| Fri 17 Jun 2005, 14:35 | | TRANSFER OF INVESTMENT IN REDUCTION OF LOAN |
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Zeltis Holdings Limited - Zeltis - Transfer Of Investment In Reduction Of Loan
Amount Owing And Cautionary
ZELTIS HOLDINGS LIMITED
(Registration No:1905/0021141/06)
(`Zeltis` or `the company`)
JSE CODE: ZLT - ISIN CODE: ZAE000037297
TRANSFER OF INVESTMENT IN REDUCTION OF LOAN AMOUNT OWING AND CAUTIONARY
Imara Corporate Finance South Africa (Pty) Limited is authorised to announce
that Zeltis Holdings Limited Group (`Zeltis`) has concluded a transaction
whereby it has transferred an investment to a loan creditor in partial
settlement of the amount owing to that creditor.
Details of Transaction
Cromarty Enterprises SA (`Cromarty`), a company registered in Switzerland, has
advanced Zeltis Management Services (Proprietary) Limited, a wholly owned
subsidiary of Zeltis, two loans as follows:
- Loan One of R 4 million, which is subject to interest at prime plus 0.5% per
annum. The interest is payable quarterly in arrears and capital was due to be re
paid by June 2001. Cromarty had extended this date to February 2004. The balance
outstanding at 24 January 2005 amounted to R5, 127,847.76.
- Loan Two of R 2 million, which is subject to interest at prime plus 1.0% per
annum. The interest is payable quarterly in arrears and capital was due to be re
paid by March 2002. Cromarty had extended this date to February 2004. The
balance outstanding at 24 January 2005 amounted to R2 539 948.95
At 31 December 2004, Zeltis owned 10 348 540 shares in Kairos Industrial
Holdings Limited (`Kairos`) with a book value of R3 415 018, the equivalent of
33 cents per share. The Kairos shares traded at 36 cents per share on 31 January
2005 and at 29 cents on 9 June 2005.
Zeltis entered into an agreement with Cromarty with effect from 24 January 2005
in terms of which Zeltis transferred the 10,200,000 Kairos shares to Cromarty at
a price of 33 cents per share in exchange for a reduction in the loans as
follows:
- Loan One was reduced by R826 051.05 (being 2,503 185 shares at 33 cents per
share) to R4,301,796.70 at 24 January 2005; and
- Loan two was reduce by R 2 539 948.95 (being 7 696 815 shares at 33 cents per
share) to R Nil at 24 January 2005.
Zeltis has a call option on the Kairos shares at any time until close of
business on 9 December 2005, to buy back the shares at 33 cents per share plus
interest at prime plus 0.75% from 24 January 2005 to the date the call is
exercised, both dates inclusive. This buy back will be effected by crediting
Cromarty with R 3,366,000 plus interest at prime plus 0.75% from 24 January 2005
to the date the call is exercised, both dates inclusive.
Should the share price of Kairos rise above 33 cents per share before the option
expires, the directors will consider making use of the option to further reduce
the amount owing to Cromarty.
Rationale for the Transaction
The transfer of the asset to a loan creditor enabled Zeltis to reduce the
capital amount of the loan owing to a creditor that was not receiving either
interest payments or capital redemptions.
The same proposal was also offered to other major creditors of Zeltis, but the
offer was declined.
Financial Effects of the Transaction
The financial effects of the above transaction are to reduce the long-term
interest bearing debt in the Zeltis group by an amount of R 3 366 000, and to
reduce interest costs to the group by an amount of R 382 959.73 per annum at
current rates of interest.
On the assumption that the transfer of the asset to the loan creditor was
effected at the beginning of the six month period ended 31 December 2004, the
financial effects on each of the 82 044 120 shares in issue would have been the
following:
Before the After the Change
transaction transaction %
Loss per share (cents) (1,1) (0,6) (42.7)
Headline loss per
share (cents) (4,1) (3,6) (11.5 )
Net asset value per
share (cents) (11,2) (10,7) (4.2)
Net tangible asset
value per share
(cents) (16,9) (16,4) (2.8)
Action Required by Shareholders
The full details of the transaction will be contained as part of the next Annual
Financial Statements of Zeltis, which will contain a resolution for shareholders
of Zeltis to ratify the transaction. Shareholders representing in excess of 51%
of the shares have given written irrevocable undertakings to vote in favour of
the resolutions required to implement the transaction.
Cautionary Announcement
Shareholders are advised to exercise caution in the dealing of their shares
until the resolution of shareholders ratifying the transaction has been passed
Sponsor:
Imara Corporate Finance South Africa (Pty) Ltd
17 June 2005
Date: 17/06/2005 02:33:58 PM
Produced by the JSE SENS Department
