| Fri 24 Mar 2006, 15:24 | | Heritage/Metmar Trading - Updated terms of reverse |
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HCL
HCL
Heritage/Metmar Trading - Updated terms of reverse take-over
Heritage Collection Holdings Limited
Incorporated in the Republic of South Africa
Registration Number 1998/007269/06
ISIN Code: ZAE000023594
Share Code: HCL
("Heritage" or "the company")
Metmar Trading (Pty) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1982/005211/07)
("Metmar Trading")
Supplementary announcement on the terms of the reverse take-over of the company
1. Introduction
Shareholders were advised in an announcement released on SENS and published in
the press on 30 January 2006 and 31 January 2006 respectively ("the original
announcement") that an agreement in principle had been reached between Messrs
Boshoff, Ellwood, Forsdyke and Lotis ("the Metmar shareholders") and Heritage,
in terms of which Heritage would acquire from the Metmar shareholders all of
the issued shares and loan accounts in Metmar Trading and Metmar Properties
(Pty) Limited and 90% of the issued shares and loan accounts in Hornet
Properties (Pty) Limited and 69.1% of the issued shares and loan accounts in
Matrix Metals (Pty) Limited (collectively "Metmar") in exchange for the issue
of consolidated shares in the company, as a reverse take-over ("the reverse
take-over").
It was also announced that the company intended to undertake a consolidation of
its share capital ("the consolidation"), increase its authorised share capital,
dispose of all the assets and liabilities of the company to a subsidiary of the
company, namely Heritage Home and Leisure (Pty) Limited ("Heritage Home and
Leisure"), and distribute the shares in Heritage Home and Leisure to Heritage
shareholders as a dividend in specie ("the dividend in specie"), as well as to
reconstitute the board and to change its name. The company also announced the
intention of the Metmar shareholders to dispose of a portion of the shares to
be issued to them in terms of the reverse take-over as a placing.
2. Rationale for the reverse take-over
The global commodities and resources markets have experienced significant
consumption and pricing growth over the last few years. Metmar envisages
continued strength in the commodities market and sees enormous opportunity for
sub-Saharan Africa in future resources growth.
Through its marketing, financing and logistical networks, Metmar has the
opportunity of participating in new and existing projects via equity and
exclusive off-take agreements. A listed structure offers an ideal vehicle to
realise these opportunities.
3. Update on the terms of the reverse take-over
A formal agreement has now been signed between the company and the Metmar
shareholders and the terms of the reverse take-over have been refined as
follows:
3.1 The repurchase of shares issued in terms of the company"s share incentive
scheme
Subject to shareholder approval, the board is proposing that the 2 100 000
shares held by the company"s share incentive trust are repurchased by the
company for an aggregate consideration of R1.00 and are cancelled ("the
repurchase") and that the company"s share incentive scheme is terminated.
3.2 The issue of shares for cash
The board will be seeking a general authority to issue shares in the company
for cash and to undertake an issue of 15 shares for cash in terms of such
authority in order to facilitate the consolidation ("the issue for cash").
3.3 The consolidation
The company has decided that the consolidation should be on a one-for-fifty
basis rather than a one-for-one hundred basis and, accordingly, the company is
proposing to amend its authorised and issued share capital by the consolidation
of every 50 shares with a par value of 0,1 cent each into 1 share with a par
value of 5 cents ("consolidated shares").
3.4 Possible specific issue(s) of shares
Heritage Home and Leisure, the Heritage subsidiaries and, in their personal
capacities, Barry Lloyd and Philip Bateman (the Heritage controlling
shareholders) have warranted that there will be no assets and no undisclosed
liabilities, contingent or otherwise, in Heritage on the effective date of the
reverse take-over ("the effective date").
In addition, should any liability arise within three years after the effective
date relating to any activities conducted by Heritage prior to the effective
date, which liability must be in respect of an amount payable in terms of a
court order or settlement agreement, then, only in the event of the Metmar
shareholders having exhausted their claim against firstly Heritage, Heritage
Home and Leisure and the Heritage subsidiaries and, subsequently, against Barry
Lloyd and Philip Bateman in their individual capacities, the Metmar
shareholders have the right, but are not obliged, to settle any such
liabilities as well as any associated transaction costs, up to an aggregate
value of R20 million in exchange for the issue of shares in the company ("the
specific issue(s) of shares"). The issue price shall be the weighted average
traded price of the company"s shares over the 30 days prior to the date that
the price of the issue is agreed by the directors of the company or at such
price as determined by an independent advisor appointed to indicate that the
issue price is fair and reasonable.
3.5 Various other transactions associated with the reverse takeover
The board is also seeking a general authority to make payments to shareholders
by way of a reduction in the company"s share capital in order to facilitate the
payment of a possible cash dividend subsequent to the implementation of the
reverse take-over. In addition, the board is also proposing to change the year
end of the company to the last day of February, to appoint new auditors and to
change the trading objects of the company.
3.6 Amended purchase consideration
As a result of the repurchase and the change in the consolidation ratio, 173
625 800 consolidated shares ("the Metmar consideration shares") will now be
issued to the Metmar shareholders as opposed to 88 912 885 consolidated shares
as set out in the original announcement. As set out in the original
announcement, the issue of the Metmar consideration shares means that the
holdings of existing Heritage shareholders will comprise a 1% interest in the
company.
4. Update on the placing
As set out in the original announcement, prior to the Metmar consideration
shares being listed on the JSE Limited ("JSE"), the Metmar shareholders will be
disposing of a portion of such shares to Heritage shareholders and to entities
which would be considered public shareholders (as defined in the JSE Listings
Requirements). The terms of this disposal have been refined as follows:
The Metmar shareholders will be offering 8 768 103 consolidated shares to
existing Heritage shareholders in terms of a non-renounceable offer ("the non-
renounceable offer"). Shareholders registered as such on the record date for
the non-renounceable offer, namely Tuesday 11 April 2006, will be entitled to
subscribe for 15 consolidated shares in respect of every share they hold, after
the implementation of the consolidation referred to in paragraph 3.3 above, at
a price of R1.07 per consolidated share.
In addition, the Metmar shareholders will be placing a further 17 536 206
consolidated shares, together with any shares not subscribed for in the non-
renounceable offer, at a price of R1.07 per consolidated share ("the placing").
Members of the public who are interested in participating in the placing and in
receiving the relevant documentation referred to in paragraph 7 below can email
their contact details to shares@metmar.co.za. Please note that this
announcement is not a prospectus and that whether you receive a copy of the
documentation rests solely within the discretion of the Metmar shareholders.
5. Important dates
The salient dates relating to the dividend in specie, the consolidation, the
non-renounceable offer and the placing, the change of name of the company and
its listing on the JSE as Metmar are set out below. As soon as the ordinary
and special resolutions relating to the implementation of the reverse take-over
have been approved and, where necessary, registered, an announcement confirming
such salient dates will be made.
Activity Date
2006
Last day for receipt of forms of proxy Tuesday 11 April
in respect of the general meeting by
14:00 on
General meeting of Heritage shareholders Thursday 13 April
to be held at 14:00 on
Announcement regarding results of Thursday 13 April
general meeting released on SENS on
Finalisation announcement regarding the
repurchase, the issue for cash, the
dividend in specie, the consolidation
and the name change becoming
unconditional and confirming details of
the respective last days to trade, the
record dates and payment dates released
on SENS on or before Friday 5 May
and published in the press on or before Monday 8 May
Relevant dates for the dividend in
specie
Last day to trade in order to Friday 12 May
participate in the dividend in specie
Shares commence trading on the JSE ex Monday 15 May
the dividend in specie
Record date for the dividend in specie Friday 19 May
Payment date for the dividend in specie Monday 22 May
and share certificates in respect of
shareholders" entitlement to shares in
Heritage Home and Leisure posted on or
about
Relevant dates for the consolidation
Last day to trade in unconsolidated Friday 12 May
shares
Consolidated shares listed on the JSE Monday 15 May
under the new ISIN of ZAE000078598 and
shareholders entitled to trade new
(consolidated) shares
Record date for the consolidation Friday 19 May
Shareholders" safe custody accounts with Monday 22 May
their CSDP or broker updated with the
consolidation on
New share certificates reflecting the Monday 29 May
consolidation (and the name change)
posted if received on or before 12:00 on
Friday 26 May
(or if received thereafter within five
business days of receipt by the transfer
secretaries of existing share
certificates)
Relevant dates for the non-renounceable
offer and the placing
Last day to trade in order to Tuesday 4 April
participate in the non-renounceable
offer
Record date for the non-renounceable Tuesday 11 April
offer
Non-renounceable offer opens at 09:00 on Tuesday 18 April
Non-renounceable offer closes at and Friday 12 May
payment due by 12:00 on
Placing closes and payment due by 12:00 Wednesday 17 May
on
In the event of over-subscription for Thursday 18 May
the placing, allotment determined
Consolidated shares issued in terms of Monday 22 May
the non-renounceable offer and the
placing listed under the new name of
Metmar Limited on the JSE under the new
ISIN of ZAE000078747, JSE code of MML
and new short name of "Metmar"
Dematerialised shareholders" safe Monday 22 May
custody accounts with their CSDP or
broker updated with the consolidated
shares issued in terms of the non-
renounceable offer and the placing on
Share certificates in respect of the Monday 29 May
consolidated shares issued in terms of
the non-renounceable offer and the
placing posted to certificated
shareholders on or about
Relevant dates for the name change
Last day to trade in shares under the Friday 19 May
old name "Heritage Collection Holdings
Limited"
Consolidated shares under the new name Monday 22 May
of Metmar Limited listed on the JSE
under the new ISIN of ZAE000078747
Record date for the name change Friday 26 May
New share certificates reflecting the
name change posted if received on or Monday 29 May
before 12:00 on Friday 26 May on
(or if received thereafter within five
business days of receipt by the transfer
secretaries of existing share
certificates)
Dematerialised shareholders will have Monday 29 May
their accounts at their CSDP or broker
updated with the name change on
Note:
1. Share certificates in issue prior to the consolidation
and reflecting the existing name of the company (Heritage
Collection Holdings Limited) may not be dematerialised or
rematerialised after Friday 12 May 2006.
6. Amended financial effects
The pro forma financial effects presented below are the responsibility of the
board of Heritage and the new board and are presented for illustrative purposes
only to provide information on how the repurchase, the issue for cash, the
consolidation, the dividend in specie and the reverse take-over might have
impacted on the reported financial information of the company if they had been
implemented in the 6-month period ended 30 June 2005. Because of their nature,
the pro forma financial effects may not give a fair reflection of the company"s
financial position at 30 June 2005 or its operations for the period then ended.
Before the After the After the
repurchase, the repurchase, the repurchase, the
issue for cash, issue for cash, issue for cash,
the the the
consolidation, consolidation consolidation,
the dividend in and the dividend the dividend in
specie and the in specie and specie and the
reverse take- before the reverse take-
over1 reverse take- over3,4
over2
(Loss) / earnings per (9.4) - 17.8
share (cents)
Headline (loss) / (9.4) - 17.8
earnings per share
(cents)
Net asset value per 7.9 - 41.5
share at 30 June 2005
(cents)
Net tangible asset 6.0 - 38.3
value per share per
share at 30 June 2005
(cents)
Weighted average 88,912,885 1,736,258 175,362,058
shares in issue for
the period
Shares in issue at 88,912,885 1,736,258 175,362,058
the end of the period
Notes:
The figures in this column are extracted from the published unaudited
consolidated interim results of Heritage for the 6-month period ended 30 June
2005.
The figures in this column are based on the figures set out in the previous
column after the implementation of the repurchase, the issue for cash and the
consolidation and on the assumption that all assets and liabilities of Heritage
had been disposed of to Heritage Home and Leisure and the shares held by
Heritage in Heritage Home and Leisure distributed as the dividend in specie.
The income statement, balance sheet, loss and headline loss, net asset value
and net tangible asset value per share have accordingly been adjusted to
reflect the discontinuance of the business operations of Heritage.
The figures in this column have been compiled from the figures set out in the
previous column and from the combined profit estimate of Metmar for the year
ended 28 February 2006 and the combined pro forma balance sheet of Metmar as at
31 January 2006 ("the financial statements"). The financial statements were
prepared in accordance with International Financial Reporting Standards
("IFRS"). For purposes of the earnings and headline earnings per share it was
assumed that the reverse take-over had been in effect for the 12 months ended
30 June 2005 and, for purposes of net asset value and net tangible asset value
per share, that it had been implemented on 30 June 2005.
The accounting standard for business combinations IFRS 3 (AC140) was applied to
both the income statement and the balance sheet. The fair values assigned to
the identifiable assets, liabilities and contingent liabilities were determined
using provisional values and no goodwill or negative goodwill arose on
acquisition of the business combinations.
7. Documentation
Other than as set out above, no other significant new matter has arisen and
there has been no change affecting any of the information contained in the
original announcement which would require disclosure.
The circular containing full details of the reverse take-over and including a
notice of general meeting was posted to shareholders on 20 March 2006.
Johannesburg
24 March 2006
Deal originator and corporate advisor to Metmar
BDO Capital
Transactional sponsor
BDO QuestCo (Pty) Ltd
Sponsor to Heritage
Sasfin Capital
Reporting accountants to Metmar
Grant Thornton
Date: 24/03/2006 03:24:08 PM Produced by the JSE SENS Department
