| Wed 22 Sep 2004, 9:21 | | Unitrans - Introduction Of Direct Black Equity Own |
|
Unitrans - Introduction Of Direct Black Equity Ownership In Unitrans By Way Of
Release Date: 22/09/2004 07:56:02 Code(s): UTR
UNITRANS - INTRODUCTION OF DIRECT BLACK EQUITY OWNERSHIP IN UNITRANS BY WAY OF
AN ISSUE OF SHARES FOR CASH
Unitrans Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1967/003403/06)
Share code: UTR ISIN: ZAE000007670
(`Unitrans` or `the company`)
INTRODUCTION OF DIRECT BLACK EQUITY OWNERSHIP IN UNITRANS BY WAY OF AN ISSUE OF
SHARES FOR CASH
1. PROPOSED BEE TRANSACTION
1.1 In the announcement dated 6 September 2004 shareholders were advised,
inter alia, that Unitrans intended to pursue the proposed Black
Economic Empowerment (`BEE`) transaction in terms of which a company
(`the BEE Investor`) owned by Mvelaphanda Capital (Proprietary)
Limited, Arch Equity (Proprietary) Limited and an employee trust to be
formed for the benefit of Unitrans employees (`the Trust`), will
subscribe for a 13,02% interest in Unitrans.
1.2 The final approval of the JSE Securities Exchange South Africa (`the
JSE`) for the implementation of the BEE transaction has now been
obtained.
2. BACKGROUND AND RATIONALE
2.1 Unitrans wishes to demonstrate its commitment to BEE which it believes
is essential for the development of its people, its business and the
South African economy.
2.2 Unitrans is pleased to confirm that it has concluded a transaction
with the BEE Investor pursuant to which the BEE Investor will acquire
a 13,02% interest in Unitrans for a cash investment of R290,5 million
(`the transaction`).
2.3 The board of Unitrans believes the transaction is in the best
interests of Unitrans shareholders since:
2.3.1 it goes a substantial way towards ensuring that the Unitrans
group of companies (`the Group`) is correctly positioned to
retain and expand its businesses organically;
2.3.2 the Group`s balance sheet has not been used in any way to
fund the transaction;
2.3.3 in addition to the BEE Investor investing money into
Unitrans, the shareholders of the BEE Investor will be
contributing their expertise to assist Unitrans in growing
its businesses; and
2.3.4 the participation by Unitrans employees in the Trust will
assist in creating an ownership culture, which is expected
to generate operational benefits at all levels of Unitrans`
businesses.
3. THE BEE INVESTOR
3.1 The BEE Investor, being Clidet No. 518 (Proprietary) Limited
(`Clidet`), is the vehicle through which the investment of R290,5
million in Unitrans will be made, by way of Unitrans effecting an
issue of shares for cash to Clidet.
3.2 Clidet has the following shareholder profile:
- Arch Equity (Proprietary) Limited (`Arch Equity`) 34,9%
- Mvelaphanda Capital (Proprietary) Limited
(`Mvelaphanda`) 34,9%
- the Trust, the beneficiaries of which
will be Unitrans employees, excluding executive
management 30,2%
3.3 Arch Equity is a black-controlled company focusing on private equity
investments and other investments in companies to which Arch Equity
can add value, given its BEE credentials.
3.4 Mvelaphanda is wholly-owned by Mvelaphanda Holdings (Proprietary)
Limited, a widely recognized BEE company.
3.5 The Trust is in the process of being established for the benefit of
Unitrans employees. By their participation in the Trust, Unitrans
employees (at least 80% of whom are previously disadvantaged
individuals) will share in future wealth creation, thereby reinforcing
trust and a sense of commitment. Unitrans directors and executive
management who qualified for allocations under the existing Unitrans
Share Scheme during the last two years will be precluded from
benefiting under the Trust.
4. THE TRANSACTION: ISSUE FOR CASH
4.1 Unitrans will issue for cash 11 600 000 Unitrans shares (`the new
shares`) to Clidet at a subscription price of 2 504 cents per share
(`the issue for cash`). The price of 2 504 cents represents a discount
of 10% to the weighted average share price of Unitrans on the JSE of 2
782 cents for the 30 trading days up to and including Friday, 6 August
2004, i.e. the 30 trading days prior to the date that the price of the
issue for cash was determined. The new shares will be issued on
Monday, 4 October 2004, i.e. the date immediately following the record
date for the final dividend of 100 cents per share for the year ended
30 June 2004 (`the final dividend`). Accordingly, the new shares will,
save for the final dividend to which they will not be entitled, rank
pari passu with the other Unitrans ordinary shares in issue. As Clidet
will not be entitled to the final dividend, the subscription price of
2 504 cents per share represents a discount of only 6,6% to the
effective ex-dividend price of Unitrans of 2 682 cents on a
comparative weighted average basis.
4.2 The aggregate cash consideration to be invested by Clidet is R290,5
million.
4.3 The new shares constitute 14,97% of Unitrans` issued share capital
prior to the issue for cash and will constitute 13,02% of Unitrans`
enlarged share capital after implementation of the issue for cash.
4.4 Clidet has raised sufficient capital to fund its investment.
4.5 Clidet has given undertakings that it will:
4.5.1 remain invested in Unitrans for a minimum period of five
years;
4.5.2 not dispose of its shares in Unitrans to non-BEE parties for
a minimum of five years;
4.5.3 not have other investments in competing businesses without
Unitrans` consent; and
4.5.4 actively promote Unitrans` existing and new business.
4.6 The implementation of the issue for cash is subject to a shareholders`
agreement between the shareholders of Clidet and relevant agreements
relating to the funding of the transaction being finally concluded by
1 October 2004.
5. FUNDING FOR THE TRANSACTION
5.1 Clidet has raised loan finance from a bank (`the Bank`) to fund the
investment. The bank loan is secured by a pledge to the bank of all
the issued shares in Clidet as well as the new shares.
5.2 In the event of default on the bank loan and/or certain other trigger
events (as defined in the relevant agreements) occurring, the Bank
will be entitled to sell the loan to Steinhoff Africa Holdings
(Proprietary) Limited (`Steinhoff Africa`), a wholly-owned subsidiary
of Steinhoff International Holdings Limited (`Steinhoff`), for a cash
consideration equal to the outstanding balance owing to the Bank at
the time. Upon the implementation of such sale the Bank will cede and
transfer its rights in terms of the loan and the accompanying security
to Steinhoff Africa (`the cession`).
5.3 In the event of Steinhoff Africa, subject to the terms and conditions
of the cession, becoming entitled to indirect ownership of the new
shares, Steinhoff Africa shall be obliged to offer for sale to
Unitrans shareholders at the time, a pro rata portion of the new
shares in proportion to their shareholdings in Unitrans, at a
consideration per share equal to the underlying outstanding loan
obligation including accrued interest per new share.
6. STEINHOFF`s OFFER TO UNITRANS MINORITIES
Unitrans announced on 15 September 2004 that it had been informed that
Steinhoff had resolved to exercise, for its own account, its pre-emptive
right in respect of Murray & Roberts Holdings Limited`s (`M&R`) interest of
approximately 44% of Unitrans` current issued share capital (`the Steinhoff
acquisition`). Steinhoff will extend an offer to the shareholders of
Unitrans, excluding Steinhoff Africa and M&R, for the acquisition of all of
their shares on the same terms as are applicable to the Steinhoff
acquisition (`the minority offer`). Given the strategic rationale, in
particular the longer term need of Unitrans for empowerment, Clidet has
irrevocably undertaken not to accept the minority offer.
7. PRO FORMA FINANCIAL EFFECTS ON UNITRANS
7.1 The table below sets out the pro forma financial effects of the issue
for cash on Unitrans. The pro forma financial effects have been
prepared, based on certain assumptions, for illustrative purposes
only, in terms of the Listings Requirements of the JSE and, because of
their nature, do not constitute a representation of the future
financial position, results of operations, changes in equity or cash
flows of Unitrans.
Before (1) After (2) After
(cents) (cents) (% change)
Earnings per share 332,5 311,6 (3) (6,3)
Headline earnings per share 346,7 324,0 (3) (6,5)
Net asset value per share 1 746,5 1 845,9 (4) 5,7
Tangible net asset value
per share 1 688,3 1 795,2 (4) 6,3
Notes
(1) Extracted from the published audited preliminary results of
Unitrans for the year ended 30 June 2004.
(2) Based on the pro forma earnings, headline earnings, net asset
value and net tangible asset value per Unitrans share for the
year ended 30 June 2004, adjusted for the issue for cash.
(3) For purposes of the earnings per share and headline earnings per
share figures, it was assumed that the issue for cash was
effected on 1 July 2003 and Unitrans applied the proceeds of the
issue for cash in repaying interest-bearing debt carrying an
after-tax cost of 7% per annum.
(4) For purposes of the net asset value and tangible net asset value
per share figures, it was assumed that the issue for cash was
effected on 30 June 2004.
7.2 The utilisation of the proceeds of the issue of shares for cash may or
may not include the repayment of interest-bearing debt (as was assumed
in the financial effects set out in 7.1 above), depending on various
factors, including the result of the minority offer.
8. LISTING OF THE NEW SHARES
The JSE has granted approval for the listing of the new shares in the
Cyclical Services - `Transport` sector of the JSE lists under the share
code `UTR` with effect from the commencement of business on Monday, 4
October 2004, subject to the fulfilment of the conditions precedent
described in 4.6 above.
Johannesburg
22 September 2004
Sponsor
PSG Capital
Legal Adviser
Cliffe Dekker Attorneys
Merchant Bank
Rand Merchant Bank
A division of FirstRand Bank Limited
Corporate Finance
