| Wed 6 Jul 2005, 17:26 | | Announcement |
|
Invicta - Announcement
Invicta Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1966/002182/06)
(Share code: IVT & ISIN: ZAE000029773)
(`Invicta`)
ANNOUNCEMENT REGARDING:
- The internal restructuring and consolidation of the Invicta group into
wholly-owned subsidiaries of Humulani Investments (Proprietary) Limited
(`Humulani`), a wholly-owned subsidiary of Invicta;
- the subsequent issue to (a) BEE party/ies, of:
- 25% of the ordinary shares in Humulani;
- one preference share in the share capital of Humulani,
- which BEE party/ies may, at the discretion of the Invicta board,
include the BEE staff share incentive scheme (`BEE transaction`); and
- the future allocation of Invicta shares to debenture holders under the
existing Bearing Man Limited debenture scheme,
(collectively `the transactions`)
1. Introduction
Historically, the Invicta group included a listed subsidiary, being Bearing Man
Limited (`Bearing Man`), in which Invicta held 60.65% of the ordinary shares.
This structure resulted in inefficiencies with regard to the operations of the
two businesses. In addition, the Invicta group has not to date, effected a
transaction with a BEE party in respect of the empowerment of an equity interest
in the Invicta group.
The Invicta board is of the opinion that the restructuring and subsequent
empowerment of the Invicta group is key to ensuring the continued sustainability
of the group and stimulating the future growth of its business operations in
South Africa.
The Invicta board therefore proposed a buy-out of the minorities in Bearing Man
as set out in the circular to Invicta shareholders dated 3 June 2005, which buy-
out was approved by Invicta shareholders at the general meeting held on 20 June
2005. Subsequent to such buy-out being implemented, the Invicta board proposes
that the operations of the Invicta group should be restructured and that a BEE
transaction should be implemented in respect of such restructured operations.
Such sales will be effected as sales of going concerns in terms of section 228
of the Companies Act, 1973 (Act 61 of 1973), as amended, at the collective
market value of the businesses, which value will be determined with reference to
the higher of Invicta`s volume weighted average price over the 30 trading days
prior to the date of signature of the agreements pertaining to the restructuring
or the value of Invicta at R17,00 per Invicta share, as offered to the Bearing
Man minority shareholders in terms of the share offer. The proceeds of such
sales will be invested by Invicta and Bearing Man for the benefit of Invicta
shareholders;
The approval by the requisite majority of Invicta shareholders in general
meeting is required for:
- the issue of shares in the restructured group to the BEE party/ies, which
BEE part/ies may include a share incentive trust to be established in
future, for the benefit of BEE employees of the Invicta group; and
- the issue of Invicta shares to debenture holders under the Bearing Man
debenture scheme.
2. Rationale
The rationale of the transactions is to:
- restructure the Invicta group in a manner which unlocks efficiencies that
are not optimised in the current structure and which facilitates the
implementation of a BEE transaction;
- introduce (a) BEE party/ies to such restructured group, so as to ensure the
continued sustainability of the group and stimulate the future growth of
its business operations in South Africa; and
- allow the Bearing Man debenture holders to convert their debentures into
Invicta shares.
3. Conditions precedent
The transactions are subject to the approval by the requisite majority of
Invicta shareholders in general meeting.
4. Pro forma financial information
In terms of the offer to Bearing Man minorities as set out in the circular to
Bearing Man shareholders dated 3 June 2005, it is still uncertain as to what the
elections would be in terms of cash and/or shares. Accordingly, the pro forma
financial effects of the BEE transaction have been prepared taking both
scenarios into consideration.
4.1 Pro forma financial effects of the cash offer and the BEE transaction
The unaudited pro forma financial effects of the cash offer and the BEE
transaction on the earnings, headline earnings, net asset value and net tangible
asset value per Invicta share, before and after the transactions, are set out
below. The unaudited pro forma financial information provided is the
responsibility of the directors. The unaudited pro forma financial information
has been prepared for illustrative purposes only and because of its nature, may
not fairly reflect the financial position of Invicta or results of its
operations after the transactions.
After the
offer to
Bearing After the
Man BEE
Before minorities Change transaction Change
Notes (cents) (cents) (%) (cents) (%)
Earnings per
share 1 190 202 6,32 181 (4,74)
Headline
earnings per
share 1 179 191 6,70 170 (5,03)
Net asset value
per share
2 613 612 (0,16) 611 (0,33)
Net tangible
asset value per
share 2 561 250 (55,44) 249 (55,61)
Notes
1. The amounts in the `Before` column are based on the earnings and headline
earnings per Invicta share as reported in the audited financial results of
Invicta for the twelve months ended 31 March 2005. The amounts in the `After the
offer to Bearing Man minorities` column represent the headline earnings and
earnings that would have accrued per Invicta share for the twelve months ended
31 March 2005. This is based on the assumption that the cash offer to Bearing
Man minorities was effective 1 April 2004.
The amounts in the `After the BEE transaction` column represent the headline
earnings and earnings that would have accrued per Invicta share for the twelve
months ended 31 March 2005. This is based on the assumption that the BEE
transaction was effective 1 April 2004;
2. The amounts in the `Before` column are based on the net asset value per share
and net tangible asset value per share as reported in the audited financial
results of Invicta for the twelve months ended 31 March 2005. The amounts in the
`After the offer to Bearing Man minorities` column represent the net asset value
per share and tangible net asset value per share based on assumption that the
cash offer to Bearing Man minorities was effective 31 March 2005.
The amounts in the `After the BEE transaction` column represent the net asset
value per share and tangible net asset value per share based on assumption that
the BEE transaction was effective 31 March 2005; and
3. Transactional costs of R540 000 have been taken into account in both the
`After the offer to Bearing Man minorities` and `After the BEE transaction`
columns.
4.2 Pro forma financial effects of the share offer and the BEE transaction
The unaudited pro forma financial effects of the share offer and the BEE
transaction on the earnings, headline earnings, net asset value and net tangible
asset value per Invicta share, before and after the transactions, are set out
below. The unaudited pro forma financial information provided is the
responsibility of the directors. The unaudited pro forma financial information
has been prepared for illustrative purposes only and because of its nature, may
not fairly reflect the financial position of Invicta or results of its
operations after the transactions.
After the
offer to
Bearing Man After the
minorities BEE
Before (cents) Change transaction Change
Notes (cents) (%) (cents) (%)
Earnings per
share 1 190 198 4,21 186 (2,11)
Headline
earnings per
share 1 179 190 6,15 178 (0,56)
Net asset value
per share 2 613 868 41,59 867 41,44
Net tangible
asset value per
share 2 561 632 12,65 631 12,48
Notes
1. The amounts in the `Before` column are based on the earnings and headline
earnings per Invicta share as reported in the audited financial results of
Invicta for the twelve months ended 31 March 2005. The amounts in the `After the
offer to Bearing Man minorities` column represent the headline earnings and
earnings that would have accrued per Invicta share for the twelve months ended
31 March 2005. This is based on the assumption that the share offer to Bearing
Man minorities was effective 1 April 2004.
The amounts in the `After the BEE transaction` column represent the headline
earnings and earnings that would have accrued per Invicta share for the twelve
months ended 31 March 2005. This is based on the assumption that the BEE
transaction was effective 1 April 2004;
2. The amounts in the `Before` column are based on the net asset value per share
and net tangible asset value per share as reported in the audited financial
results of Invicta for the twelve months ended 31 March 2005. The amounts in the
`After the offer to Bearing Man minorities` column represent the net asset value
per share and tangible net asset value per share based on assumption that the
share offer to Bearing Man minorities was effective 31 March 2005.
The amounts in the `After the BEE transaction` column represent the net asset
value per share and tangible net asset value per share based on assumption that
the BEE transaction was effective 31 March 2005; and
3. Transactional costs of R540 000 have been taken into account in both the
`After the offer to Bearing Man minorities` and `After the BEE transaction`
columns.
5. Opinions and recommendations in terms of Invicta
5.1 The Board of directors of Invicta, having evaluated the rationale for and
the terms and conditions of the transactions, is of the opinion that the
transaction will enhance shareholder value and recommends that Invicta
shareholders vote in favour of the ordinary resolutions necessary to approve the
transactions, which resolutions will be proposed at the general meeting to be
held on 25 July 2005.
5.2 The directors of Invicta, holding directly and indirectly 39 544 970 Invicta
shares (representing approximately 60,58% of the total issued share capital of
Invicta), intend to vote in favour of the ordinary resolutions necessary to
approve the transactions, which resolutions will be proposed at the general
meeting.
6. Salient dates and times
The salient dates and times will be as follows:
2005
Last day to submit forms of proxy in respect of the
general meeting, by 11h30 on Thursday, 21 July
General meeting at 11h30 or immediately after the
conclusion of the annual general meeting, whichever
is the later on Monday, 25 July
Results of the general meeting released on SENS on Monday, 25 July
Results of the general meeting published in the press
on Tuesday, 26 July
Notes
1. The above dates and times are subject to amendment. Any such amendment will
be published on SENS and in the press.
2. If you are an Invicta shareholder and have dematerialised your shares with a
CSDP or broker, other than with own name registration, you must arrange with
them to provide you with the necessary authorisation to attend the general
meeting or you must instruct them as to how you wish to vote in this regard.
This must be done in terms of the agreement entered into between you and the
CSDP or broker in the manner and cut-off time stipulated by the CSDP or broker.
7. Circular to shareholders
A circular, containing details of the transactions and including a notice of
general meeting for Invicta shareholders, will be posted to Invicta shareholders
on or about Thursday, 7 July 2005.
Cape Town
7 July 2005
Corporate Adviser to Invicta
Bravura
Sponsor to Invicta
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Reporting accountants
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
(Registration number: 2004/003647107)
