| Wed 2 Feb 2005, 16:59 | | Disposal |
|
Moneyweb - Disposal By Moneyweb Holdings Limited (`Moneyweb`) Of 80% Of Its
Holding In Classic FM South Africa (Proprietary) Limited (`Classic
FM`)
MONEYWEB HOLDINGS LIMITED
(Registration No:1998/025067/06)
Share code : MNY ISIN: ZAE000025409
(`Moneyweb` or `the Company`)
DISPOSAL BY MONEYWEB HOLDINGS LIMITED (`MONEYWEB`) OF 80% OF ITS HOLDING IN
CLASSIC FM SOUTH AFRICA (PROPRIETARY) LIMITED (`CLASSIC FM`)
1. Introduction
Grant Thornton Corporate Finance (Proprietary) Limited is authorised to announce
that Moneyweb has reached agreement with Huntrex 144 (Proprietary) Limited
(`Huntrex`) in terms of which Moneyweb will dispose of 80% of its 19.62%
shareholding in Classic FM to Huntrex for a cash consideration of R4 million
with effect from the earlier of 15 February 2005, or the payment of the first
tranche of R2 million referred to in paragraph 4 below(`the disposal`).
Classic FM is a radio station playing classical music, transmitting on the FM
frequency, which used to broadcast the business program hosted by Alec Hogg, the
executive chairman of Moneyweb.
2. Rationale for the disposal
The rationale for the disposal follows the split between Moneyweb and Classic FM
in July 2004, at which time the Company moved its business programming to other
radio stations. Following subsequent discussions, Moneyweb has now agreed to
relinquish its direct board level representation and as a result will no longer
be able to influence the financial performance of Classic. This transaction
ensures that the original investment of 5 million Moneyweb shares plus a R2,1
million cash injection will be recouped. The residual 4% shareholding has been
retained for strategic reasons.
3. Details of the purchaser
Huntrex is a newly formed Black Economic Empowerment entity represented by
Dominic Ntsele. Irvin Khoza, a very prominent soccer personality, is another
shareholder.
Dominic Ntsele is a communications strategist with international experience. He
is the managing director of Capacity Building Group, a lobbying practice
advising clients on government and media-related issues worldwide.
In terms of the disposal agreement, Dominic Ntsele will be appointed to the
board of directors of Classic FM.
4. Settlement of the purchase consideration
The purchase consideration will be settled as follows:
- The payment of R2 million in cash by no later than 15 February 2005; and
- The payment of a further R2 million on the earlier of 1 year from the date
of the disposal agreement, being 1 February 2005 or the obtaining of the
approval of the Independent Communications Authority of South Africa (`ICASA`)
of the disposal.
The proceeds of the disposal will be utilised by Moneyweb to fund internal
operations and to take advantage of any opportunities that may arise.
5. Conditions precedent
The disposal agreement is subject to the following resolutive conditions:
- ICASA approves of the disposal by not later than one year from the date of
the disposal agreement, being 1 February 2005;
- on or before 15 February 2005, Classic FM delivers to Moneyweb a resolution
by the board of directors of Classic FM approving the disposal as well as
entitling Huntrex to appoint two directors to the Classic FM board, one of which
will be Dominic Ntsele, who has undertaken to look after Moneyweb`s interests;
and
- on or before 15 February 2005, Moneyweb delivers to Huntrex a resolution of
directors approving the disposal.
6. Warranties
The agreement contains warranties which are normal for a transaction of this
nature.
7. Pro forma financial effects of the disposal
The pro forma financial effects set out below have been prepared for
illustrative purposes only to provide information on how the disposal might have
affected the financial information presented in respect of the interim period
for the 6 months ended 30 September 2004, and because of its nature, may not
fairly present the Company`s financial position and results of operations after
the disposal.
Before(1) After % change
Basic loss per share
(cents) (9,9) (3,0)
(10,2)(2),(4)
Headline loss per
share (cents) (0,3) -
(0,3)(2),(4)
Fully diluted loss per (9,9) (3,0)
share (cents) (10,2)(2),(4)
Fully diluted headline (0,3) 0,0
loss per share (cents) (0,3)(2),(4)
Net asset value per 24,4 23,9(3),(5) (2,0)
share (cents)
Net tangible asset 15,1 14,5(3),(5) (4,0)
value per share
(cents)
Notes:
1. The information in the `Before` column has been extracted, without
adjustment, from the unaudited interim results of Moneyweb for the six
months ended 30 September 2004
2. The loss per share and headline loss per share calculations have been based
on the assumption that the disposal took place on 1 April 2004.
3. The net asset value and net tangible asset value per share calculations
have been based on the assumption that the disposal took place on 30
September 2004.
4. The loss per share has been adjusted to exclude 80% of the income earned by
Classic FM attributable to Moneyweb for the six months ended 30 September
2004 and the amortisation of goodwill relating to Classic FM for that
period, and to include interest earned on the purchase consideration at an
after tax rate of 4,9% and the loss on sale on the disposal.
The headline loss per share excludes the loss on the disposal and the
amortisation of goodwill remaining after the amortisation of goodwill relating
to Classic FM has been excluded.
The loss on the disposal has been calculated as the difference between the book
value of the investment in Classic FM at 1 April 2004, and the purchase
consideration of R4 million.
5. Net asset value and net asset value per share has been adjusted to exclude
80% of Moneyweb`s investment in Classic FM, and to include the purchase
consideration of R4 million received in cash.
Rosebank
2 February 2005
Sponsor
Grant Thornton Corporate Finance (Proprietary) Limited
