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CASHBUILD LIMITED - A SPECIFIC ISSUE OF SHARES FOR CASH TO THE CASHBUILD
EMPOWERMENT TRUST (`THE TRUST`)(`THE TRANSACTION`)
Cashbuild Limited
(Incorporated in the Republic of South Africa)
(Registration number 1986/001503/06)
Share code: CSB ISIN: ZAE000028320
(`Cashbuild` or `the company`)
A SPECIFIC ISSUE OF SHARES FOR CASH TO THE CASHBUILD EMPOWERMENT TRUST (`THE
TRUST`)(`THE TRANSACTION`)
1. Introduction and rationale
Cashbuild`s shareholders approved the introduction of Cashbuild`s employees as a
broad-base empowerment shareholder at the company`s annual general meeting on
6 December 2004 (`approved transaction`). In terms of the approved transaction,
Cashbuild Management Services (Proprietary) Limited would lend R70 million to
the Trust to acquire up to 10% of the issued share capital of Cashbuild.
It was envisaged that the Trust, by approaching Cashbuild`s shareholders, would
be able to acquire 10% of the shares in the open market at a price of no more
than R30 per share. On the day the approved transaction was announced
Cashbuild`s shares traded above R30. Further to this, shareholders who were
approached required a premium to the current market price to sell their shares.
Although the Trust has a period of 365 days to acquire the shares, the
probability of obtaining the 10% holding by the Trust at the envisaged price
appears unlikely. In light of these events Cashbuild proposes to issue new
shares to the Trust to facilitate the approved transaction.
2. Key terms of the transaction
Cashbuild proposes that the Trust subscribes for 2 580 535 new Cashbuild shares
at R29.09, equating to the 30 day volume weighted average price of Cashbuild
shares up to 10 November 2004, being the announcement date of the approved
transaction. The issue of new shares for cash will have no impact on Cashbuild`s
current cash resources.
The loan to the Trust from Cashbuild Management Services (Proprietary) Limited
needs to be increased by R5 067 763.15 from R70 000 000.00 to R75 067 763.15 to
enable the Trust to subscribe for 10% of the ordinary shares in the capital of
Cashbuild post the issue.
3. Conditions precedent
The increase in the loan to the Cashbuild Empowerment Trust and the specific
issue of new shares for cash remain subject to the approval by the Cashbuild
shareholders at the general meeting to be held on Monday, 7 February 2005 at
Cashbuild`s registered offices.
4. Financial effects
The table below sets out the pro-forma financial effects, on a consolidated
basis, of the transaction on the earnings per share (`EPS`), headline earnings
per share (`HEPS`), net asset value per share (`NAV`) and net tangible asset
value per share (`NTAV`) of the Company based on the audited financial results
for the year ended 30 June 2004. This pro-forma financial information has been
prepared for illustrative purposes only and because of its nature may not give a
true picture of Cashbuild`s financial position and results of operations, nor
the effect or impact of the transaction going forward. The preparation of the
pro-forma financial information is the responsibility of the directors and in
the opinion of PricewaterhouseCoopers Inc. the adjustments are appropriate for
the purposes of the unaudited financial effects in terms of Section 8.30 of the
JSE Listings Requirements.
Consolidated
Before the After the Percentage
transaction transaction increase/
(cents)(1) (cents) (decrease)
EPS 248.3 238.1(2) -4.1
HEPS 251.4 241.1(2) -4.1
NAV 724.8 643.8(3) -11.2
NTAV 688.1 610.8(3) -11.2
Shares in issue 23.2 25.8 11.2
(millions)
Notes
(1) Extracted from the published financial results for the year ended 30 June
2004.
(2) Based on the assumption that the transaction was implemented on 1 July 2003
and that 2 580 535 new shares were issued to the Cashbuild Empowerment Trust at
the 30 day volume weighted average price of R29.09 from the date of announcement
of the approved transaction on 10 November 2004.
(3) Based on the assumption that the transaction was implemented on 30 June
2004.
Cashbuild`s auditors, PricewaterhouseCoopers Inc. have given their opinion that
the Trust shall be consolidated in Cashbuild`s group annual financial
statements.
5. Further details
A circular, giving further details, will be posted to shareholders on or about
14 January 2005.
Johannesburg
12 January 2005
Investment bank and sponsor
Nedbank Capital
Independent reporting accountants
PricewaterhouseCoopers Inc.
Corporate law advisers and consultants
Van der Heever & Associates
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