| Tue 7 Feb 2006, 12:12 | | Elexir - Detailed announcement and withdrawal of c |
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ELX
ELX
Elexir - Detailed announcement and withdrawal of cautionary
Elexir Technology Holdings Limited
(The name of which is to change to PSV Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1998/004365/06)
(JSE code: ELX)
(ISIN: ZAE000016663)
("Elexir" or "the company")
DETAILED ANNOUNCEMENT ON THE TERMS OF THE ACQUISITION OF PSV HOLDINGS LIMITED
RESULTING IN THE REVERSE TAKE-OVER OF ELEXIR AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement dated 23 January 2006, Exchange
Sponsors (Pty) Limited is authorised to announce that Elexir has entered
into a Sale of Shares agreement dated 6 February 2006 with the PSV vendors
to acquire 100% of the entire issued share capital and shareholders loan
claims in PSV Holdings Limited ("PSV Holdings") for a purchase
consideration of R 187,5 million, which will be settled by an issue of 150
000 000 new ordinary shares of no par value at an issue price of R1.00 per
ordinary share to the PSV vendors, and 37 583 093 new no par value ordinary
shares will be issued to settle part of the acquistions of Groupline
Projects (Pty)Limited ("Groupline") and Colvic Petroleum Products (Pty)
Limited("Colvic")which PSV Holdings made before it entered into the
transaction with Elexir. The Sale of Shares agreement is subject to the
fulfilment of the conditions set out in paragraph 2.3. The acquisition will
result in PSV Holdings reverse listing into Elexir and in terms of section
9.5(d) of the Listings Requirements, Elexir must issue revised listing
particulars. After the implementation of the acquisition and the issue and
allotment of the consideration shares, the PSV vendors will control,
directly, in excess of 98.5% of the total issued share capital in Elexir.
Shareholder approval is sought in terms of rule 8.7 of the Securities
Regulation Panel ("SRP") Code for the waiver of a mandatory offer to Elexir
shareholders in terms of Rule 8.1 of the SRP Code.
In addition to the acquisition, Elexir will also seek shareholders approval
for the consolidation of the existing share capital of the company, the
conversion to no par value shares, the increase in the authorised share
capital of the company by way of the creation of convertible preference
shares, the conversion of these convertible preference shares into ordinary
shares with no par value, the specific issues of shares, the change of name
to PSV Holdings, the reconstitution of the board of directors, the general
authority to issue shares for cash and the amendment to the articles of
association. Elexir will apply for the transfer of its listing on the Main
Board of the JSE to the Alternative Exchange ("AltX") of the JSE Limited
("JSE").
2. Terms and conditions of the acquisition
2.1 Terms of the acquisition
Subject to the approval of shareholders, Elexir will acquire, with
effect from 1 March 2006, 100% of the issued shares and shareholders
loan claims in PSV Holdings. The purchase consideration will be
settled by the issue of 150 000 000 new ordinary shares to the PSV
vendors at a consideration price of R1.00 per share. The vendor shares
will be issued to AB Da Silva 71 250 000 shares, P Robinson 71 250 000
shares and to AR Dreisenstock 7 500 000 shares. None of these shares
will be issued to related parties. The Sale of Shares agreement
includes warranties as would ordinarily be required in a transaction
of this nature.
As part of the acquisition, a further 37 583 093 new no par value
ordinary shares will be issued to settle acquisitions made by PSV
before the listing:
To Date Number of Issue price
shares
Groupline vendor 2 000 000 R1.00 per
share
(DJ Kelly) 30 days after
2006 PBT have
been determined 1 000 000
by auditors*
30 days after
2007 PBT have
been determined 1 000 000
by auditors*
Colvic vendors 35 583 093
On
implementation 3 954 093 R1.00 per
date share
(Collectively, VC 14 business
Hall, R Lubbinge, days of audited
EJR Ganhao, GM financial
Mahioodin, F Spaey, statements 3 162 900 R1.00 per
G Smith, L Mariani being issued share
and A Ahlers) for 28/2/2006*
14 business 30 day
days of audited weighted
financial average
statements 9 488 700 price before
being issued the end of
for 28/2/2007* 28 February
2007
14 business 30 day
days of audited weighted
financial average
statements 9 488 700 price before
being issued the end of
for 28/2/2008* 28 February
2008
14 business 30 day
days of audited weighted
financial average
statements 3 162 900 price before
being issued the end of
for 28/2/2009* 28 February
2008
On 1 March 6 325 800 30 day
2009* weighted
average
price before
1 March 2009
* The number of shares to be issued is subject to certain profit
warranties being met.
None of these issues of shares are made to related parties.
2.2 Financial effects of the acquisition
The reviewed pro forma financial effects set out in the table below
are the responsibility of the company"s directors and have been
prepared for illustrative purposes only to show how the acquisition
may have affected Elexir"s results for the six months ended 31 August
2005, based on the assumption that:
- for the purpose of calculating the earnings per share ("EPS") and
headline earnings per share ("HEPS") as if the acquisition was
implemented on 1 March 2005 for the 6 months to 31 August 2005;
- for the purpose of calculating the net asset value ("NAV") and
net tangible asset value ("NTAV") per ordinary share, the
acquisition was effected on 31 August 2005.
Both Elexir and PSV reported their interim results in terms of
International Financial Reporting Standards ("IFRS"). Because of their
nature, the pro forma financial effects may not fairly reflect
Elexir"s financial position after the acquisition.
Before After the After % After %
(cents per share the Change the Change
share)(1) consoli- acquisi- acquisi-
dation tion tion and
(cents per (cents specific
share) per issue of
share)(3 shares
) for cash
(cents
per
share)(4
)-
EPS (1.62) (0.0162) 1.66 >100% 2.30 >100%
HEPS (0.07) (0.0007) 5.27 >100% 5.22 >100%
NAV per
ordinary
share (0.23) (0.0023) 102.55 >100% 110.46 >100%
NTAV per
ordinary (0.23) (0.0023) (7.81) >100% 11.62 >100%
share
Weighted
average
number of 223 128 2 231 96 023 119 023
shares in
issue
(`000)(2)
Ordinary
shares in 223 128 2 231 189 814 235 814
issue
(`000)(2)
Notes:
1. Extracted from the unaudited interim results of Elexir for the
six months ended 31 August 2005.
2. The "before" column reflects the number of ordinary shares before
the acquisition, the specific issue of 46 000 000 shares for cash
and the conversion of the shares in issue on a 100:1 basis and
the "after share consolidation" column reflects the number of
ordinary shares after the conversion of the shares in issue on a
100:1 basis but before the acquisition and specific issue of
shares for cash and the "after acquisition" column reflects the
number of ordinary shares after the acquisition and the
conversion of the shares in issue on a 100:1 basis and the "after
the acquisition and specific issue of shares for cash" column
includes the specific issue of 46 000 000 shares for cash for the
6 months ended 31 August 2005.
3. PSV Holdings" pro forma profit after tax for the six months ended
31 August 2005 of R6.4 million has been included, which include
the audited results of Colvic and Groupline for the six months
ended 31 August 2005.
4. The assumption was made that the specific issue of shares for
cash to selected investors amounting to R46 million less the
listing expenses of approximately R3.8 million, earned interest
at 7% per annum and was taxed at a rate of 29%.
5. The NTAV has been reduced by R209.5 million due to the goodwill
arising on the acquisition of PSV.
2.3 Conditions precedent
The implementation of the acquisition is subject to:
- the Sale of Shares agreement becoming unconditional and being
implemented, which inter alia include obtaining irrevocable
undertakings from selected investors to subscribe for not less
than 46 000 000 shares at an issue price of R 1.00 per share by
no later than 27 February 2006;
- the parties obtaining such regulatory approvals which will be
necessary to enable them to implement the acquisition recorded in
the Sale of Shares agreement by no later than 31 May 2006;
- a waiver by Elexir"s shareholders in general meeting of any
requirements for the PSV vendors to make a mandatory offer in
terms of the SRP Code to any Elexir shareholder by no later than
31 May 2006; and
- such special and ordinary resolutions as are required for the
implementation of the various transactions being duly passed at
the general meeting and the special resolutions being registered
by Companies and Intellectual Property Registration Office
("CIPRO") by no later than 31 May 2006.
2.4 Description of PSV Holdings business
PSV Holdings focuses on the provision of flow control products,
services and electromechanical solutions to the mining, petrochemical
and water and waste management sectors in South Africa and in Africa.
PSV Holdings" product offering has extended from providing pumps and
valves to its customers to positioning the company to implement larger
projects that address customers" requirements. The company has also
established an in-house capability for the manufacturing and
refurbishment of pumps, fuel handling systems and other components, a
highly lucrative business with substantial profit margins.
PSV Holdings, through its subsidiaries, has succeeded in establishing
a loyal customer base in its 18 years of operations. The provision of
a reliable support service has ensured that many of the customers have
remained in its stable during this time.
2.5 Rationale for the acquisition
The reverse listing of PSV Holdings into Elexir will give the
shareholders of Elexir the opportunity to participate in the growth
prospects of a sound enterprise with a good track record. In addition,
the listing will afford PSV the opportunity to raise its business
profile and provide a platform for PSV to pursue other strategic
acquisitions in the industries it operates in.
3. Other related matters
3.1 Waiver of mandatory offer
After the implementation of the acquisition and the issue and
allotment of the consideration shares, PSV Holdings will control,
directly, in excess of 98.5% of the total issued share capital in
Elexir.
Shareholder approval will be sought in terms of rule 8.7 of the SRP
Code for the waiver of the mandatory offer to Elexir shareholders in
terms of Rule 8.1 of the SRP Code.
In compliance with the requirements of the SRP, the board will obtain
appropriate external advice in regard to the terms of the acquisition.
3.2 Restructuring of the share capital of the company
Authorised share capital
Elexir proposes to:
- consolidate its existing ordinary share capital on a 100 to 1
basis which will result in the authorised share capital of 500
000 000 ordinary shares having a par value of 1 cent per share
being consolidated into 5 000 000 shares having a par value of
R1.00 per share;
- convert its par value ordinary shares into no par value ordinary
shares;
- increase its authorised share capital by the creation of 995 000
000 convertible preference shares having a par value of R0.0001
per convertible preference share; and
- immediately convert these convertible preference shares into 995
000 000 no par value ordinary shares.
This will result in the company"s authorised share capital being 1 000
000 000 no par value ordinary shares.
Issued share capital
The issued share capital of 223 127 999 ordinary shares of 1 cent each
will consolidate into 2 231 280 ordinary shares of R1.00 each, which
will be converted into to 2 231 280 no par value ordinary shares,
which will result in the stated capital of the company being
approximately R96.1 million, at the last practicable date.
The above changes to the authorised share capital of the company will
be effected in terms of special resolutions to be proposed at the
general meeting of Elexir shareholders, which special resolutions will
become effective upon registration thereof by CIPRO.
3.3 Reconstitution of the board of directors
As part of the acquisition, it is intended that:
- JJH Mateya will be appointed as the non-executive chairperson of
the company;
- AJD Da Silva will be appointed as an executive director of the
company;
- P Robinson will be appointed as an executive director) of the
company;
- AR Dreisenstock will be appointed as the financial director of
the company;
- EJR Ganhao will be appointed as an executive director of the
company;
- VC Hall will be appointed as an executive director of the
company;
- DJ Kelly will be appointed as an executive director of the
company;
- R Lubbinge will be appointed as an executive director of the
company;
- GJV Shongwe will be appointed as a non-executive director of the
company.
These appointments will add significant value to the company as all
persons to be appointed have substantial knowledge of and experience
in the industries they operate in.
The existing directors, JA Casey and JW Walters, will resign as
directors with effect from the conclusion of the general meeting to
approve the acquisition.
3.4 Specific issue of shares for cash
Subject to the approval by Elexir shareholders of the acquisition,
consolidation, conversion to no par value shares and the increase in
authorised share capital, 46 000 000 new ordinary shares with no par
value will be issued at an issue price of R1.00 per share to selected
investors. The financial effects of the specific issue of shares for
cash are disclosed in paragraph 2.2 above.
The specific issue of shares for cash are not made to related parties.
The rationale for the specific issue of shares for cash is to raise
working capital for PSV and to settle part of the consideration
payable on the Colvic and Groupline acquisitions by PSV before the
listing, which became effective 1 September 2005.
3.5 Change of name
Subject to the approval of the shareholders by way of a special
resolution, the company, in order to better reflect its new corporate
identity will change its name from Elexir Technology Holdings Limited
to PSV Holdings Limited. The change of name has been reserved by
CIPRO.
4. Warning statement
In terms of the Listings Requirements of the JSE ("the Listings
Requirements"), the acquisition is viewed as a "reverse take-over" and
consequently Elexir is required to prepare a Category 1 circular and
listing particulars as though PSV Holdings is a new applicant. As required
by the Listings Requirements, Elexir shareholders are warned that it is
uncertain, at this stage, whether or not the JSE will allow Elexir"s
listing to continue following implementation of the acquisition.
5. Salient dates and times
2006
Circular posted to shareholders Monday, 27 February
Last day to lodge forms of proxy in respect of the
general meeting by 09:00 on Friday, 24 March
The general meeting at 09:00 Tuesday, 28 March
Results of the general meeting published on SENS on Tuesday, 28 March
Results of the general meeting published in the press
on Wednesday, 29 March
Last day to trade in the name of Elexir Thursday, 20 April
Shares will trade in the new share name PSV Holdings Friday, 21 April
Record date Friday, 28 April
Dematerialised shareholders will have their accounts
at the CSDP or broker updated on Tuesday, 2 May
Certificated shareholders will have new certificates
in the name of PSV Holdings posted by registered post,
provided their old share certificates have been
surrendered by 12:00 on Friday, 28 April 2006, on or
about (otherwise within five business days after
receipt of such old share certificates) Tuesday, 2 May
Notes:
1. The above dates and times are subject to amendment. Any such amendment
will be published on SENS and in the press.
2. All times indicated are South African times.
3. Share certificates in the name of Elexir may not be dematerialised or
rematerialised after Thursday, 20 April 2006.
6. General meeting
A general meeting of shareholders of Elexir will be held at 39 First Road,
Hyde Park at 09:00 on Tuesday, 28 March 2006, to consider the proposed
resolutions necessary to effect the acquisition, the matters related
thereto and the additional matters.
7. Circular and revised listing particulars
A circular and revised listing particulars, providing information on the
acquisition and related matters and incorporating a notice to convene a
general meeting, will be posted to Elexir"s shareholders on or about 27
February 2006.
8. Withdrawal of cautionary announcement
Elexir shareholders are advised that caution is no longer required to be
exercised when dealing in their securities.
Hyde Park
6 February 2006
Corporate adviser and sponsor: Exchange Sponsors (Pty) Limited
Legal adviser to Elexir: Stan Fanaroff & Associates
Legal adviser to PSV Holdings: Fluxmans Inc.
Date: 07/02/2006 12:12:29 PM Produced by the JSE SENS Department
