| Thu 29 Sep 2005, 16:29 | | Labat Africa Limited - Disposal Of Africard (Pty) |
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Labat Africa Limited - Disposal Of Africard (Pty) Ltd And Further Cautionary
Announcement
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
JSE Share code: LAB ISIN: ZAE000018354
("Labat")
DISPOSAL OF AFRICARD (PTY) LTD AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Brait Sponsors (Proprietary) Limited is authorised to announce that Labat has
concluded an agreement with Oberthur Card Systems S.A. ("Oberthur") on
Wednesday, 21 September 2005 to dispose of Africard (Pty) Ltd ("Africard")
subject to certain suspensive conditions (referred to 5 below), with effect from
the close of business on 31 July 2005 ("the Disposal").
2. AFRICARD
Africard is a licensed MasterCardRegistered and VisaRegistered security card
manufacturer. The company has been in operation for 15 years. Cards are
manufactured to strict ISO standards using imported raw materials. The process
includes printing on PVC, collation, lamination, die cutting (punching), and the
application of signature panels, magnetic stripes and holograms. Africard was
acquired from Allied Technologies Limited on 16 February 2004 ("the Africard
Acquisition").
3. RATIONALE FOR THE DISPOSAL
An international partner was required to bring the technology needed to grow
the Africard business and, because of the future capital demands of the business
which would require major infusions of cash or borrowings, it was decided that
it would better suit Labat to dispose of Africard at this time.
4. PURCHASE CONSIDERATION AND THE APPLICATION OF THE PROCEEDS BY LABAT
Oberthur will acquire the entire issued share capital and net shareholders"
loans of Africard for a purchase consideration of R20 million. Various
obligations, including loans relating to the Africard Acquisition and legal
settlements, will be discharged out of the sale proceeds and the balance, some
R12 million less a retention of R4.8 million, will be applied to the reduction
of Labat"s debt.
5. SUSPENSIVE CONDITIONS
5.1 The Disposal is subject to certain outstanding suspensive conditions, which
include:
5.1.1 the approval by the relevant regulatory authorities including, but not
limited to, the JSE Limited ("JSE"); and
5.1.2 the approval by a majority of Labat"s shareholders present and voting at a
general meeting.
5.2 Irrevocable undertakings have been obtained from Labat shareholders holding
in the aggregate 52,43% of Labat"s total issued share capital, to vote in favour
of the Disposal.
6. FINANCIAL EFFECTS
The unaudited pro forma financial effects of the Disposal on the earnings,
headline earnings, net asset value and net tangible asset value per share for
Labat, are set out below. The unaudited pro forma financial effects have been
prepared for illustrative purposes only and because of their nature, may not
fairly reflect the financial position of Labat after the Disposal or the results
of its operations going forward. The unaudited pro forma effects provided are
the responsibility of the board of directors of Labat.
Per Labat ordinary share Before the Disposal After the Disposal Change
(cents) (cents) (%)
Earnings (34,1) (31,6) 7,0
Headline earnings (19,3) (21,8) (12,9)
Net asset value/Net tangible asset value 37,9 42,3 14,0
Number of Labat shares (`000) 184 415 184 415 -
Notes:
1. The "Before the Disposal" column is based on the published results of Labat
for the year ended 28 February 2005.
2. The "After the Disposal" column reflects the financial effects after the
Disposal on Labat.
3. The earnings and headline earnings effects are calculated based on the
following assumptions:
- that the Disposal was effective on 1 March 2004.
- that costs of R300 000 before tax, as a result of the Disposal, will be borne
by Labat.
- that Capital Gains Taxation of R1.4 million will be borne by Labat, as result
of the gain realised on the Disposal.
4. The net asset value and net tangible asset value effects are calculated based
on the assumption that the Disposal was effective on 28 February 2005.
5. Interest on the Disposal proceeds have been accrued at an after-tax rate of
4%.
7. CIRCULAR AND NOTICE OF GENERAL MEETING
A circular relating to the Disposal and containing the notice convening the
general meeting of Labat shareholders, will be issued to Labat shareholders
within 28 days.
8. FURTHER CAUTIONARY ANNOUNCEMENT
Labat shareholders are advised that Labat is considering further transactions
unrelated to the Disposal which, if successfully concluded, may have a material
impact on the price at which Labat"s shares trade on the JSE and which may
further improve Labat"s current debt position and focus going forward. As a
result, Labat shareholders are advised to continue to exercise caution when
dealing in their Labat shares until a further announcement is made.
Johannesburg
29 September 2005
Sponsor to Labat
Brait Sponsors (Proprietary) Limited
(Registration number 2000/031069/07)
Legal advisor to Labat
STEIN SCOP ATTORNEYS
Legal advisor to Oberthur Card Systems S.A.
Brink Cohen Le Roux Inc
Attorneys
(Registration number 1993/004501/21)
Date: 29/09/2005 04:29:15 PM Produced by the JSE SENS Department
