| Tue 15 Feb 2005, 17:23 | | WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT |
|
Kairos - Odd Lot Offer; Pro Rata Offer; BEE Initiative; Withdrawal of cautionary
KAIROS INDUSTRIAL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1987/002927/06)
Share code: KIR ISIN: ZAE000011284
(`Kairos` or `the company`)
ODD LOT OFFER
PRO RATA OFFER
BEE INITIATIVE
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Kairos is mindful of its obligations and commitment to the Broad Based Black
Economic Empowerment (`BEE`) process, which forms an integral and essential part
of the South African business environment. Kairos subscribes fully to the
principles and processes of skills transfer and the economic empowerment of
previously disadvantaged individuals (`PDIs`), such that both PDIs and the South
African economy, as a whole, can meet their full potential. The company is fully
committed to the challenges and development of BEE, through the transformation
of the fabric of human potential in South Africa, in such a way that all become
active and contributing members of society.
In pursuit of the abovementioned initiative and further to the cautionary
announcement dated 12 January 2005, shareholders of Kairos are notified that the
board of directors has resolved, subject to obtaining the necessary shareholder
approvals, to proceed with:
1.1 an odd lot offer to all shareholders holding less than 2 000 shares (`the
odd lot offer`). An application was made to, and granted by, the JSE
Securities Exchange South Africa (`the JSE`) to allow Kairos to implement
an odd lot offer to shareholders holding in excess of 100 shares;
1.2 a pro rata offer to all shareholders to acquire 10% of their shareholdings
(`the pro rata offer`); and
1.3 the establishment of a Black Economic Empowerment Trust (`the BEE Trust`),
which will hold an initial 10% interest in Kairos (`the BEE Initiative`),
for the benefit of all black employees of the Kairos group,
details of which are set out below.
2. The odd lot offer
At 31 December 2004, eight hundred and nine (55%) of the 1 461 Kairos
shareholders held less than 2 000 shares. These shareholders held in aggregate
104 520 shares (or 0,04%) of the total number of 252 085 399 shares in issue.
The proposed odd lot offer will:
- enable Kairos to decrease the substantial recurring costs of administration
relating to this large number of small shareholdings on the Kairos share
register; and
- enable odd lot shareholders to participate in the odd lot offer, either as
an affordable exit strategy or cost effective means of increasing their
shareholding.
The odd lot offer will be implemented on the basis that the odd lot shareholders
may elect either to:
- subscribe for a sufficient number of new shares from Kairos at the offer
price in order to increase their odd lot shareholdings to 2 000 shares;
- sell their odd lot shareholdings to Kairos at the offer price; or
- retain their odd lot shareholdings.
The offer price is 35 cents per share (`the offer price`), being the volume
weighted average price of Kairos shares on the JSE for the 30 trading days
immediately preceding Monday, 7 February 2005, the date the structure of the BEE
Initiative was finalised. Salient dates and times pertaining to the odd lot
offer will be announced in due course.
3. The pro rata offer
In order to facilitate the BEE Initiative, the directors have resolved, subject
to approval by the company`s shareholders, to proceed with the pro rata offer to
all Kairos shareholders. As with the odd lot offer, the shares repurchased by
the company in terms of the pro rata offer will be disposed of to the BEE Trust.
In terms of the pro rata offer, Kairos is offering to repurchase from all Kairos
shareholders 10% of their Kairos shares held on the record date for the pro rata
offer. Shareholders may tender in excess of 10% of their shareholding and such
excess tenders will be dealt with on an equitable basis. It is proposed that
such shares be repurchased on credit at the offer price.
The proposed payment terms are as follows:
- the purchase price of 35 cents per share will be paid in 6 equal bi-annual
instalments;
- the first instalment is payable on transfer of ownership of the shares,
with the next instalments payable on 30 September 2005 and every six months
thereafter;
- should any balance still be outstanding after 3 years the amount owing will
bear interest at prime plus 2% payable on the same date as the due date for
the abovementioned capital payments; and
- Kairos will be entitled to settle the outstanding balance earlier should it
be in a position to do so.
Shefa Equity Holdings (Pty) Limited (a company representing the interest of the
Shefa Family Trust and indirectly that of Mr WL van Deventer), the company`s
controlling shareholder, has given an irrevocable undertaking to accept the pro
rata offer to the extent required to ensure that the BEE Trust`s initial
shareholding in the company is not less than 10%.
4. The BEE initiative
Subject to approval by the company`s shareholders, 25 208 540 shares repurchased
by Kairos in terms of the odd lot offer and the pro rata offer, representing 10%
of the company`s issued share capital, will be disposed of to the BEE Trust. The
shares will be disposed of to the BEE Trust at the offer price. The purchase
consideration will be funded by Kairos and will constitute a loan by Kairos to
the BEE Trust. The loan will be interest free and will only be repayable from
dividends received by the BEE Trust as and when the BEE Trust is in a financial
position to do so, provided that the BEE Trust shall make no distributions to
the beneficiaries thereof, until such time as the loan by Kairos has been
repaid.
5. Financial effects
The financial effects of the odd lot offer, pro rata offer and BEE Initiative on
Kairos` earnings, headline earnings, net asset value and net tangible asset
value per share are not significant, as defined by the JSE Listings
Requirements, for the following reasons:
- all the shares repurchased by Kairos in terms of the odd lot offer and the
pro rata offer will be immediately disposed of by Kairos to the BEE Trust;
and
- the price at which the odd lot offer, the pro rata offer and the BEE
Initiative are to be implemented is the same.
6. General meeting, documentation and withdrawal of cautionary announcement
A general meeting will be held to consider and if deemed appropriate, to pass,
with or without modification, the resolutions necessary to approve and implement
the odd lot offer, the pro rata offer and the BEE Initiative.
A circular containing details of, inter alia, the odd lot offer, the pro rata
offer and the BEE Initiative and incorporating a notice of general meeting will
be posted to shareholders shortly.
As details of the BEE Initiative have now been published, shareholders are no
longer required to exercise caution when dealing in their Kairos shares.
By order of the board
L Jonker
Company Secretary
Pretoria
15 February 2005
Sponsor
Bridge Capital
Legal Advisers
TWB
Date: 15/02/2005 05:00:11 PM
Produced by the JSE SENS Department
