| Tue 14 Mar 2006, 15:52 | | Gencor - The proposed distribution of a liquidatio |
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GMF
GMF
Gencor - The proposed distribution of a liquidation dividend in anticipation of
a members" voluntary winding-up
GENCOR LIMITED
Incorporated in the Republic of South Africa
Registration number 1895/001232/06
ISIN code: ZAE000013066 & Share code: GMF
("Gencor" or "the Company")
THE PROPOSED DISTRIBUTION OF A LIQUIDATION DIVIDEND IN ANTICIPATION OF A
MEMBERS" VOLUNTARY WINDING-UP
1. Introduction and rationale
Gencor"s shareholders have been advised previously that during July 2003, the
Bareki Tribal Authority and the Nkululeko Environmental and Development Group
("the claimants") instituted a claim against Gencor (and others) in which the
claimants sought the rehabilitation of certain areas of land in and around the
Bute asbestos mine and Heuningvlei ("the claim"). Gencor set aside an amount of
R35 million of its cash resources as security for the claim ("the security").
In terms of an agreement concluded on 13 January 2006 between the claimants,
Gencor and others (including the Minister of Minerals and Energy in her capacity
as the Minister responsible for the Department of Minerals and Energy):
- the claim against Gencor has been withdrawn fully and finally;
- the claimants have waived and abandoned unconditionally and irrevocably any
claims against Gencor for rehabilitation in the Bute and Heuningvlei areas;
- no payment has been or will be made by Gencor under this agreement and the
security has fallen away; and
- the Department of Minerals and Energy will undertake certain rehabilitation
work in and around Bute and Heuningvlei.
As the outstanding rehabilitation matter has now been resolved fully and
finally, the Gencor Board has resolved that, subject to the fulfilment of the
conditions precedent in paragraph 3 below, Gencor will make a distribution of a
liquidation dividend in anticipation of a members" voluntary winding-up of
approximately
R69.72 million (20 cents per Gencor share), payable to shareholders registered
at the close of business on Friday, 28 April 2006.
Subsequent to the payment of the liquidation dividend, the Company will apply
for the winding-up in terms of sections 349 and 350 of the Companies Act 1973
(Act 61 of 1973), as amended, ("the Act") by way of a members"
voluntary winding-up.
2. Opinion and recommendation
The Board is of the opinion that the reason for the Company to be listed no
longer exists. The directors are of the view that a winding-up and liquidation
dividend is the best way to return value to shareholders.
The directors have considered the terms and conditions of the proposals and are
of the opinion that they are fair and reasonable to the Company and its
shareholders. Accordingly, the directors recommend that shareholders vote in
favour of the ordinary and special resolutions as set out in the notice of
general meeting as contained in the circular posted to shareholders on 14 March
2006. The directors, in respect of their own holdings of shares, intend to vote
in favour of such resolutions set out in the notice of general meeting.
3. Conditions precedent
The liquidation dividend, winding-up and delisting of Gencor are subject to the
following conditions:
- the passing of the ordinary and special resolutions required to effect the
proposals at the general meeting;
- the registration by the Registrar of Companies of the special resolutions
passed at the general meeting; and
- the implementation of the ordinary and special resolutions, as proposed at the
general meeting.
4. The winding-up and liquidation dividend
4.1 Winding-up
Subject to the approval of shareholders at the general meeting to be held on
Thursday, 6 April 2006, Gencor will be wound up in terms of sections 349 and 350
of the Act by way of a members" voluntary winding-up. The winding-up will
commence on the date of registration of the relevant special resolutions,
whereafter the liquidator will be appointed to continue with the winding-up
process, which is expected to be completed in approximately 6 months from the
date of registration of the special resolutions.
4.2 The liquidation dividend
Based on the current cash balances and the settlement of outstanding
obligations, the liquidation dividend in anticipation of the winding-up equates
to R69 718 051.40 (20 cents per Gencor share). Subject to shareholders"
approval, it is anticipated that the liquidation dividend will be payable by
Tuesday, 2 May 2006 to Gencor shareholders registered as such at the close of
business on Friday, 28 April 2006.
5. Financial effects
The unaudited pro forma financial information provided is the responsibility of
the directors.
Set out below is the unaudited pro forma balance sheet before and after the
liquidation dividend and liquidation costs in anticipation of the members"
voluntary winding-up, which is based on the published unaudited balance sheet of
Gencor at 31 December 2005 and assumes that the liquidation dividend in
anticipation of the members" voluntary winding-up as well as the liquidation
costs were paid on 31 December 2005.
The unaudited pro forma balance sheet set out below does not necessarily
represent or indicate sustainable earnings or the future financial position of
Gencor after the payment of the proposed liquidation dividend in anticipation of
the members" voluntary winding-up as well as the payment of the liquidation
costs. Accordingly the unaudited pro forma balance sheet set out below has been
prepared for illustrative purposes only, to show the effect of the proposed
liquidation dividend in anticipation of the members" voluntary winding-up and
the liquidation costs on the 31 December 2005 balance sheet of Gencor.
Adjustments Adjustments
Before (Interim (Liquidation
(As reported) dividend) costs)
(R millions) Note 1 Note 2 Note 3
Current assets 81.4 (7.0) (1.1)
Capital and reserves 79.2 (7.0) (1.1)
Share capital 69.7 - -
Retained earnings 9.5 (7.0) (1.1)
Current liabilities 2.2 - -
Total equity and 81.4 (7.0) (1.1)
liabilities
Number of shares in
issue (million)
348.6 348.6 348.6
Net asset value per
share (cents)
22.7 (2.0) (0.3)
Net tangible asset
value per share
(cents)
22.7 (2.0) (0.3)
Pro Forma
After
liquidation
Adjustments dividend and
(Liquidatio liquidation
n
dividend) costs
(R millions) Note 4 Note 5
Current assets (69.7) 3.6
Capital and reserves (69.7) 1.4
Share capital (68.3) 1.4
Retained earnings (1.4) -
Current liabilities - 2.2
Total equity and liabilities (69.7) 3.6
Number of shares in issue (million)
348.6 348.6
Net asset value per share (cents) (20.0) 0.4
Net tangible asset value per share
(cents)
(20.0) 0.4
Notes:
1. Extracted from the unadjusted published unaudited Gencor interim results
for the six months ended 31 December 2005.
2. Represents the payment of the interim dividend of 2 cents per share,
which was declared on 13 February 2006 and paid on 13 March 2006, but
adjusted for the purposes of the pro forma balance sheet on the assumption
that it was declared and paid on 31 December 2005, before the payment of
the liquidation dividend dealt with in note 4 below.
3. Represents the payment of the liquidation costs as indicated in section
14.2 of the circular that was posted to shareholders on 14 March 2006.
4. Represents the payment of a liquidation dividend of 20 cents per share
in anticipation of the members" voluntary winding-up. This entry is based
on the assumption that the proposed liquidation dividend was paid on 31
December 2005, but after the interim dividend of 2 cents per share which is
dealt with in note 2 above, that the proposed liquidation dividend is
applied against retained earnings first, with the balance reducing share
capital and that no STC will be payable due to sufficient STC credits being
available for set-off.
5. Pro forma balance sheet of Gencor after the payment of the interim
dividend in note 2 above, the payment of the liquidation costs in note 3
above and the payment of the proposed liquidation dividend in note 4 above.
The impact of the voluntary winding-up on the earnings of Gencor is set out
below.
6 months to 12 months to After liquidation
31 December 30 June dividend and
2005 2005 liquidation costs
Basic and diluted
earnings per share
(cents)
0.4 2.2 *
Basic and diluted
headline earnings
per share (cents)
0.4 2.2 *
* The company will have no continuing earnings after the voluntary winding-up.
6. Listing on the JSE
Subject to shareholders" approval of the winding-up of Gencor, the listing of
the Company will be suspended from the JSE List with effect from the
commencement of business on Friday, 21 April 2006. It is anticipated that the
listing of Gencor shares will be terminated by Wednesday, 3 May 2006.
7. Salient dates
The salient dates and times are as follows:
2006
Circular posted to shareholders Tuesday, 14 March
Last day for lodging forms of proxy for the
general meeting by 15:00 on
Tuesday, 4 April
General meeting of shareholders at 15:00 on Thursday, 6 April
Results of the general meeting published on Thursday, 6 April
SENS on
Results of the general meeting published in Friday, 7 April
the press on
Last day trade in order to receive a
liquidation dividend at close of business on
Thursday, 20 April
Suspension of Gencor shares from JSE with
effect from the commencement of business on
Friday, 21 April
Record date Friday, 28 April
The liquidation dividend to be paid on Tuesday, 2 May
Termination of listing of Gencor shares from
the JSE from the commencement of business on Wednesday, 3 May
Notes:
1. Share certificates may not be dematerialised or rematerialised after
Thursday, 20 April 2006.
2. The above dates and times may be subject to amendment. Any amendment
will be published on SENS and in the press.
3. The proposed liquidation dividend to certificated shareholders will be
effected by way of a cheque. All monies so payable by cheque shall be sent
by ordinary post, at the risk of that certificated shareholder, to the
address of that certificated shareholder as set forth in the register. The
proposed liquidation dividend to dematerialised shareholders will be
effected to the relevant shareholder"s account at its CSDP or broker, in
accordance with the terms of the agreement entered into between the
dematerialised shareholder and its CSDP or broker.
8. Circular and notice of general meeting
A circular, containing further information, including a notice of general
meeting, was posted to the shareholders of Gencor on 14 March 2006. The general
meeting of shareholders of Gencor will be held at 15:00 on Thursday, 6 April
2006 in the Boardroom, Ground Floor, Northwards, 21 Rockridge Road, Parktown,
Johannesburg.
Johannesburg
14 March 2006
Sponsor
Investec Bank Imited
(Registration number 1969/004763/06)
Auditors and Reporting Accountants
PriceWaterhouseCoopers
Attorney
Webber Wentzel Bowens
Date: 14/03/2006 03:52:28 PM Produced by the JSE SENS Department
