| Mon 15 Nov 2004, 14:45 | | Proposed Minority Buyout And Delisting |
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Vaaltrucar/Vaalauto - Proposed Minority Buyout And Delisting
VAALTRUCAR LIMITED
(Registration number 1987/000988/06)
(Incorporated in the Republic of South Africa)
Share code: VCR
ISIN: ZAE000007704
(`Vaaltrucar`)
VAALAUTO LIMITED
(Registration number 1983/013044/06)
(Incorporated in the Republic of South Africa)
Share code: VLT
ISIN: ZAE000007746
(`Vaalauto`)
(collectively `the companies`)
PROPOSED CONVERSION OF MINORITY SHARES IN THE COMPANIES INTO REDEEMABLE
PREFERENCE SHARES, THE REDEMPTION THEREOF AND DELISTING OF THE COMPANIES
1. Introduction
Shareholders of the companies are referred to the joint cautionary announcement
published on SENS on 16 August 2004 where it was advised that, following a
change of control in the companies, the companies were considering proposals
which would have the effect of acquiring all the shares of minority shareholders
in the companies and delisting the companies. Minority shareholders hold 864 034
shares in Vaaltrucar, comprising 5.4% of Vaaltrucar`s issued share capital, and
2 353 725 shares in Vaalauto, comprising 14.3% of Vaalauto`s issued share
capital.
Shareholders in the companies are now advised that the directors propose the
conversion of the issued shares held by minority shareholders in each of the
companies into an equal number of redeemable preference shares, the simultaneous
redemption thereof and the delisting of the companies from the JSE Securities
Exchange South Africa (`JSE`) (`the proposals`). The proposed redemption price
will be 80 cents per Vaaltrucar share and 90 cents per Vaalauto share.
2. Reasons for the proposals
The major shareholders in Vaaltrucar, comprising Messrs C Blechman and L Sank,
together with Macsteel Holdings (Pty) Ltd (`the major shareholders`), currently
hold 94.6% of the entire issued share capital of Vaaltrucar, which holds 85.7%
of the entire issued share capital of Vaalauto. There are only about 144
minority shareholders in Vaaltrucar holding 5.4% of Vaaltrucar and about 165
minority shareholders in Vaalauto, holding 14.3% of that company. In the
financial year ended 29 February 2004, no Vaalauto or Vaaltrucar shares traded
on the JSE, and in the financial year ended 28 February 2003, only 9 175
Vaalauto and 15 500 Vaaltrucar shares traded for total values of approximately
R3 000 and R7 750 respectively.
Given the above circumstances, the companies and their shareholders derive no
benefit from the listing of their shares. The poor liquidity makes it unlikely
that the companies will be able to raise capital or make an acquisition by
issuing shares, and it is further unlikely that shareholders will be able to
sell their shares.
The proposals will result in Vaalauto minority shareholders being able to
realise their shares at a 125% premium to the recent traded price of 40 cents,
and Vaaltrucar minority shareholders realising their shares at 100% premium to
the recent traded price of 40 cents, with no transactional costs.
Following the conversion and redemption of the minority shares, the companies
will not comply with the JSE Listings Requirements and will be delisted.
3. Arrangement with the Securities Regulation Panel (`SRP`)
The major shareholders have undertaken to the SRP, that should the proposals not
be implemented for any reason, they would proceed with a mandatory offer in
terms of the Securities Regulation Code on Mergers and Takeovers to minority
shareholders in the companies to acquire their shares at a price of 50 cents per
Vaaltrucar share and 58.3 cents per Vaalauto share, together with a suitable
price adjustment in each case for the delay in making the offer.
4. Irrevocable undertakings
In terms of the requirements of the JSE and SRP, it will be necessary to obtain
the approval of not less than 50% of minority shareholders in Vaaltrucar and
Vaalauto respectively present (or represented) and voting at a general meeting
of each company to be convened to approve the proposals. Irrevocable
undertakings to vote in favour of the proposals in respect of Vaaltrucar have
been received from the holders of 500 000 Vaaltrucar shares, comprising 58% of
Vaaltrucar minority shares, and in respect of Vaalauto from the holders of 1 445
500 Vaalauto shares, comprising 61% of Vaalauto minority shares.
5. Conditions
The implementation of the proposals will be subject to the fulfilment of the
following suspensive conditions:
5.1 Obtaining the requisite regulatory approvals, including from the South
African Reserve Bank, the SRP and the JSE;
5.2 Gaining the necessary majority of votes in favour of each of the special
and ordinary resolutions to be proposed at the general meetings of both
companies to be convened to approve the proposals; and
5.3 The registration with the Registrar of Companies of the special resolutions
so passed.
It is a further suspensive condition (`the suspensive condition`) to the coming
into operation of the proposals that all the aforesaid conditions are fulfilled
in respect of both Vaaltrucar and Vaalauto. Both companies have, however, agreed
that the major shareholders may at their election waive the suspensive condition
in respect of either company.
6. Salient dates of the proposals
2004
Date of posting of the circulars to Tuesday, 16 November
shareholders in the companies
Last day for receipt of forms of proxy in
respect of the general meetings (not Tuesday, 7 December
later than 10:00 in respect of Vaalauto
and 10:15 in respect of Vaaltrucar)
Vaalauto general meeting to be held at Thursday, 9 December
10:00
Vaaltrucar general meeting to be held at
10:15
Announcement of the results of the Thursday, 9 December
general meetings made on SENS
Announcement of the results of the Friday 10 December
general meetings published in the press
Last day to trade in shares on the JSE Friday, 17 December
Suspension of trading in shares on the Monday, 20 December
JSE from the commencement of trade
Record date Friday, 24 December
Dematerialised shareholders will have Tuesday, 28 December
their accounts at their CSDP or broker
credited on or about
Certificated shareholders will have their Tuesday, 28 December
cheques posted or electronic transfers
made to their bank accounts provided that
the surrender forms and share
certificates or documents of title are
received by Friday, 24 December 2004
Listing of Vaalauto and Vaaltrucar shares Wednesday, 29 December
on the JSE terminated from the
commencement of trade
Notes:
1. Any variation of the above dates and times will be advised by
notification on SENS and in the press.
2. Subject to fulfilment of the suspensive conditions referred to in 5
above, the redemption proceeds will be posted or transferred to
certificated shareholders at the risk of the minority shareholders on
Tuesday, 28 December 2004. Dematerialised shareholders will have
their accounts at their CSDP or broker credited and updated on
Tuesday, 28 December 2004.
3. Subject to fulfilment of the suspensive conditions referred to in 5
above, no dematerialisation or rematerialisation of shares in the
companies will take place after the last day to trade, anticipated to
be Friday, 17 December 2004.
7. Financial effects of the proposals on minority shareholders
7.1 The table below sets out the financial effects of the proposals on a
Vaaltrucar shareholder.
Before After Change
(cents) (cents) (%)
Market price 40 (1) 80(4) 100%
Earnings per share 4.7 (2) 3.8 (3) (18%)
Headline earnings per 4.4 (2) 3.8 (3) (13%)
share
Net asset value per 120(2) 80 (4) (33%)
share
Net tangible asset value 120 (2) 80 (4) (33%)
per share
Notes:
1. The price at which Vaaltrucar shares closed on 1 April 2004, the day
of the first joint cautionary announcement.
2. Extracted from the audited annual financial statements of Vaaltrucar
for the year ended 29 February 2004.
3. Earnings and headline earnings per share are shown using the
assumption that the cash consideration was invested at 8% per annum
for the 12 months ended 29 February 2004, less the maximum individual
income tax rate applicable and excluding any capital gains tax
implications.
4. The redemption price of Vaaltrucar shares.
The table below sets out the financial effects of the proposals on a Vaalauto
shareholder.
Before After Change
(cents) (Cents) (%)
Market price 40.0 (1) 90.0(4) 125
Earnings per share 5.0 (2) 4.3 (3) (14)
Headline earnings per 5.0 (2) 4.3 (3) (14)
share
Net asset value per 146 (2) 90 (4) (38)
share
Net tangible asset 145 (2) 90 (4) (38)
value per share
Notes:
1. The price at which Vaalauto shares closed on 1 April 2004, the day of
the first joint cautionary announcement.
2. Extracted from the audited annual financial statements of Vaalauto for
the year ended 29 February 2004.
3. Earnings and headline earnings per share are shown using the
assumption that the cash consideration was invested at 8% per annum
for the 12 months ended 29 February 2004, less the maximum individual
income tax rate applicable and excluding any capital gains tax
implications.
4. The redemption price of Vaalauto shares.
The above financial effects are presented for illustrative purposes only on
the basis stated and are the responsibility of the directors of Vaaltrucar
and Vaalauto respectively.
8. Cash confirmation to the SRP
FNB Corporate, a division of FirstRand Bank Limited has confirmed to the
satisfaction of the SRP that the companies have sufficient cash resources
to implement the proposals.
9. Independent advice and circulars relating to the proposals
The respective boards of the companies have appointed Sasfin Corporate
Finance as the independent adviser to advise on the proposals and how they
affect the minority shareholders in the respective companies. Sasfin has
advised that in its opinion the terms and conditions of the proposals are
fair and reasonable to both Vaaltrucar and Vaalauto minority shareholders.
It is expected that the substance of such advice and the recommendation of
the boards will be communicated to shareholders by means of separate
circulars which will be posted to shareholders of each of the companies on
or about 16 November 2004. Such circulars will, in addition to providing
detailed information in respect of the proposals, contain notices of
general meetings of shareholders in the companies convened to approve the
proposals.
Middelburg
15 November 2004
Legal Adviser
HR LEVIN ATTORNEYS NOTARIES AND CONVEYANCERS
Sponsor and Independent adviser to the companies
SASFIN CORPORATE FINANCE
A DIVISION OF SASFIN BANK LIMITED
Date: 15/11/2004 02:00:10 PM
Produced by the JSE SENS Department
