| Thu 8 Dec 2005, 17:09 | | Peregrine Holdings Limited - Introduction Of A Bla |
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Peregrine Holdings Limited - Introduction Of A Black Economic Empowerment
Shareholding In Peregrine And Withdrawal Of Cautionary
Peregrine Holdings Limited
(Registration number 1994/006026/06)
JSE code: PGR ISIN code: ZAE000015152
("Peregrine" or "the company")
INTRODUCTION OF A BLACK ECONOMIC EMPOWERMENT SHAREHOLDING IN PEREGRINE AND
WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Further to the cautionary announcement dated 30 September 2005 and to the
commentary published on 2 November 2005 with the company"s interim results, the
company has conditionally entered into an agreement to give effect to a Broad-
Based Black Economic Empowerment ("BEE") transaction that will result in 29 750
000 Peregrine shares being owned by a BEE consortium led by Vunani Capital
(Proprietary) Limited.
2. THE BEE CONSORTIUM
2.1 Vunani Capital is part of Vunani Group (Proprietary) Limited, established
through the management buy-out of African Harvest Capital in 2004. The Vunani
Group, led by Ethan Dube, is black-owned and controlled and is active in BEE
structuring, corporate advisory services, private equity, capital raising,
stockbroking and property development.
2.2 The BEE consortium will also include Herman Mashaba"s Leswikeng Finance
(Proprietary) Limited, black staff within the Peregrine group, a women"s
grouping, community development organisations and an educational trust.
2.3 It is envisaged that up to three individuals representing the BEE consortium
will be appointed, as non executive directors, to the board of Peregrine.
3. TERMS OF THE PROPOSED BEE TRANSACTION
3.1 The proposed BEE transaction entails an acquisition of 24 065 224 shares
(the "scheme shares") from existing shareholders and a sale of 5 684 776
treasury shares (the "PGR shares") by a subsidiary of Peregrine.
3.2 The acquisition of the scheme shares from existing shareholders will be
pursuant to a scheme of arrangement (the "scheme") to be proposed by the BEE
consortium between Peregrine and its shareholders, excluding holders of treasury
shares and shares held by share trusts within the Peregrine group (collectively
referred to as "treasury shareholders"). In terms of the scheme, the scheme
shares will be acquired for a consideration of R5,20 per scheme share.
3.3 The acquisition of the PGR shares by the BEE consortium will be for a
consideration of R5,46 per PGR share. The sale of the PGR shares will be
conditional on the implementation of the scheme.
3.4 The -
3.4.1 PGR shares represent 2,95% of the total number of Peregrine shares in
issue as at the date hereof excluding shares held by the treasury shareholders,
being 192 521 791 shares (the "net shares in issue");
3.4.2 scheme shares represent 12,5% of the net shares in issue; and
3.4.3 PGR shares and the scheme shares collectively (being 29 750 000 shares)
represent 15,01% of the total number of Peregrine shares which will be in issue
following the sale of the PGR shares to the BEE consortium but excluding the
remaining shares then held by the treasury shareholders.
3.5 The purchase price for the PGR shares is to be paid by the BEE consortium to
Peregrine against transfer of the PGR shares, to be effected upon the fulfilment
of the conditions to the proposed BEE transaction, including the condition
referred to in paragraph 0 below.
3.6 The PGR shares and the scheme shares to be acquired by the BEE consortium
will be subject to restrictions on alienation and encumbrance for five years
after acquisition, whereafter Peregrine will have pre-emptive rights applicable
in favour of the company or its nominee in the event of any sale of such shares.
3.7 Under JSE Listings Requirements the proposed sale of the PGR shares is
treated as a specific issue of shares for cash and, if Peregrine ever exercises
its pre-emptive rights to buy-back the BEE consortium"s shares, the buy-back
would be a specific re-purchase. Accordingly, both require approval by ordinary
resolution to be passed by 75% of ordinary shareholders present or represented
by proxy at a general meeting. The necessary notice and resolutions will be
included in the circular referred to below.
4. SPECIAL DISTRIBUTION
4.1 Following and arising out of the profit from the sale to the BEE consortium
of the PGR shares but prior to the implementation of the sale by shareholders of
the scheme shares, Peregrine will declare a special distribution of R0,10 per
Peregrine share ("the distribution") to shareholders other than the treasury
shareholders.
4.2 The distribution will be paid to shareholders in respect of 100% of their
shareholding prior to the sale of the scheme shares to the BEE consortium.
5. ECONOMIC EFFECT ON PEREGRINE SHAREHOLDERS
5.1 Pursuant to -
5.1.1 the payment to shareholders of the special distribution referred to in
paragraph 4 above, such distribution being out of a portion of the proceeds
received from the sale of the treasury shares to the BEE consortium; and
5.1.2 the implementation of the scheme in terms of which shareholders will sell
24 065 224 shares to the BEE consortium at a price of R5,20 per share,
shareholders will receive an amount which equates to R6,00 per each share sold
by such shareholder to the BEE consortium.
5.2 Accordingly shareholders will, in respect of each 1 000 Peregrine shares
held prior to the implementation of the scheme, receive R750 made up as to R650
in respect of 125 shares sold to the BEE consortium at R5,20 per share and R100
in terms of the distribution.
5.3 Such amount of R6,00 per share represents a premium of 2,4% to the ruling
price of Peregrine shares on the day preceding the cautionary announcement of 30
September 2005.
6. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects for which the board of Peregrine is
responsible are presented for illustrative purposes only and may not give a fair
reflection of the financial position and results of operations after the
implementation of the proposed BEE transaction.
The table below sets out the unaudited pro forma financial effects of the
proposed BEE transaction based on the published financial results of Peregrine
for the interim six month period ended 30 September 2005:
Before the After the
proposed BEE proposed BEE
transaction transaction % change
Earnings per share 51.9 50.5 (2.6)
("EPS") (cents)
Headline earnings per 37.9 37.0 (2.5)
share ("HEPS") (cents)
Net asset value per share 303.2 299.9 (1.1)
("NAV") (cents)
Net tangible asset value 179.3 179.6 0.1
per share ("NTAV")
(cents)
Notes:
1. The EPS, HEPS, NAV and NTAV per share "before the proposed BEE
transaction" are based on the unaudited interim results for the six months ended
30 September 2005;
2. The EPS, HEPS, NAV and NTAV per share "after the proposed BEE
transaction" are based on the following assumptions:
2.1 The transaction took place with effect from 1 April 2005 on which date
5,685 million shares were sold out of treasury shares against receipt of a cash
consideration of R31,039 million;
2.2 The company returned capital to shareholders (other than treasury
shareholders) in the amount of 10 cents per share, which amount was paid to
shareholders on 1 April 2005;
2.3 The net cash consideration received (after the special distribution) earned
interest at a before tax call rate of 6.7% for the six months to 30 September
2005;
2.4 There are no accounting effects under D16 - Scope of IFRS2 (issued by IFRIC)
and ED199 - Accounting for Black Economic Empowerment transactions (issued by
SAICA) as the PGR shares have been sold at fair value;
3 The EPS and HEPS "after the proposed BEE transaction" are based on:
3.1 attributable and headline earnings for the six months ended 30 September
2005, adjusted for after tax interest;
3.2 the weighted average number of shares of 193,684 million in issue as at 30
September 2005 plus 5,685 million shares transferred out of treasury shares;
4. The NAV and NTAV per share are based on 192,361 million net shares in issue
as at 30 September 2005 plus 5,685 million shares transferred out of treasury
shares;
5. The tax rate is 29%;
6. CGT has been provided as required.
7. CONDITIONS PRECEDENT
The proposed BEE transaction is subject, inter alia, to the following conditions
precedent:
7.1 the approval by the requisite majority of Peregrine shareholders of the
resolutions approving the sale of the PGR shares and the specific re-purchase of
the BEE consortium"s shares in the event of an exercise of pre-emptive rights;
7.2 the requisite regulatory approvals;
7.3 approval of the scheme by the requisite majority of shareholders and its
sanction by the High Court;
7.4 Peregrine approving the make-up of the consortium and the terms and
conditions governing their relationship inter se; and
7.5 the BEE consortium finalising the arrangements in respect of the funding it
requires to effect the acquisition of the PGR shares and the scheme shares.
8. FUNDING OF BEE CONSORTIUM
The BEE consortium is at an advanced stage in procuring the funding necessary in
order for it to acquire the PGR shares and the scheme shares. Such funding will
be provided by a third party and Peregrine will not be providing financial
assistance in this regard.
9. OPINIONS AND RECOMMENDATIONS
The board has considered the terms and conditions of the proposed BEE
transaction and is of the opinion that it is in the best interests of all of
Peregrine"s stakeholders. Accordingly, the board recommends that shareholders
vote in favour of the resolutions required to approve and implement the proposed
BEE transaction.
The directors of Peregrine who, directly or indirectly, beneficially own
Peregrine shares, intend to vote in favour of the resolutions to implement the
proposed BEE transaction in respect of their shareholdings.
10. WITHDRAWAL OF CAUTIONARY
In light of this announcement, shareholders are no longer required to exercise
caution in their dealing in shares.
11. FURTHER DOCUMENTATION AND IMPLEMENTATION
A circular containing full details of the proposed transactions will be posted
to Peregrine shareholders during March 2006. It is anticipated that the scheme
meeting will be held during April 2006 and the payment of the special
distribution and sale of and payment for the scheme shares will be implemented
by the end of May 2006.
Sandton
8 December 2005
Corporate advisor and sponsor
Java Capital (Proprietary) Limited
Reporting accountants
PKF (Jhb) Inc.
Date: 08/12/2005 05:09:20 PM Produced by the JSE SENS Department
