| Tue 30 Aug 2005, 8:40 | | Black Economic Empowerment In The Group |
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Onelogix Group Limited - Broad Based Black Economic Empowerment In The Group And
Appointment Of Directors
ONELOGIX GROUP LIMITED
(Registration number 1998/004519/06)
Share code: OLG
ISIN: ZAE000026399
(`OneLogix Group` or `the group`)
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on the
ALTX. Shareholders are advised that the JSE does not guarantee the viability or
the success of a company listed on the ALTX. In terms of the JSE Listings
Requirements a designated advisor has to be retained by the company. The
designated advisor is required to, inter alia, attend all board meetings held by
the company to ensure that all JSE Listings Requirements and applicable
regulations are complied with, approve the financial director of the company and
guide the company in a competent, professional and impartial manner. If the
company fails to retain a designated advisor it must make arrangements to
appoint a new designated advisor within 10 business days, failing which the
company faces suspension of trading of its securities. If a designated advisor
is not appointed within 30 days of its suspension the company faces the
termination of its listing without an offer to minority shareholders.
BROAD BASED BLACK ECONOMIC EMPOWERMENT IN THE GROUP AND APPOINTMENT OF DIRECTORS
Introduction
Onelogix Group has reached agreement with Izingwe Capital (Proprietary) Limited
regarding proposals to advance broad based black economic empowerment and
transformation within the group. Subject to conditions referred to below,
OneLogix Group proposes to facilitate the acquisition of 25% of the group`s
wholly owned operating subsidiary, OneLogix (Proprietary) Limited (`OneLogix`),
by a consortium led by Izingwe Capital and including black employees of the
group.
The acquisition has been structured to vest in the consortium from the outset
the full economic benefit of and voting rights in respect of 25% of the issued
shares of OneLogix, on an unencumbered basis. The consortium has undertaken to
retain its shareholding for an extended period. Ultimately, the consortium`s
shareholding in OneLogix will convert into listed shares in OneLogix Group.
The consortium
Izingwe, a black-owned investment company will hold 20% of the issued shares in
Onelogix, be represented on the boards of OneLogix Group and OneLogix,
participate in aspects of the operations and in the business development of the
group in South Africa and elsewhere in Africa and lead the group`s
transformation program.
In addition, Izingwe will hold 5% of the issued shares in Onelogix in a trust
for the benefit of black employees of the group. All black employees and
particularly the group`s long-serving drivers and mechanics will hold vested
interests in the trust, subject to remaining in the employ of the group for an
extended period.
The structure of the acquisition
OneLogix Group has a claim on loan account against OneLogix in an amount of some
R65 million, which OneLogix will settle by the issue of cumulative redeemable
preference shares at a variable rate equal to 71% of 200 basis points above
prime.
Izingwe and the trust will subscribe at par for so many shares in OneLogix as,
after the subscription, constitute 20% and 5% respectively of the issued shares
of OneLogix. In addition, Izingwe will subscribe at par for one `A` ordinary
share in OneLogix, with the result that the consortium will hold more than 25%
of all voting rights and 25% of the economic benefit of ordinary shares in
Onelogix.
No later than the 8th anniversary of implementation of the acquisition, the
OneLogix shares held by Izingwe and the trust will convert into listed shares in
Onelogix Group based on relative fair values of OneLogix Group and OneLogix at
the date of conversion. Following the conversion, Onelogix Group will again
beneficially own 100% of OneLogix.
Pro Forma Financial Effects
The pro-forma financial effects of the acquisition set out in the table below
have been prepared for illustrative purposes only to show how the acquisition
may have affected the group`s published results for the year ended 31 May 2005
(`the year end results`). Because of their nature the pro-forma financial
effects will not clearly reflect Onelogix Group`s financial position after the
acquisition. PricewaterhouseCoopers Inc. will report on the financial effects in
the circular to shareholders.
Year end Pro-forma Percentage
results before year end change (%)
the results
acquisition after the
(cents) acquisition
Note 1 (cents)
Note 2
Headline earnings 6.7 5.8 (13.8)
per share
Earnings per 6.7 5.8 (13.8)
share
Note 1 The `year end results before the acquisition` column reflects Onelogix
Group`s earnings per share and headline earnings per share as published in the
year end results.
Note 2 The `pro-forma year end results after the acquisition` column reflects
the effects of the acquisition on the earnings per share and headline earnings
per share based on the following assumptions:
- the acquisition was effective 1 June 2004;
- a total dividend of R5.8 million would have been declared and paid by
Onelogix
- to Onelogix Group for the financial year ended 31 May 2005;
outside shareholders` profit attributable to the BEE consortium of an amount of
R1.8 million.
Note 3 The effect on net asset value per share and net tangible asset value
per share are not material and have therefore not been disclosed.
Accounting treatment of the acquisition
In accordance with the rules of the JSE Limited (`JSE`), the underlying
accounting treatment is in accordance with the accounting policies set out in
the last published audited financial information. In presenting the impact for
OneLogix Group, information is to be presented in accordance with SA GAAP as it
existed as at 31 May 2005. OneLogix Group has not yet adopted International
Financial Reporting Standards.
Conditions and circular to shareholders
The acquisition is conditional on JSE and the requisite shareholder approvals. A
circular including notice of a general meeting will be mailed to shareholders in
due course.
Appointments to the board of Onelogix Group
On implementation of the acquisition, Sipho Pityana will be appointed non-
executive chairman and Tsakani Matshazi a non-executive director of OneLogix
Group. Sipho is the executive chairman of Izingwe, has held positions including
Director General of the Departments of Labour and Foreign Affairs and Managing
Director of Nedbank Strategic Business Development, and is currently Deputy
Chair of Aberdare Cables, a director of HSRC and on the board of Bytes
Technologies. Tsakani, a chartered accountant, is the financial director of
Izingwe, having completed articles at PricewaterhouseCoopers Inc. before working
in private equity at Worldwide Capital and as manager of a business unit within
the Eastern Cape Development Corporation.
Kempton Park
30 August 2005
CORPORATE ADVISOR, LEGAL ADVISOR AND DESIGNATED ADVISOR
Java Capital (Proprietary) Limited
REPORTING ACCOUNTANTS
PricewaterhouseCoopers Inc.
Date: 30/08/2005 07:06:08 AM
Produced by the JSE SENS Department
