquila Investments
(Pty) Limited (`Eagle Aquila`), a wholly-owned subsidiary of Aquila (`the
specific repurchase`).
These shares were acquired by Eagle Aquila, in terms of section 89 of the
Companies Act, as part of Aquila`s general share repurchase programme and
have been held by Eagle Aquila as treasury stock. The reason for the
specific repurchase is that, as a result of the directors` decision to
proceed with the orderly winding-up of the company, the treasury shares
held by Eagle Aquila will no longer be required by Aquila for future
transactions. It is therefore the directors` intention, subject to
receiving shareholder approval, to repurchase the treasury shares prior to
proceeding with the advance payment and voluntary liquidation detailed
below. It is proposed to repurchase the treasury shares on or about
Tuesday, 24 August 2004 and to cancel and delist the treasury shares on
Thursday, 26 August 2004.
3. THE ADVANCE PAYMENT
In pursuit of the board`s resolution to proceed with the orderly winding-up
of the company, the board has recommended an initial distribution in
anticipation of the company`s voluntary liquidation (`the advance
payment`).
In terms of the agreement entered into by Aquila, to dispose of an 11,72%
interest in Peermont Global (`the Peermont Global disposal`), the company
gave an irrevocable undertaking to perform all acts reasonably required to
facilitate the listing of Peermont Global on the JSE Securities Exchange
South Africa (`the JSE`). In this regard, Aquila proposes to distribute its
remaining 11,71% interest in Peermont Global, being 38 653 400 Peermont
Global shares (equivalent to 30,95 Peermont Global shares per 100 Aquila
shares), as a dividend in specie, in anticipation of the voluntary
liquidation, out of pre-1 October 2001 capital reserves. In addition, cash
in the amount of R137,4 million, will be distributed to shareholders as
follows:
* R28,7 million (equivalent to 23 cents per share) by way of an advance
liquidation dividend out of pre-1 October 2001 capital reserves in
anticipation of the voluntary liquidation of Aquila; and
* R108,7 million (equivalent to 87 cents per share) by way of:
- a payment out of share premium of R83,7 million (equivalent to 67
cents per share) in terms of section 90 of the Companies Act; and
- an advance liquidation dividend of R25 million (equivalent to 20
cents per share) out of revenue reserves in anticipation of the
voluntary liquidation of Aquila.
4. FINANCIAL EFFECTS
Set out in the table below are the pro forma financial effects of the
specific repurchase and the advance payment based on Aquila`s audited
financial results for the year ended 29 February 2004. The pro forma
financial effects have been prepared for illustrative purposes only to
provide information on how the specific repurchase and the advance payment
may have impacted on the results and financial position of Aquila. Because
of their nature, the pro forma financial effects may not give a fair
reflection of Aquila`s financial position after the specific repurchase and
the advance payment or the effect on future earnings.
After the
After the specific
Peermont repurchase
Global and advance Percentage
Before2 disposal payment change
(cents) (cents) (cents) (%)
Earnings per share 1,19 37,00(3) 71,49(4) 93,2
Headline earnings/(loss)
per share 14,59 0,77(3) (13,13)(4) -
Net asset value per share 191,72 228,94(5) 54,51(6) (76,2)
Net tangible asset value
per share 184,72 221,95(5) 47,52(6) (78,6)
Weighted average number
of shares in issue (`000) 125 870 125 870 125 870
Number of shares in issue
(`000) 124 904 124 904 124 904
Notes:
1. The financial effects on earnings and net asset value have been prepared as
if the Peermont Global disposal, the specific repurchase and the advance
payment had occurred on 1 March 2003 and 29 February 2004, respectively,
and excludes the effect of the cash and shares in the hands of the
shareholders after the advance payment.
2. Extracted from the audited annual financial statements of Aquila for the
year ended 29 February 2004.
3. The Peermont Global disposal adjustment has been prepared based on the
following assumptions:
* 50% of the investment in Peermont Global was sold on 1 March 2003 for
R124 million;
* Half of the investment carrying value at 1 March 2003 of R64,6
million, which excludes loans repaid by Peermont Global during the
year, forms the cost of the investment sold;
* Transaction costs of R1 million are assumed to have been incurred; and
* Interest is received on the proceeds from the disposal, at a rate of
11,4%, for the year.
4. The specific repurchase and advance payment adjustment has been prepared
based on the following assumptions:
* CGT arises on the specific repurchase of the 14 310 494 Aquila shares
from Eagle Aquila, based on an assumed share price of 290 cents per
share at the date of the specific repurchase;
* The remaining 11,71% interest in Peermont Global, after the Peermont
Global disposal, is adjusted to its fair value in accordance with AC
133. It is the company`s policy to only reflect fair value adjustments
in the income statement as and when the investment is realised. The
fair value is assumed to be R125,8 million, which is equivalent to the
actual disposal consideration from the Peermont Global disposal,
escalated by 9% per annum (in terms of the Peermont Global disposal
agreement) for the period from 1 January 2004 to 29 February 2004;
* After the disposal of the first 50% of the Peermont Global investment,
the carrying cost, when equity accounting ceases, becomes the deemed
cost of acquisition;
* Transaction costs of R1,5 million are assumed to have been incurred;
and
* Interest foregone on the cash distribution of R137,4 million assumed
at an average rate of 11,4% per annum.
5. The Peermont Global disposal adjustment has been prepared based on the
following assumptions:
* 50% of the investment in Peermont Global was sold on 29 February 2004
for R125,8 million, which is the purchase consideration of R124
million at 1 January 2004, escalated at 9% per annum (in terms of the
Peermont Global disposal agreement) for the period to 29 February
2004;
* Half of the investment carrying value at 29 February 2004 of R78,3
million forms the cost of the investment sold; and
* Transaction costs of R1 million are accrued.
6. The specific repurchase and advance payment adjustment has been prepared
based on the following assumptions:
* The specific repurchase of 14 310 494 Aquila shares, held by Eagle
Aquila as treasury shares, at their original cost of 125 cents per
share. A CGT liability of R644 000 is assumed to arise based on a
share price of 290 cents per share at the date of the specific
repurchase;
* The remaining 11,71% interest in Peermont Global, after the Peermont
Global disposal, is adjusted to its fair value in accordance with AC
133. The fair value is assumed to be R125,8 million, which is
equivalent to the actual disposal consideration from the Peermont
Global disposal, escalated by 9% per annum (in terms of the Peermont
Global disposal agreement) for the period from 1 January 2004 to 29
February 2004;
* The remaining investment in Peermont Global shares is distributed to
Aquila shareholders;
* A cash distribution of R137,4 million, of which R83,7 million
represents a payment out of share premium, with the balance being an
advance liquidation dividend out of pre-1 October 2001 capital and
revenue reserves; and
* Accrual of transaction costs of R1,5 million.
5. AQUILA POST THE ADVANCE PAYMENT
It is the directors` intention to proceed with the timeous winding-up of
the company. Following the proposed advance payment, the company will have
a cash balance of approximately R53 million and its remaining investments
in Just Fun Holdings (Pty) Limited, Just Time (Pty) Limited, Aquitec
Technology Holdings (Pty) Limited and Gerber Global Limited. The directors
are in the process of finalising agreements for the sale of these remaining
investments and expect the agreements to be signed on or before 30
September 2004. Subsequent to the disposal of these remaining investments,
and immediately prior to the company entering the formal voluntary
liquidation process, a further distribution in cash will be made to
shareholders. Shareholders will be timeously informed of further
developments in the winding-up process.
6. SALIENT DATES AND TIMES
2004
Circular and notice of general meeting posted to
shareholders on Wednesday, 28 July
Last day for receipt of forms of proxy for the general meeting
by no later than 10:00 on Tuesday, 17 August
General meeting of shareholders to be held at 10:00 on Thursday, 19 August
Results of the general meeting of shareholders published on
SENS on Thursday, 19 August
Results of the general meeting of shareholders published in the
press on Friday, 20 August
Treasury shares cancelled and delisted on Thursday, 26 August
Last day to trade in order to settle by the record
date and to qualify to participate in the advance
payment on Friday, 27 August
Aquila shares trade ex-advance payment on Monday, 30 August
Record date to be eligible to participate in the advance
payment on Friday, 3 September
Electronic transfer of funds or cheques and Peermont
Global share certificates posted to shareholders
who have not dematerialised their shares on Monday, 6 September
Dematerialised shareholders` accounts held at their CSDP
or broker credited and Peermont Global share
certificates issued on Monday, 6 September
Notes:
1. The above dates and times are subject to amendment and any amendment made
will be published on SENS and in the press.
2. Share certificates may not be dematerialised or rematerialised between
Monday, 30 August 2004 and Friday, 3 September 2004, both days inclusive.
3. Shareholders are advised that Peermont Global is currently not listed and
they will therefore not be able to trade in the Peermont Global shares on
the JSE. Peermont Global will however make an application to list on the
JSE, with a targeted listing date of Thursday, 9 September 2004, subsequent
to which shareholders will be able to trade in their Peermont Global shares
on the JSE. These share certificates will be required to be dematerialised
prior to trading and it could take between one and ten days to be
dematerialised, depending on the volumes being processed.
7. CIRCULAR TO SHAREHOLDERS AND GENERAL MEETING
A circular, containing details of the specific repurchase, the advance
payment, the voluntary liquidation and to which a notice of general meeting
is attached, will be distributed to shareholders today. The general meeting
will be held at First Floor, Process House, Epsom Downs Office Park, 13
Sloane Street, Bryanston at 10:00 on Thursday, 19 August 2004.
Johannesburg
28 July 2004
Corporate advisor and sponsor
BRIDGE CAPITAL
Reporting accountants and auditors
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Legal advisor
PETER DAWE AND ASSOCIATES
Tax advisor
DELOITTE
Audit. Tax. Consulting. Financial Advisory
Date: 28/07/2004 08:00:07 AM Produced by the JSE SENS Department
