| Fri 11 Feb 2005, 12:03 | | Elexir - Further Announcement And Cautionary Annou |
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Elexir - Further Announcement And Cautionary 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`)
FURTHER ANNOUNCEMENT AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the detailed announcement on 7 October 2004 and the
reviewed group interim results announced on 15 December 2004, in which the
disposal of the property and the restructuring transaction were announced.
As announced on 7 February 2005, a circular, to Elexir shareholders containing
details of the disposal of the property, the restructuring transaction, the
related party disposal of a business unit and an increase in the authorised
share capital of the Company and incorporating a notice of general meeting of
shareholders, has been posted to shareholders on 4 February 2005.
2. TRANSACTIONS
2.1 Disposal of a business unit to a related party
Elexir Computer Services, a wholly owned subsidiary of Elexir, entered into an
arrangement with Securicom, a related party, for the sale of a business unit and
its related assets to Securicom for a cash consideration of R1,315,790 with
effect from 1 January 2004. The business unit disposed of refers to
infrastructure contracts associated with Lucent technology. Messrs BG Casey and
A Morris are members of Securicom and Mr BG Casey is a related party to the
transaction in terms of the Listing Requirements, having been a director of the
Company in the preceding 12 months.
The business unit was disposed of without shareholder approval at the time. This
matter is only now being rectified and put to shareholders for their formal
approval and is incorporated in the circular mailed to shareholders on 4
February 2004. The circular includes an independent professional expert`s fair
and reasonable opinion on the transaction. The reviewed results of Elexir for
the six months to 28 February 2004 and the twelve months to 31 August 2004 did
not include the results of the business unit from 1 January 2004. It is unlikely
that the transaction can in fact be reversed and in addition the directors of
Elexir have secured the undertakings of 41.26% of the shareholders, of the
required 50%, to vote in favour of the disposal.
2.2 Restructuring transaction
Elexir has entered into an agreement with TV Homewatch in regard to the
discharge of the 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 R2,1 million. 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. The issue of ordinary shares is to non
public shareholder. The specific issue for cash on the above transaction is
subject to the approval of shareholders by special resolution in general meeting
on 28 February 2005.
The 31 August 2004 interim reviewed results were prepared on the assumption that
the capital restructure of the Company was successfully implemented on 31 August
2004, resulting in a profit on restructuring of R 5,4 million, even though the
transaction has not yet been approved by shareholders. The directors of Elexir
have secured the undertakings of 41.26% (of the required 75%) of the
shareholders to vote in favour of the restructuring. If the transaction was not
accounted for in the 31 August 2004 results the Company would have been
technically insolvent.
3. CONTINUED LISTING
The Company is in discussions with the JSE with regards to the status of its
listing as it no longer meets the requirements for a main board listing.
4. CAUTIONARY ANNOUNCEMENT
Shareholders are accordingly advised to exercising caution when dealing in
Elexir securities until an announcement is made regarding the results of the
general meeting and the outcome of the discussions regarding its listing status.
Johannesburg
11 February 2005
Lead Sponsor
River Group
Transaction Sponsor
Exchange Sponsors
Date: 11/02/2005 11:41:27 AM
Produced by the JSE SENS Department
