| Thu 7 Oct 2004, 8:15 | | Announcement |
|
Elexir Technology Holdings Limited - Announcement
Elexir Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1998/004365/06)
(Share Code: ELX ISIN Code: ZAE000016663)
(`Elexir` or `the Company`)
Announcement relating to:
- the disposal of a property by Elexir;
- the settlement of certain debt owed by Elexir in exchange for the issue of
ordinary shares in Elexir;
- the proposed increase in the authorised ordinary share capital of Elexir;
and
- the proposed change in the financial year-end of Elexir.
1. INTRODUCTION
Further to the cautionary announcements dated 24 May 2004, 5 July 2004 and 17
August 2004, Elexir shareholders are advised of certain transactions and actions
as detailed below:
- the disposal of the property owned by Pitstop Properties (Pty) Limited, a
wholly owned subsidiary of Elexir, which disposal requires approval by the
Company`s shareholders in a general meeting in terms of Section 228 of the
Companies Act, 1973 (Act 61 of 1973), as amended (`disposal of the property`);
- the settlement of certain debt owed by Elexir to TV Homewatch (Pty)
Limited, in exchange for the issue of ordinary shares in Elexir (`the
restructuring transaction`);
- the proposed increase in the authorised ordinary share capital of Elexir in
terms of Section 75 of the Companies Act, 1973 (Act 61 of 1973), as amended,
which requires approval by the Company`s shareholders in a general meeting; and
- the proposed change in the financial year-end of Elexir from 31 August to
28 February.
2. SALIENT FEATURES AND RATIONALE OF THE TRANSACTIONS
2.1 Disposal of the property
Pitstop Properties (Pty) Limited, a wholly owned subsidiary of Elexir, has
entered into an agreement with Brookfield Investments 187 (Pty) Limited for the
sale of the property owned by it for a net cash consideration of R2,890,000.
The property sold is Freehold Stand no 103 Kyalami Park, measuring 2,307mSquared
situated at 156 Kyalami Boulevard, Kyalami Business Park, Kyalami, which was
occupied by Elexir. Transfer of ownership of the property and payment of the
purchase consideration shall occur on the date of registration of the transfer
thereof, which is expected to be in November 2004.
The property is a non-core asset and was sold to enable Elexir to use the
proceeds to repay debt.
2.2 Restructuring transaction
Elexir entered into an agreement with TV Homewatch (Pty) Limited (`TV
Homewatch`) in regard to the settlement of debt owed by Elexir to TV Homewatch
by way of the issue of 60,000,000 ordinary shares in Elexir at an issue price of
3,5 cents per share, being an amount of R2,100,000. The issue price represents
the 30 day weighted average trade price of the ordinary shares of the Company as
at 26 July 2004, being the date the agreement was signed. In addition, a
further 20,000,000 ordinary shares in Elexir at an issue price of 3,5 cents per
share, are to be issued to SME Corporate Solutions (Pty) Limited the corporate
advisors of Elexir, for structuring and negotiating the restructuring
transaction.
The reason for the restructuring transaction is to reduce the significant levels
of debt of the Company, thereby substantially improving the Elexir balance
sheet.
3. INCREASE IN THE AUTHORISED ORDINARY SHARE CAPITAL
Elexir proposes, in terms of Section 75 of the Companies Act, 1973 (Act 61 of
1973), as amended, to increase its authorised ordinary share capital from
R2,000,000, divided into 200,000,000 ordinary shares of 1 cent each to
R5,000,000, divided into 500,000,000 ordinary shares of 1 cent each. The
increase in the authorised ordinary share capital of Elexir will facilitate the
issue of shares for the restructuring transaction and the funding of future
transactions beneficial to the company.
4. PROPOSED CHANGE IN YEAR END
Elexir proposes to change its financial year-end from 31 August to 28 February
to bring it in line with the Company`s business cycle.
5. FINANCIAL EFFECTS
The pro forma financial effects of the transactions, as set out below, have been
prepared for illustrative purposes only and are based on the following
assumptions:
- the headline earnings, earnings, net asset value and tangible net asset
value per share reflected in the `before` column were extracted from the Elexir
Group`s reviewed results for the six months ended 28 February 2004;
- the headline earnings and earnings per share reflected in the `after`
column assume that the disposal of the property and the restructuring
transaction were effected on 1 September 2003; and
- the net asset value and tangible net asset value per share reflected in the
`after` column assume that the disposal of the property and the restructuring
transaction were effective on 28 February 2004.
5.1 Financial effects of the disposal of the property
Before (1) After Change
(cents) (cents)
Loss per share (2) (0,62) (0,57) 8%
Headline loss per (0,64) (0,59) 8%
share (2)
Net tangible asset 0,20 0,19 (4%)
value per share (3)
Net asset value per 0,20 0,19 (4%)
share (3)
Notes:
1. Extracted from the reviewed results of Elexir for the six months ended 28
February 2004.
2. Adjusted to reflect the loss on disposal of the property, the saving of
interest charges at 11% on the sale proceeds and the costs incurred to rent new
premises for the six months ended 28 February 2004. Earnings and headline
earnings per share calculations were based on a weighted average number of
143,128,000 ordinary shares in issue for the six months ended 28 February 2004.
3. The net asset value and net tangible asset value per share calculations
were based on 143,128,000 ordinary shares in issue at 28 February 2004.
5.2 Financial effects of the restructuring transaction
Before After Change
(1) (cents)
(cents)
Earnings / (loss) per (0,62) 2,07 >100%
share (2)
Headline loss per (0,64) (0,41) 36%
share (2)
Net tangible asset 0,20 3,85 >100%
value per share (3)
Net asset value per 0,20 3,85 >100%
share (3)
Notes:
1. Extracted from the reviewed results of Elexir for the six months ended 28
February 2004.
2. Earnings and headline earnings per share calculations were based on the
profit that will be realised by the restructuring transaction and based on a
weighted average number of 223,128,000 ordinary shares in Elexir in issue for
the six months ended 28 February 2004.
3. The net asset value and net tangible asset value per share calculations
were based on 223,128,000 ordinary shares in issue at 28 February 2004.
5.3 Financial effects of the disposal of the property and the restructuring
transaction
Before (1) After Change
(cents) (cents)
Earnings / (loss) per (0,62) 2,10 >100%
share (2)
Headline loss per (0,64) (0,38) 41%
share (2)
Net tangible asset 0,20 3,84 >100%
value per share (3)
Net asset value per 0,20 3,84 >100%
share (3)
Notes:
1. Extracted from the reviewed results of Elexir for the six months ended 28
February 2004.
2. Adjusted to reflect the loss on disposal of the property, the saving of
interest charges at 11% on the sale proceeds, the costs incurred to rent new
premises and the profit that will be realised by the restructuring transaction
for the six months ended 28 February 2004. Earnings and headline earnings per
share calculations were based on a weighted average number of 223,128,000
ordinary shares in Elexir in issue for the six months ended 28 February 2004.
3. The net asset value and net tangible asset value per share calculations
were based on 223,128,000 ordinary shares in issue at 28 February 2004.
6. CONDITIONS PRECEDENT
The transactions are subject to the fulfilment of various conditions precedent,
including:
- regulatory approvals as required;
- the approval of the disposal of the property by Elexir shareholders in the
general meeting;
- the approval of the restructuring transaction by Elexir shareholders in the
general meeting;
- the approval by special resolution of the Elexir shareholders in general
meeting of the increase in the authorised ordinary share capital and the
registration of such special resolution by the Registrar of Companies.
7. IRREVOCABLE UNDERTAKINGS
Shareholders holding 47,87% of the issued share capital have given irrevocable
undertakings to vote in favour of the disposal of the property at the general
meeting.
8. GENERAL MEETING AND DOCUMENTATION
A circular to Elexir shareholders containing details of the transactions and
incorporating a notice of general meeting of shareholders will, subject to
approval by the JSE, be mailed to shareholders within 28 days of this
announcement or within such longer period as the JSE may allow in the
circumstances.
Johannesburg
7 October 2004
Corporate Advisors Sponsor
Corporate Solutions Exchange Sponsors
Attorneys Auditors and reporting
accountants
Fluxmans
Russell Bedford Southern
Africa (Jhb) Inc
