| Fri 11 Feb 2005, 17:41 | | REVISED PRO FORMA FINANCIAL EFFECTS |
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JOHNNIC - REVISED PRO FORMA FINANCIAL EFFECTS AND NOTICE OF GENERAL MEETING
JOHNNIC HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1889/000429/06)
(`Johnnic` or `the Company`)
ISIN:ZAE000024352
Code:JNC
REVISED PRO FORMA FINANCIAL EFFECTS AND NOTICE OF GENERAL MEETING
1. INTRODUCTION
Further to the detailed terms announcement published on the Securities Exchange
News Services on 1 December 2004 relating to the unbundling of all of Johnnic`s
shareholding in Johnnic Communications Limited (`Johncom`) to the shareholders
of Johnnic (`Johnnic shareholders`) (`the unbundling`), Johnnic shareholders are
advised that the financial effects which were published in the announcement
relating to the unbundling have been revised. The revised financial effects
include the effect of the acquisition by Johnnic of a 50% interest in the
ordinary issued share capital of Fabcos Investment Holding Company Limited
(`FIH`) for a total consideration of R295 million (`the FIH transaction`) and
the disposal of 40 million MTN Group Limited shares for a net aggregate
consideration of approximately R1.3 billion (`the MTN disposal`). Johnnic
shareholders are further notified of the general meeting to pass the resolutions
necessary to approve and implement the unbundling. The notice of general meeting
is contained in paragraph 3 below.
2. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects are the responsibility of the board of directors
of Johnnic (`the Johnnic board`) and they are presented for illustrative
purposes only and, because of their nature, may not give a fair reflection of
Johnnic`s financial position after the FIH transaction, the MTN disposal and the
unbundling.
2.1 Pro forma financial effects of the FIH transaction and the MTN disposal
The pro forma financial effects of the FIH transaction and the MTN disposal on
100 Johnnic shares held at the record date are set out below.
Assumptions
* For the purposes of calculating the earnings per 100 Johnnic shares in the
`Before` column of the table below, the reviewed financial information for the
six months ended 30 September 2004 was used. The earnings per 100 Johnnic
shares, as set out in the `After` column of the table below, are based on the
assumptions that:
- the FIH transaction occurred on 1 April 2004 and a consideration of R295
million was paid on that day;
- the audited financial statements of TIH for the financial year ended 31 March
2004 were used to calculate the equity accounted earnings of Johnnic for the six
months ended 30 September 2004;
- the FIH transaction had no effect on goodwill;
- the MTN disposal occurred on 1 April 2004, resulting in total proceeds
amounting to approximately R1.3 billion;
- the cash balance earned interest at a rate of 7.5% per annum for the six
months ended 30 September 2004; and
- the weighted average number of Johnnic shares in issue during the six months
ended 30 September 2004 of 166 469 592 was used in the calculation of headline
earnings and attributable earnings.
* For the purposes of calculating the pro forma NAV per 100 Johnnic shares, as
set out in the `Before` column of the table below, the reviewed financial
information of Johnnic at 30 September 2004 was used. The NAV per 100 Johnnic
shares, as set out in the `After` column of the table below, is based on the
assumptions that:
the FIH transaction occurred on 30 September 2004 and a purchase consideration
of R295 million was paid on that day;
the MTN disposal occurred on 30 September 2004 resulting in total proceeds
amounting to approximately R1.3 billion; and
166 470 398 Johnnic shares in issue at 30 September 2004 were used in NAV
calculations.
Per 100 Johnnic shares
Before After
As FIH FIH Percenta
reported transact transact ge
at 30 ion ion and change
Septembe MTN
r 2004 disposal
Headline earnings 6 642 7 210 8 483 28
(cents)
Attributable earnings 8 559 9 127 67 637 690
(cents)
profit on MTN disposal - - 57 236
(cents)
earnings excluding 8 559 9 127 10 401
profit on MTN disposal
(cents)
Intangible NAV (Rand) 141 141 141 -
(excluding minorities
proportionate share)
Tangible NAV (Rand) 1 529 1 529 1 568 3
Total NAV (Rand) 1 670 1 670 1 709 2
2.2 Pro forma financial effects of the unbundling
The effect of the unbundling on a Johnnic shareholder will be that a Johnnic
shareholder will:
- receive 39.10497 shares in Johncom (`the unbundling shares`) for every 100
shares held in Johnnic at the record date being Thursday, 24 March 2005; and
- retain his/her/its existing shareholding in Johnnic, which will reduce in
value to reflect the remaining assets of Johnnic after the implementation of the
unbundling.
The pro forma financial effects of the unbundling on 100 Johnnic shares held at
the record date, are set out below.
Assumptions
* For the purposes of calculating the earnings per 100 Johnnic shares in the
`Before` column of the table below, the earnings per 100 Johnnic shares after
the FIH transaction and the MTN disposal, as per the `After` column of the table
in paragraph 2.1 above, were used. The earnings per 100 Johnnic shares, as set
out in the `After` column of the table below, are based on the assumptions that:
- the unbundling was implemented on 1 April 2004 and that taxation costs of
approximately R272 million were incurred. The taxation costs (comprising CGT,
STC and UST) used are based on the market price of R34 per Johncom share and are
subject to change based on a market price of a Johncom share at the effective
date of the unbundling, being 29 March 2005;
- the Johncom shares were revalued from a book value of R16.37 to R20.62 (being
the market value of a Johncom share at 1 April 2004) in terms of generally
accepted accounting practice, resulting in a revaluation gain of R276.7 million;
and
- the weighted average number of Johnnic shares in issue during the six months
ended 30 September 2004 of 166 469 592 was used in the calculation of headline
earnings and attributable earnings.
For the purposes of calculating the pro forma NAV per 100 Johnnic shares, as set
out in the `Before` column of the table below, the calculated NAV per 100
Johnnic shares after the FIH transaction and the MTN disposal, as per the
`After` column of the table in paragraph 2.1 above, was used. The NAV per 100
Johnnic shares, as set out in the `After` column of the table below, is based on
the assumptions that:
the unbundling was implemented on 30 September 2004 and that taxation costs
(comprising CGT, STC and UST) of approximately R272 million were incurred. The
taxation costs are based on a market price of R34 per Johncom share and are
subject to change based on the market price of a Johncom share at the effective
date of the unbundling, being 29 March 2005; and
166 470 398 Johnnic shares in issue at 30 September 2004 were used in NAV
calculations.
Befor After
e
After Per Per Total Percentage
FIH 100 39.104 change
trans Johnn 97
actio ic Johnco
n and share m
MTN s shares
dispo
sal
Per Per 100
Johnnic Johnnic
shareho shares
lder
Headline earnings 8 483 3 189 4 682 7 871 (7)* (62)
(cents)
Attributable 67 60 6 770 67 462 - (10)
earnings (cents) 637 692
revaluation of - 267 - 267
Johncom shares net
of tax (cents)
profit on MTN 57 57 - 57 236
disposal (cents) 236 236
earnings excluding 10 3 189 6 770 9 959
revaluation of 401
Johncom and profit
on MTN disposal
(cents)
Intangible NAV 141 4 137 141 - (97)
(Rand)
(excluding
minorities
proportionate
share)
Tangible NAV (Rand) 1 568 891 513 1 404 (10)* (43)
Total NAV (Rand) 1 709 895 650 1 545 (10)* (48)
*Decline due to impact of tax on unbundling.
3. NOTICE OF GENERAL MEETING
NOTICE OF GENERAL MEETING
Notice is hereby given that a general meeting of ordinary shareholders of
Johnnic will be held at 09:00 on Wednesday, 9 March 2005, at Gallagher Estate,
19 Richards Drive, Midrand, Gauteng, for the purposes of considering and, if
deemed fit, passing, with or without modification, the ordinary resolutions set
out below, in the manner required by the Companies Act, 1973 (Act 61 of 1973),
as amended (`the Companies Act`), Johnnic`s articles of association and the
Listings Requirements of the JSE Securities Exchange South Africa (`the JSE`):
Ordinary Resolutions
`Resolved that:
1. the Company distribute by way of an unbundling to its ordinary shareholders
registered at the close of business on Thursday, 24 March 2005 or such other
date as shall be determined by the directors of the Company (`the directors`),
all of the ordinary shares in Johnnic Communications Limited (`Johncom`) held by
the Company, such unbundling to be effected on a basis to be determined by the
directors and in terms of section 90 of the Companies Act, 1973 (Act 61 of
1973);
2. should any shareholder of the Company be prohibited from receiving a
distribution of ordinary shares in Johncom under the laws of the relevant
jurisdiction to which he/she/it is subject, the directors are authorised to sell
such shares to which he/she/it would have been entitled on the JSE Securities
Exchange South Africa and to pay such shareholders the cash equal to the
proceeds (net of costs) derived from such sale; and
3. any one director of the Company or the Company Secretary is hereby authorised
to do all things and sign all such documents as may be necessary to give effect
to ordinary resolutions numbers 1 and 2.`
VOTING
On a show of hands, every shareholder of Johnnic, who (being an individual) is
present in person or by proxy at the general meeting of Johnnic shareholders or
which (being a company or other body corporate) is represented thereat by a
representative appointed pursuant to section 188 of the Companies Act, shall
have one vote and, on a poll, every ordinary shareholder of Johnnic present
(whether an individual or company or other body corporate) or represented by a
proxy at the general meeting, shall have one vote for every share held or
represented by him/her/it.
FORM OF PROXY
Certificated Johnnic shareholders and own name registered dematerialised Johnnic
shareholders entitled to attend and vote at the general meeting of Johnnic
shareholders may appoint one or more proxies to attend and speak and to vote
thereat in their stead. A proxy need not be a shareholder of Johnnic.
A form of proxy, in which is set out the relevant instructions for its
completion, will be attached to the Johnnic unbundling circular which will be
posted to Johnnic shareholders on Friday, 11 February 2005, for use by such
shareholder of Johnnic who is unable to attend the general meeting but who
wishes to be represented thereat. Such form of proxy will also be available at
the offices of Johnnic and Computershare Investor Services 2004 (Proprietary)
Limited (`the registrar`) at the addresses given below. Completion of a form of
proxy will not preclude such shareholder of Johnnic from attending and voting
(in preference to the appointed proxy) at the general meeting of shareholders of
Johnnic.
The instrument appointing a proxy and the authority (if any) under which it is
signed must be received by Johnnic or its registrar at the addresses given below
by no later than 09:00 on Monday, 7 March 2005.
Beneficial shareholders who have already dematerialised their shares through a
Central Securities Depository Participant (`CSDP`) or broker, other than own
name registered dematerialised Johnnic shareholders, and who wish to attend the
general meeting must request their CSDP or broker to provide them with the
necessary authorisation to attend the general meeting or must instruct their
CSDP or broker to vote on their behalf in terms of their respective agreements
with their CSDP or broker. The requisite authority must be lodged with the
Company or its registrar at the addresses given below by not later than 09:00 on
Monday, 7 March 2005.
Any shareholder with queries in relation to the general meeting or any of the
above is invited to contact Johnnic`s registrar, by telephone on 0800117472 or
+27 (0)11 775-3433 if calling from outside South Africa. Calls may be monitored
for quality control purposes.
By order of the board
Michael RD Boyns
Company secretary
Midrand
11 February 2005
Registered office Registrar
Level 3 (West Wing) Computershare Investor
Gallagher House Services 2004 (Proprietary)
Gallagher Estate Limited
70 Marshall Street
Johannesburg 2001
19 Richards Drive
Midrand, Gauteng (PO Box 61763, Marshalltown,
2107)
(PO Box 231, Johannesburg, 2000) Telephone number: 0800 117
472 or
+27 (0)11 870 8203 if calling
from outside South Africa.
Investment Bank and Legal Advisors Tax Advisors
Transaction Sponsor
Standard Bank Webber Wentzel Deloitte
Bowens
Advisor to the Auditors Sponsor
Independent
Committee
PWC Deloitte Merrill Lynch South
Africa (Proprietary)
Limited
Date: 11/02/2005 05:30:07 PM
Produced by the JSE SENS Department
