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HCI
HCI
Hosken Consolidated Investments Limited - Increase Of HCI"s Interest In Vukani
Gaming Corporation (Pty) Ltd
Hosken Consolidated Investments Limited
(Registration number 1973/07111/06)
(Incorporated in the Republic of South Africa)
ISIN Number: ZAE000003257 Share Code: HCI
("HCI" or the "Company")
INCREASE OF HCI"S INTEREST IN VUKANI GAMING CORPORATION (PTY) LTD
1. Introduction
HCI shareholders are advised that HCI has entered into agreements with the
Trustees for the time being of the Bevin Trust, Karen Judy Slabbert and Willem
Hendrik Van Schalkwyk ("the Vendors") for the acquisition of a further 5%
effective interest in Vukani Gaming Corporation (Pty) Ltd ("Vukani") by HCI
("the Transaction"). Vukani is presently wholly owned by Global Payment
Technology Holdings (Pty) Ltd ("GPT Holdings"), an investment holding company.
The shareholding in GPT Holdings is effectively held as to 95% by HCI and 5% by
the Vendors. In terms of the agreements, the vendors will swap their 5% interest
in GPT Holdings for 500 000 new HCI shares ("the consideration shares") and a
further 250 000 new HCI shares should certain profit warranties in Vukani be
met. Implementation of this transaction will result in HCI owning 100% of GPT
Holdings and indirectly 100% of Vukani.
2. Nature of business of Vukani
Vukani holds licences from Gaming Boards in five provinces of South Africa to
conduct business to operate limited payout machines in designated premises. The
company is operational in three of the five provinces of South Africa with the
other two provinces expecting to commence operations later on in the year.
.
3. Rationale
Vukani is in the early stages of its roll out of limited payout gaming machines
in the operational provinces. As the roll out gains momentum in these provinces
and operations commence in the remaining provinces, Vukani is expected to enter
a period of high growth in the next few years. This transaction enables HCI to
obtain an increased exposure to Vukani at an early stage. This transaction also
enables the vendors to be more effectively incentivised by holding their shares
in HCI.
4. Consideration
The consideration payable by HCI for the acquisition of the 5% effective
interest in Vukani is to be discharged as follows :
by delivering to the vendors 500 000 ordinary issued shares in its capital ("the
Consideration Shares") with immediate effect and
by delivering to the vendors after the finalisation and signature of the 2008
group financial statements of GPT Holdings by the Company"s auditors, a further
8 333 new HCI ordinary shares for every additional R1 million of profit after
tax ("PAT") above R60 million, but subject to a maximum total number of 250 000
additional new ordinary issued shares in its capital ("the Agterskot Shares").
The vendors will not be entitled to any Agterskot shares if the PAT is less than
R60 million.
5. Small related party transaction
The vendors are directors of subsidiary companies within the HCI Group and
according to the listings requirements of the JSE are related parties to HCI.
In accordance with the provisions of Rule 10.7 of the JSE Listings Requirements,
the transaction is a small related party transaction. Accordingly HCI has
appointed Moores Rowland as independent professional expert to provide written
confirmation as to whether this transaction is fair and reasonable to HCI
shareholders. Moores Rowland has provided written confirmation that the
transaction is fair and reasonable to HCI shareholders ("the Fair and Reasonable
Opinion"). The Fair and Reasonable Opinion will be available for inspection at
the offices of HCI during normal business hours until 12 May 2006.
6. Financial effects
The financial effects of the transaction on the published consolidated unaudited
results of HCI for the 6 months ended 30 September 2005 are not significant.
13 April 2006
Sponsor
Investec Bank Limited
Corporate Advisor to HCI
HJS Advisory Services (Pty) Ltd
Date: 13/04/2006 11:32:19 AM Produced by the JSE SENS Department
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