| Wed 13 Oct 2004, 14:28 | | PROPOSED ACQUISITION OF AFRICAN DAWN INVESTMENTS |
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ABC - PROPOSED ACQUISITION OF AFRICAN DAWN INVESTMENTS
ABC CASH PLUS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/020520/06)
JSE Share code: APS ISIN: ZAE000017554
(`ABC`)
PROPOSED ACQUISITION OF AFRICAN DAWN INVESTMENTS RESULTING IN A 26% BLACK
ECONOMIC EMPOWERMENT SHAREHOLDING IN ABC
1. Introduction
Exchange Sponsors is authorised to announce that ABC has entered into an
agreement with the shareholders of African Dawn Investments (Pty) Ltd
(`African Dawn`), a Black Economic Empowerment (`BEE`) company, with regard
to acquiring all of the shareholding in African Dawn (`the acquisition`).
The acquisition will result in African Dawn shareholders being issued ABC
shares, resulting in ABC having a 26% BEE shareholding.
2. Rationale for the transaction
ABC`s current funders comprise mainly government/quasi-government
institutions while its client base comprise solely of Historically
Disadvantaged Individuals (`HDI`s`). The acquisition will result in 26% of
ABC`s shareholding being held directly by BEE shareholders, resulting in
compliance with ABC`s stated BEE intentions and the Financial Services
Charter. The BEE shareholding will also facilitate the expansion of ABC`s
business and introduce and retain the critical and skills base that is
essential to ABC`s business going forward.
3. Details of African Dawn
African Dawn is a fully empowered financial services company, which is
owned by Thando Dingaan, Johnny Ramashela, both executive directors of ABC,
and Mowana Investments (Pty) Ltd.
4. Terms of the transaction
ABC will acquire all of the shareholding in African Dawn for a total
consideration of R1 772 559 to be paid by the issue of 17 725 598 new
shares in ABC to African Dawn, at an issue price of 10 cents per ordinary
ABC share. The effective date of the acquisition is the date upon which all
the conditions precedent detailed below has been fulfilled.
The implementation of the acquisition is subject to the fulfillment of the
condition precedent that on/or before 31 December 2004, ABC obtains the
necessary regulatory approval for the transaction.
In addition, a resolutive condition is applicable to the acquisition
whereby ABC and African Dawn will endeavour to secure additional debt
funding for ABC of at least R 50 million on/or before 31 December 2005, in
order to enable it to continue with its business and to increase its loan
book. African Dawn has already assisted ABC to secure the R15 million loan
facility from the National Housing Finance Corporation as announced on SENS
on 29 June 2004, thus leaving the balance of the required additional debt
funding at R35 million.
5. Pro-forma financial effects
5.1 The table below sets out the unaudited pro forma financial effects of
the transaction on the earnings, headline earnings and the net asset
value and tangible net asset value per ABC share, based on the
assumption that:
5.1.1 for the purpose of calculating the earnings and headline
earnings per share, the additional earnings that will be
earned on the additional funding to be secured as if the
funding has been available for the 6 month period to 31
August 2004 and using a weighted average of 68 225 378
ordinary ABC shares in issue for the 6 months.
5.1.2 for the purpose of calculating the net asset value and net
tangible asset value per share, the transaction was effected
on 31 August 2004.
Before After Change
(cents) (cents) (%)
(1)
Headline earnings and earnings 2,04 2,74 34,3
per share (cents) (2)
Net asset value and net 12,89 12,14 (5,8)
tangible asset value per share
(cents) (3)
Notes:
1. Extracted from the unaudited reviewed results of ABC for the six months
ended 31 August 2004.
2. Earnings and headline earnings per share calculations were based on the
expected earnings to be derived from the additional funding to be obtained,
at a draw down rate of R 2,0 million per month and based on a weighted
average of 68 225 378 ordinary ABC shares in issue for the 6 months ended
31 August 2004.
3. The net asset value and net tangible asset value per share calculations
were based on 68 225 378 shares in issue at 31 August 2004.
5.2 The financial effects contained in table 5.1 above have been prepared
for the purposes of illustrating how the transaction would have
affected the relevant financial results and position of ABC for the
historical financial period indicated and on a pro forma basis.
Accordingly, such effects do not necessarily represent a true
reflection of the financial effects of the transaction on ABC`s
current and future earnings.
6. Related party transaction and fair and reasonable opinion
In terms of the JSE Securities Exchange South Africa (`JSE`) Listing
Requirements this transaction is a related party transaction, given that
Thando Dingaan and Johnny Ramasehla are both employed as executive
directors of ABC. In compliance with the JSE Listing Requirements, ABC has
appointed the designated advisor, Exchange Sponsors (Pty) Limited and
Marriott Merchant Bank Limited to advise the shareholders of ABC as to
whether the terms and conditions of the transaction are fair and
reasonable.
Exchange Sponsors (Pty) Limited and Marriott Merchant Bank Limited have
advised ABC that it is of the opinion that the terms and conditions of the
transaction are fair and reasonable to ABC shareholders. The fair and
reasonable opinion is available for inspection at the company`s registered
office.
7. Further announcement
A further announcement will be made once the transaction becomes
unconditional.
13 October 2004
Johannesburg
Designated Advisor
Exchange Sponsors
Independent Advisor
Marriott Merchant Bank
Date: 13/10/2004 01:56:12 PM
Produced by the JSE SENS Department
