| Tue 6 Dec 2005, 17:47 | | Frontrange Limited - Announcement Regarding The Fi |
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Frontrange Limited - Announcement Regarding The Final Terms And Salient
Information Relating To The Proposed Disposal Of The Underlying Assets Of
Frontrange To Ferrari Holding, Inc.
FrontRange Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/009928/06)
Share code: FRO ISIN: ZAE000035325
(`the company" or "FrontRange")
Announcement regarding the final terms and salient information relating to the
proposed disposal of the underlying assets of FrontRange to Ferrari Holding,
Inc.
Ernst & Young Sponsors (Proprietary) Limited is authorised to announce that
further to the detailed cautionary announcement published on SENS on 4 November
2005 the circular, including a notice convening a general meeting of
shareholders (see below), was issued to FrontRange shareholders on 5 December
2005 and such shareholders are accordingly advised to refer to and acquaint
themselves with the contents of that circular, which is also available on the
company"s website: www.frontrange.com.
Given the objective of timeously publishing the aforementioned announcement it
was not practicable as at 4 November 2005 to outline all the material financial
information which might ordinarily have been included in a definitive terms
announcement. On that basis we set out below the remaining salient information
regarding the definitive disposal agreement ("the disposal agreement") and the
first Addendum thereto, in terms of which FrontRange will dispose or procure the
disposal of its three underlying core business subsidiaries, namely the entire
issued share capital of FrontRange Solutions, Inc. ("FRSI"), as well as the
entire outstanding capital stock of Cayo Communications, Inc. and FrontRange
Solutions South Africa (Pty) Ltd ("the disposed assets" or "the disposal").
General meeting
The general meeting of FrontRange shareholders has been convened to be held at
11:00 on Wednesday, 21 December 2005 at the company"s registered address: Ground
Floor, 1 Albury Park, Albury Road, Dunkeld West, Johannesburg, in order to
consider and if deemed fit, to pass with or without modification, the ordinary
resolutions necessary to implement, inter alia, the disposal.
Irrevocable undertakings
FrontRange has received a number of irrevocable undertakings in addition to
those described in the aforesaid circular. In aggregate 17 FrontRange
shareholders, holding a total of 102,909,425 shares, or some 64,1% of shares
eligible to vote at the general meeting have to date indicated that they will
vote in favour of the disposal and the subsequent distribution. These
undertakings include those received from FrontRange"s directors, who will, where
relevant be voting their shares in favour of the resolutions to be tabled at the
general meeting. Given that all of the resolutions to be presented to the
general meeting are ordinary resolutions, which in terms of the Companies Act
are only required to be passed by a simple majority of shareholders, the passing
of such resolutions is assured.
Financial effects
The pro forma financial effects set out in the table below have
been extracted form the circular posted to shareholders and they
have been prepared for the purpose of illustrating the effect of
the disposal on FrontRange shareholders, assuming that the
disposal had been concluded for income statement purposes for the
entire ten month period from 1 July 2004 to 30 April 2005 and for
balance sheet purposes at 30 April 2005 (as FrontRange changed
its financial year end from June to April in 2004). The financial
effects are prepared for illustrative purposes only and owing to
their nature, may not fairly present FrontRange"s financial
position, changes in equity, results of operations or cash flows.
The pro forma financial effects must be read in conjunction with
the pro forma financial information, including the consolidated
balance sheets and income statements of FrontRange, which are
contained in Annexure 1 to the circular:
Before After Percenta
the the ge
disposal disposal Change
US US US
Cen cen Cen cen Cen cen
ts ts ts ts ts ts
Not per per per per per per
es sha sha sha sha sha sha
re re re re re re
Market value per share and 1 575 86. 554 84. -4% -2%
cash received .0 9 .2 7
30-day volume weighted
average market value per 2 570 86. 554 84. -3% -2%
share and cash received .0 4 .2 7
Weighted average earnings per 3 25. 4.3 16. 2.5 - -
share 9 6 36% 41%
Weighted averaged headline 3 25. 4.3 16. 2.5 - -
earnings per share 7 6 35% 41%
Net asset value per share and 4 102 16. 554 84. 443 407
cash received .0 7 .2 7 % %
Net tangible asset value per 4 43. 7.1 554 84. 117 109
share and cash received 4 .2 7 7% 3%
1. The "Before the disposal" column reflects the closing JSE
market price per share on Thursday, 3 November 2005, being the
day immediately preceding publication of the detailed cautionary
announcement (at the exchange rate ruling on that date). The
"After the disposal" column shows the disposal consideration
expected to be received per FrontRange share (at an assumed rate
of R6.54 per US Dollar, the exchange rate ruling on the last
practicable date).
2. The "Before the disposal" column reflects the 30-day volume
weighted average JSE market price per FrontRange share calculated
for the 30 calendar days preceding Thursday, 3 November 2005,
being the day of publication of the detailed cautionary
announcement. The "After the disposal" column shows the disposal
consideration expected to be received per FrontRange share (at an
assumed rate of R6.54 per US Dollar, the exchange rate ruling on
the last practicable date).
3. The "Before the disposal" column reflects the audited
earnings and headline earnings per FrontRange share for the ten
month financial period ended 30 April 2005. The "After the
disposal" column shows the after-tax interest income that a
FrontRange shareholder would have earned had the disposal
consideration (to be received per share) been invested at a fixed
deposit interest rate of 6.00% per annum on 1 July 2004 for a
period of ten months and assuming a marginal tax rate of 40%.
4. The "Before the disposal" column reflects the audited net
asset value and net tangible asset value per FrontRange share at
30 April 2005. The "After the disposal" column shows the disposal
consideration to be received per FrontRange share (at an assumed
rate of R6.54 per US Dollar, the exchange rate ruling on the last
practicable date).
5. The possible application of CGT has not been taken into
account in the calculations above.
Currency Exposure
In terms of the rules of the South African Reserve Bank, entities are not
allowed to hedge currency exposures until they have a "fixed and ascertainable
commitment". Accordingly, FrontRange has not been able to hedge the transaction
to date. However, now that the South African Reserve Bank has approved the
proposed disposal and FrontRange has received the irrevocable undertakings
detailed above, it should be able to hedge the majority of the dollar/ rand
exposure in order to lock in the eventual rate that the dollars will be
converted into rands.
The rand is currently trading stronger than the R6.54 per US Dollar amount
indicated in the above financial effects. A stronger rand will have the effect
of reducing the Rands per share that will be distributed. Shareholders should
note that the distribution shall be equal to the aggregate of US$0,93 (less STC)
which equates to approximately R5.54 (based on the Rand/US Dollar exchange rate
of R6.54 to US$1 being the rate at the last practicable date) in respect of each
share in issue. The final amount to be paid in South African Rand will be
advised on or before the record date.
Salient Dates
2005
Following hereafter is an extract of the
circular to shareholders which outlines the
salient dates of important processes relating
to the disposal as well as and times of
various key actions required in terms of the
circular to shareholders of FrontRange:
Last day for FrontRange shareholders to lodge Tuesday, 20
forms of proxy for the general meeting, by December
11:00 on
General meeting to be held at 11:00 on Wednesday, 21
December
Results of the general meeting expected to be Wednesday, 21
published on SENS on December
Results of the general meeting expected to be Thursday, 22
published in the press on December
Expected last day to trade for shareholders Thursday, 29
to receive distribution December
2006
Expected date of suspension of shares by the Friday, 30
JSE December
Expected date of announcement of final Friday, 6 January
distribution amount on or before
Expected record date for shares to appear in Friday, 6 January
the register for distribution on
Expected date of distribution to shareholders Monday, 9 January
Expected termination of listing, at Tuesday, 10
commencement of trade on January
Notes:
These dates and times are subject to amendment. Any such amendment will be
published on SENS and in the press.
Share certificates may not be dematerialised or rematerialised after Thursday,
29 December 2005.
Johannesburg
6 December 2005
Transactional sponsor and corporate advisor
Ernst & Young Sponsors (Pty) Ltd
Sponsor
Nedbank Capital
Legal advisors/Attorneys
Webber Wentzel Bowens
Date: 06/12/2005 05:47:20 PM Produced by the JSE SENS Department
