| Fri 10 Feb 2006, 17:19 | | Brimstone - Posting of circular announcement |
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BRN BRT
BRT
Brimstone - Posting of circular announcement
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
("Brimstone" or "the Company")
Posting of the circular regarding the approval of the acquisition by certain non
executive directors of Brimstone "N" ordinary shares (" "N" ordinary shares")
Introduction
A circular has been posted to shareholders today, Friday, 10 February 2006 ("the
circular") in terms of which shareholders are requested to consider, and, if
deemed appropriate, approve, with or without modification, the acquisition of 6
250 000 "N" ordinary shares ("the directors" acquisitions") by Messrs M Hewu, AA
Roberts, N Khan, LA Parker and Y Pahad who are non-executive directors of
Brimstone ("designated directors"). The proposed acquisitions by the designated
directors is being undertaken in order to replenish cash and improve empowerment
credentials.
The Investec issue and the directors" acquisitions
Brimstone entered into a subscription agreement with Investec Bank Limited
("Investec") on 28 December 2005 in terms of which 6 250 000 "N" ordinary shares
were issued to Investec ("the Investec issue") under the Company"s general
authority to issue shares ("the subscription agreement"). The price at which the
Investec issue was undertaken ("issue price") was 236.7 cents, which equated to
a 10% discount to the volume weighted average price for the 30 business days
prior to 9 November 2005, being the date on which the decision to undertake the
cash issue was made.
In terms of the directors" acquisitions, Messrs M Hewu and AA Roberts will each
acquire 500 000 "N" ordinary shares, and Messrs N Khan, LA Parker and Y Pahad
will each acquire 1 750 000 "N" ordinary shares from Investec pursuant to an
option agreement entered into between Investec and each of the designated
directors, as contemplated in the subscription agreement. The price at which the
directors will acquire these shares is the issue price plus additional holding
costs.
Independent expert"s opinion
The JSE Issuer Services Division has ruled that the directors" acquisitions be
treated as if they were a specific issue of shares for cash to a related party
as contemplated in the JSE Limited Listings Requirements, as, subject to the
requisite approvals, the Investec shares can be acquired by the designated
directors. Consequently, a fair and reasonable opinion has been obtained from an
independent professional expert, Moores Rowland, which is set out in the
circular.
Financial effects of the Investec issue
Based on the published consolidated unaudited results of Brimstone for the six
months ended 30 June 2005, the pro forma financial effects of the Investec issue
on Brimstone"s earnings per share ("EPS"), headline earnings per share ("HEPS"),
net asset value ("NAV") and net tangible asset value ("NTAV") per share are set
out below. The pro forma financial information has been prepared for
illustrative purposes only and because of its nature may not give a true picture
of Brimstone"s financial position and results of operations, and is the
responsibility of the directors.
Per Brimstone share Before the After the Percentage
(cents) Investec Investec change
issue (1) issue (2)
EPS 13.3 12.9(3) (3.0)
HEPS 12.5 12.1(3) (3.2)
NAV and NTAV 139.6 142.3(3)(4) 1.9
Number of shares for EPS 124 093 130 343
and HEPS ("000)
Number of shares for NAV 207 081 213 331
and NTAV ("000)
Notes:
Based on the published consolidated unaudited results of Brimstone for
the six months ended 30 June 2005.
Based on the assumption that the Investec issue was effected on 1
January 2005 for income statement purposes and on 30 June 2005 for
balance sheet purposes.
After taking into account the after-tax interest earned on the cash
received in terms of the Investec issue and the costs of the Investec
issue.
On the basis that no intangible assets are separately recognised, in
accordance with IFRS.
General meeting
The circular includes a notice convening a general meeting of Brimstone
shareholders to be held at The Athenaeum, Boundary Terraces, 1 Mariendahl Lane,
Newlands, Cape Town on Monday, 27 February 2006 at 10h00 for Brimstone
shareholders to consider, and, if deemed appropriate, pass the resolutions in
terms of which the acquisitions by the directors is being proposed.
Cape Town
10 February 2006
Corporate adviser and sponsor to Brimstone
Nedbank Capital
Reporting accountants to Brimstone
Deloitte & Touche
Attorneys to Brimstone
Hofmeyr Herbstein & Gihwala Inc.
Independent expert to Brimstone
Moores Rowland
Date: 10/02/2006 05:19:24 PM Produced by the JSE SENS Department
