| Wed 14 Dec 2005, 17:03 | | Decillion Limited - Disposal by decillion of the A |
|
Decillion Limited - Disposal by decillion of the Agricultural and Commodities
broking business and further cautionary announcement
DECILLION LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1998/011692/06)
JSE code: DEC ISIN: ZAE000017612
("Decillion" or "the company")
Disposal by decillion of the Agricultural and Commodities broking business and
further cautionary announcement
introduction
Shareholders are referred to the interim results announcement of the company
dated 23 November 2005 and prior cautionary announcements regarding the
realisation of the company"s interests in the agricultural and commodities
business.
On 30 November 2005, Dynamic Agricultural Derivatives (Proprietary) Limited
("Dynamic"), which company is a subsidiary of Suidwes Beleggings Limited,
concluded a sale of assets agreement ("the Agreement") with Decillion Agri
Services (Proprietary) Limited ("DAS") to acquire all the assets of DAS ("the
Agri disposal").
DAS is a subsidiary of Decillion and is in the business of rendering
agricultural financial services to entities in the private and public sector.
The transaction
In terms of the Agreement, the effective date of the transaction is
1 December 2005.
The Agri disposal consideration is R49 134 937 and the total effective net
consideration that DAS will receive, after settlement of all third party
liabilities, will amount to R26 269 729.
The proceeds of the Agri disposal will be applied by DAS to settle outstanding
liabilities to the Decillion group.
Rationale and further cautionary announcement
As announced previously, Decillion has embarked upon a process to convert its
assets into cash, with the objective of delisting the company in the near
future. The disposals are a continuation of this objective.
Shareholders are advised that the company is engaged in negotiations regarding
the sale of its funds management business and its international broking business
("the other disposals") and should therefore exercise caution in dealing in
their Decillion shares on the JSE Limited ("JSE") until further announcements
are made in this regard.
financial effects
Set out below are the pro forma financial effects of the Agri disposal, on the
earnings, headline earnings, net asset value and net tangible asset value per
Decillion share, based on the assumptions that:
- for purposes of the earnings and headline earnings per share calculations:
the Agri disposal was effective for the 6 months ended 31 August 2005; and
- the proceeds of the Agri disposal were invested at an after-tax interest
rate of 6,6%;
- for purposes of the net asset value and tangible net asset value per share
calculations, the Agri disposal was effected on 31 August 2005.
Unaudited Pro forma Change
Before After the After the
(cents) Agri Agri
(1) disposal disposal
(cents) (%)
(Loss)/earnings per (0,6) (2) 0,5 Nmf
share
Headline earnings per 0,8 (3) 1,3 61,2
share
Net asset value per 22,2 22,9 3,2
share
Tangible net asset 14,1 14,7 4,3
value per share
Notes
Extracted from the unaudited interim financial results of Decillion for the 6
months ended 31 August 2005.
Based on a weighted average number of 164 913 000 Decillion shares in issue
during the 6 months ended 31 August 2005 and on an attributable loss of
R1 012 000 for the period then ended.
Based on a weighted average number of 164 913 000 Decillion shares in issue
during the 6 months ended 31 August 2005 and on headline earnings of R1 348 000
for the period then ended.
The net asset value of the Agri assets at 31 August 2005 after settlement of all
third party liabilities was R20 983 000.
Proceeds equal to the amount calculated in (4) above, plus a premium of
R1 000 000 have been used in the calculations.
The financial effects contained in table 4.1 above are the responsibility of the
directors of Decillion and:
- have been prepared for the purposes of illustrating how the Agri disposal
would have affected the relevant financial ratios of Decillion for the historic
financial period indicated and are pro forma only. Accordingly, such effects do
not necessarily represent a true reflection of the financial effects of the Agri
disposal on Decillion"s current and future earnings and net asset value; and
- take into account the estimated costs associated with the Agri disposal and
estimated Capital Gains Tax implications.
RESOLUTIVE conditions
The Agreement is subject to resolutive conditions that if the requisite
shareholder approval which may be required for purposes of approving and/or
ratifying the implementation of the Agreement, if any, has not been obtained by
DAS; or Decillion has not been able to obtain irrevocable written undertakings
from its shareholders holding more than 50% (fifty per cent) of the voting
rights exercisable in respect of its issued share capital, to approve and/or
ratify the implementation of the Agreement at its next general meeting (whether
extraordinary or otherwise), the Agreement shall terminate retrospectively as if
it had not been entered into.
CIRCULAR TO SHAREHOLDERS
A circular to Decillion shareholders containing details of the Agri disposal and
notice of a general meeting to be convened for purposes of obtaining the
required shareholder approval for the Agri disposal, will, subject to the
approval of the JSE and the Securities Regulation Panel ("the SRP"), be mailed
to shareholders within 28 days of this announcement or within such longer period
as the JSE and/or SRP may allow in the circumstances.
Johannesburg
14 December 2005
Corporate adviser Sponsor
PSG CAPITAL BARNARD JACOBS MELLET
CORPORATE FINANCE (PTY) LTD
Reporting accountants and Attorneys
auditors
- PKF - JOWELL GLYN & MARAIS
Date: 14/12/2005 05:03:45 PM Produced by the JSE SENS Department
