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Johnnic Holdings Limited - Disposal of interest in MTN Group Limited
Johnnic Holdings Limited
Incorporated in the Republic of South Africa
Registration number 1889/000429/06
JSE share code: JNC
ISIN: ZAE000024352
(`Johnnic` or `the Company`)
Disposal of interest in MTN Group Limited
1. Introduction and rationale
Shareholders are referred to the circular dated 16 May 2003 relating to the
unbundling by way of a distribution in specie by Johnnic to its shareholders of
substantially all of its shares in MTN Group Limited (`MTN`) in terms of section
46 of the Income Tax Act, 1962 (Act 58 of 1962), as amended, and section 90 of
the Companies Act, 1973 (Act 61 of 1973), as amended.
As advised in this circular and agreed to by shareholders, 40 million MTN shares
were retained as current assets to cover a corporate guarantee in respect of
Durban Add-Ventures Limited in an amount of R300 million including interest,
potential funding requirements for the Suncoast Casino and Entertainment World
(Proprietary) Limited as well as to provide Johnnic`s ongoing working capital
requirements.
The Johnnic Board of Directors approved the disposal of the MTN shares in an
orderly manner through the market (`the disposal`).
2. Salient terms of the disposal
The disposal was effected through the market during November 2004 for a net
aggregate consideration of R1.3 billion.
3. Financial effects
The table below sets out the pro forma financial effects of the disposal based
on the audited financial results of the Company for the year ended 31 March
2004:
Before After %
Change
Attributable earnings (Rm) 287 1 331 364
Headline earnings (Rm) 123 214 74
Attributable earnings per 173 802 364
share (cps)
Headline earnings per share 74 129 74
(cps)
Net asset value (Rm) 2 667 2 646 0
Net asset value per share 1600 1600 0
(cps)
Assumptions:
1. 40 million MTN shares were sold on 1 April 2003 for income statement
purposes;
2. 40 million MTN shares were sold on 31 March 2004 for balance sheet
purposes;
3. Interest earned on proceeds from date of sale at 7% p.a. (average money
market rate for the year); and
4. MTN shares sold at an average net price of R32.44 per share.
4. Cautionary announcements
Shareholders are advised that the disposal does not relate to the cautionary
announcement published on 22 September 2004 and the subsequent cautionary
renewal announcement published on 26 October 2004, informing shareholders of the
appointment of an Independent Committee of the Board of Directors of Johnnic and
the process of addressing the Johnnic / Johnnic Communications Limited pyramid
structure on the JSE Securities Exchange South Africa.
Midrand
25 November 2004
Sponsor
Merrill Lynch South Africa (Pty) Limited
Legal adviser
Webber Wentzel Bowens
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