| Thu 2 Jun 2005, 18:00 | | NAIL - Announcement to NAIL shareholders and renew |
|
NAIL - Announcement to NAIL shareholders and renewal of cautionary annoucement
New Africa Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
Share code: NAI and NAN
ISIN: ZAE0000033338 and ZAE0000033346
(`NAIL`)
ANNOUNCEMENT TO NEW AFRICA INVESTMENTS LIMITED SHAREHOLDERS AND RENEWAL OF
CAUTIONARY ANNOUCEMENT
1. INTRODUCTION AND RATIONALE
NAIL hereby announces that it has entered into an agreement dated 1 June
2005 with, inter alia, Unitrans Motors (Pty) Ltd (`Unitrans`) to dispose,
subject to the fulfilment of the conditions precedent set out in paragraph
2.3 below (`the conditions precedent`), of its entire interest in the
ordinary shares and preference shares in Alisa Holdings (Pty) Ltd (`Hertz`)
to Unitrans (`the Hertz disposal`). Unitrans, a wholly owned subsidiary of
Unitrans Limited, currently owns 40% of the issued ordinary shares in
Hertz.
NAIL`s current strategy is to dispose of its underlying assets and to
return excess cash to NAIL shareholders. The proceeds of the Hertz disposal
will form part of this process of returning cash to NAIL shareholders.
2. THE HERTZ DISPOSAL
2.1 Details of the Hertz disposal
NAIL will, subject to the fulfilment of the conditions precedent, dispose
of:
2.1.1 4 980 ordinary shares held in Hertz constituting 60% of the
issued ordinary share capital of Hertz;
2.1.2 50 000 `A` class non-convertible redeemable preference shares
held in Hertz constituting 100% of the issued `A` class
preference share capital of Hertz;
2.1.3 150 000 `B` class non-convertible redeemable preference shares
held in Hertz constituting 100% of the issued `B` class
preference share capital of Hertz;
2.1.4 200 000 `C` class non-convertible redeemable preference shares
held in Hertz constituting 100% of the issued `C` class
preference share capital of Hertz, and
2.1.5 all claims, if any, which NAIL may have against Hertz
to Unitrans with effect from the effective date, being 3 business
days following the date of the fulfilment of the last of the
conditions precedent.
2.2 Disposal consideration
The total amount payable to NAIL by Unitrans in terms of the Hertz
disposal is R42.50 million in cash (`the disposal consideration`).
2.3 Conditions precedent
The Hertz disposal is subject to the fulfilment of the following
conditions precedent:
2.3.1 to the extent required, the approval by the competition
authorities of the Hertz disposal on terms reasonably
acceptable to NAIL and Unitrans;
2.3.2 the shareholders of NAIL approving the implementation of the
Hertz disposal; and
2.3.3 the approval by Hertz International of the transfer of the
franchise to Unitrans.
2.4 Nature of business of Hertz
Hertz has the exclusive rights to the Hertz Master Franchise and
operates in South Africa and Namibia. Hertz consists mainly of the
Hertz Rent A Car business.
2.5 Financial effects
The table below sets out the financial effects of the Hertz disposal
based on the published provisional results of NAIL for the year ended
31 December 2004:
Per NAIL share Notes Before After Change
(cents) (cents) (%)
Earnings 1 82.3 84.5 2.7%
Headline earnings 1 28.7 31.6 10.1%
Net asset value 2 151.2 150.7 (0.3%)
Net tangible asset 2 151.2 150.7 (0.3%)
value
Notes:
1. The `Before` column reflects the earnings and headline earnings per
NAIL share for the year ended 31 December 2004 calculated on the basis
of a weighted average number of 126.76 million shares in issue
throughout the period.
The `After` column:
- assumes that the Hertz disposal was implemented on 1 January 2004
and reflects the after tax earnings of R104.37 million, taking
into account the earnings which would have been earned had an
amount equivalent to the disposal consideration been invested by
NAIL at an after tax interest rate of 4.5% per annum for the year
ended 31 December 2004 in lieu of the consolidated after tax
earnings of Hertz for the year ended 31 December 2004;
- takes into account transaction costs relating to the Hertz
disposal, payable by NAIL, estimated at R 0.70 million; and
- assumes the loss of the Hertz disposal amounts to R 26.25
million.
2. The `Before` column reflects the net asset value and net tangible
asset value per NAIL share at 31 December 2004 calculated on the basis
of 126.76 million shares in issue at 31 December 2004. The `After`
column assumes that the Hertz disposal was implemented on 31 December
2004 and reflects the disposal consideration in lieu of the
consolidated net asset value and net tangible asset value of Hertz at
31 December 2004.
3. The net tangible asset value of Hertz at 31 December 2004 was R84.70
million.
3. CIRCULAR TO NAIL SHAREHOLDERS
A circular, setting out the full details of the Hertz disposal and
convening a general meeting of NAIL shareholders to consider and, if deemed
fit, pass the resolution necessary to implement the Hertz disposal, will be
posted to NAIL shareholders in due course.
4. RENEWAL OF CAUTIONARY ANNOUNCEMENT
NAIL shareholders are referred to the announcement made by NAIL dated 17
December 2004 and the cautionary announcements dated 31 January 2005 and 12
April 2005, wherein NAIL shareholders were advised that it had received a
firm intention to make an offer from Primedia Limited, subject to the
fulfilment of certain conditions precedent, to acquire all of the issued
shares in NAIL (`the Primedia offer`). One of these conditions precedent
was the disposal by NAIL of its entire interest in Hertz, therefore after
the implementation of the Hertz disposal, the only remaining condition
precedent to the Primedia offer will be the approval by and compliance with
the requirements of the relevant regulatory authorities.
NAIL shareholders are advised that they should continue to exercise caution
in dealing in their NAIL shares until a further announcement is made.
Bryanston
2 June 2005
Investment bank
Investec Corporate Finance
Investec Bank Limited
Sponsor
Investec Bank Limited
Corporate law advisers and consultants
Edward Nathan (Proprietary) Limited
Date: 02/06/2005 05:52:39 PM
Produced by the JSE SENS Department
