| Fri 22 Apr 2005, 16:09 | | Acquisition Of Preference Share And Participation |
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BTG / Altron - Acquisition Of Preference Share And Participation Loan By BTG
Subsidiary
Bytes Technology Group Limited
Incorporated in South Africa
Registration number 1911/003874/06
Share code: BTG
ISIN: ZAE000029526
(`BTG` or `the company`)
Allied Electronics Corporation Limited
Incorporated in South Africa
Registration number 1947/024583/06
Share code: ATN
(ISIN: ZAE000029658)
Share code: ATNP
(ISIN: ZAE000029669)
(`Altron`)
ACQUISITION OF PREFERENCE SHARE AND PARTICIPATION LOAN BY BTG SUBSIDIARY
Introduction
Shareholders are advised that Bytes Corporate Services (Pty) Ltd (`BCS`), a
subsidiary of BTG has entered into a Sale and Transfer Agreement (`the
Agreement`) with Altron Finance (Pty) Ltd (`Altron Finance`), a subsidiary of
Allied Electronics Corporation Limited (`Altron`). In terms of the Agreement,
BCS has acquired the Preference Share held by Altron Finance in Technologies
Acceptances Receivables (Pty) Ltd (`TAR`), from Altron Finance as well as the
Participation Loan and Participation Loan Facility (`the Loan`) provided to TAR
by Altron Finance in terms of the Participation Loan Agreement concluded between
TAR and Altron Finance as the Original Participation Loan Provider.
The acquisition
Rationale
TAR is the primary asset financing vehicle which offers and provides, if
required, financing to customers who purchase product from various operations
within BTG. It is considered to be in the best interests of BTG`s operations
that a closer association and indeed investment by the group in TAR will provide
enhanced opportunities to secure new business. Simultaneously such an
investment will facilitate improved customer retention by various operations
within the group and reduce the risk of loss of business to competitors when
financed transactions reach the end of their agreed term.
Terms of the acquisition
BCS has purchased from Altron Finance the Preference Share held by the latter in
TAR for an agreed value of R19,231 million with effect from 1 March 2005 (`the
effective date`). BCS has also acquired from Altron Finance the Loan provided to
TAR at its book value as at the effective date, which book value was R24,359
million (`collectively referred to as `the transaction`). In terms of the
transaction, and with from the effective date, BCS has agreed to take over all
rights and to assume all liabilities and obligations of Altron Finance in terms
of the Preference Share Agreement and the Participation Loan Agreement
respectively.
Conditions precedent
As required by the Participation Loan Agreement, the transaction was subject to
the written consent of the primary lender to TAR, namely Standard Bank, which
consent was obtained on 14 March 2005.
Funding for the acquisition
The total consideration of R43,590 million due in terms of the transaction was
paid by BCS to Altron Finance on 15 April 2005 in cash, free of exchange or set-
off together with interest calculated thereon from the effective date to date of
payment at the rate of 9.6% per annum.
Related party and voting
In terms of the JSE Securities Exchange South Africa (`JSE`) Listings
Requirements, the acquisition of the Preference Share and the Loan are
classified as a small related party transaction. Accordingly, BTG has provided
the JSE with a written confirmation from an independent professional expert
stating that the terms of the proposed transaction with the related party are
fair and reasonable as far as the shareholders of BTG are concerned. The fair
and reasonable opinion statement will lie for inspection at BTG`s registered
office for a period of 28 days from the date of this announcement.
Financial effects of the transaction
The pro forma financial effects of this transaction, which are based on BTG`s
last published financial results, being those for the 6 month interim reporting
period ended 31 August 2004 and on its consolidated balance sheet as at that
date, are as follows:
Before the After the Change
transaction transaction
(cents per (cents per
share) share)
Basic earnings (54.47) (54.21) 0.5%
Headline earnings 36.77 37.03 0.7%
Net asset value 229.38 229.64 0.1%
Net tangible asset value 57.00 57.26 0.5%
The financial effects have been calculated on the following assumptions:
The financial information `before the transaction` has been extracted without
adjustment from the reviewed results of BTG for the 6 months ended 31 August
2004.
The effects of the transaction have been calculated on the assumption that the
transaction had become effective and was implemented on 1 March 2004.
Earnings have been adjusted to include the profit of TAR which would have been
attributable to BTG for the 6 month period ended 31 August 2004, net of interest
which would have been earned, at a rate of 6.75%, on the investment of R43,590
million, adjusted for tax at the statutory rate.
Sandton
22 April 2005
JP Morgan Equities
Sponsor to BTG and Altron
Date: 22/04/2005 04:03:09 PM
Produced by the JSE SENS Department
