|
HCI
HCI
HCI - Update On Acquisition Of Fabcos Group"s Interest In Tsogo Investment
Holding Company (Pty) Ltd /And The Entering Of Certain information On Call
Option Agreements Entered Into With FABCOS Group To SUBSC
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")
UPDATE ON ACQUISITION OF FABCOS GROUP"S INTEREST IN TSOGO INVESTMENT HOLDING
COMPANY (PTY) LTD / INFORMATION ON OPTION AGREEMENTS ENTERED INTO WITH FABCOS
GROUP TO SUBSCRIBE FOR SHARES IN HCI
UPDATE ON TSOGO ACQUSITION
Background
HCI shareholders are reminded that HCI had previously entered into agreements
with the Trustees for the time being of the Fabcos Trust and various companies
under its control ("the Fabcos Group") that were designed to result in HCI
acquiring the Fabcos Groups" entire remaining interest in Tsogo Investment
Holding Company (Pty) Ltd ("TIH" and "the TIH Acquisition"). Upon implementation
of these agreements HCI would become the owner of 100% of Fabvest Investment
Holding Limited ("Fabvest" and "the Fabvest Acquisition"). Fabvest currently
owns 50% of Fabcos Investment Holding Company (Pty) Ltd ("FIH") and FIH in turn
owns 38% of TIH. The remaining 50% of FIH is owned by Johnnic Holdings Limited
("Johnnic") and HCI effectively owns 51% of Johnnic.
Restructure
HCI shareholders are advised that HCI has now entered into amending agreements
with the Fabcos Group. Implementation of the amending agreements will result in
HCI acquiring Fabvest"s entire remaining 50% interest in FIH - instead of
acquiring 100% of Fabvest - which, as mentioned, owns 50% of FIH. The Fabvest
Acquisition has accordingly been cancelled and is being superseded by the
acquisition of 50% of FIH ("the FIH Acquisition").
The sale by Fabvest of its remaining 50% shareholding in FIH constitutes the
sale by Fabvest of a major asset as contemplated in section 228 of the Companies
Act for which Fabvest shareholder approval is required. A circular is being
prepared in accordance with the provisions of the Securities Regulation Panel"s
Code on Takeovers and Mergers and will be dispatched to Fabvest shareholders in
due course.
The Fabcos Trust which owns in excess of 90% of all the issued shares in the
capital of Fabvest has irrevocably agreed to vote in favour of the sale.
Rationale for restructure
The restructure simplifies the manner in which the TIH Acquisition will be
implemented and facilitates the acquisition by HCI of a more direct shareholding
in TIH - one level lower, via 50% of FIH, instead of via 100% of Fabvest as the
owner of 50% of FIH.
Effective date
The effective date for the FIH Acquisition is the seventh business day after the
date that all the suspensive conditions referred to below are fulfilled and/or
waived ("the Effective Date").
Consideration
The only significant difference between Fabvest Acquisition and the FIH
Acquisition is that whereas the consideration for the Fabvest Acquisition was 15
500 000 HCI shares, the consideration for the FIH Acquisition is a cash amount
of R565 million.
The Consideration is to be paid in two cash instalments after the Effective
Date..
Financial Effects for the FIH Acquisition
The unaudited pro forma financial effects of the FIH Acquisition do not have a
significant effect on the latest published consolidated unaudited results of HCI
for the 6 months ended 30 September 2005.
Remaining terms and conditions
The remaining terms and conditions of the FIH Acquisition are substantially the
same as the terms and conditions of the Fabvest Acquisition.
Shareholders are reminded that the TIH acquisition is subject to the approval of
the relevant South African Gaming Boards. HCI is pleased to advise that it has
on 3 April 2006, received the requisite approval from the Kwazulu Natal Gaming
Board. The TIH Acquisition remains subject to the approval of the Gauteng,
Mpumalanga and Eastern Cape Gaming Boards respectively. These Gaming Boards
require fresh applications to be made to them for approval of the restructured
transaction (being the FIH Acquisition) and such applications have been and / or
are in the course of being made.
GRANT OF OPTIONS TO FABVEST TO SUBSCRIBE FOR SHARES IN HCI
Introduction
HCI has also entered into two option agreements with Fabvest.
Under the first option agreement, Fabvest has been granted an option to
subscribe for 4 million new ordinary shares in the share capital of the Company
at a price equal to R36 per ordinary share if exercised before 15th May 2006 or,
if exercised thereafter, the greater of R38 per ordinary share and 10% below the
volume weighted average price per share of HCI shares traded on the JSE Limited
for the 30 day period immediately preceding the Effective Date. The price for
the shares is payable in cash. This option may be exercised at any time before
17h00 on the third business day after the Effective Date and lapses thereafter.
..
Under the second option agreement, Fabvest has been granted an option to
subscribe for not less than 2 million and not more than 6 million new ordinary
shares in the share capital of the Company at a price equal to the greater of
R38 per ordinary share or 10% below the volume weighted average price per share
of HCI shares traded on the JSE Limited for the 30 days immediately preceding
the date that the option is exercised.. The price for the shares is payable in
cash. This option may only be exercised on the 26th September 2006 provided
Fabvest has exercised its rights and discharged its obligations in respect of
the first option agreement in full and it lapses thereafter..
Rationale
The awarding of the options is to allow Fabvest an opportunity to subscribe for
shares in HCI which, if exercised to the full extent provided for, will increase
HCI"s Black Empowerment shareholding from approximately 54% currently to
58%thereafter. The subscription proceeds from the issue of the new HCI shares
will also facilitate a reduction in HCI"s borrowings.
Financial effects
The unaudited pro forma financial effects of the allotment of 10 million new HCI
ordinary shares for cash ("the allotment") pursuant to the exercise in full of
the First Option and the Second Option by Fabvest, for which the HCI Board is
responsible, have been prepared for illustrative purposes only and to provide
information on how the allotment may impact the historic financial results of
HCI. Because of their nature, the unaudited pro forma financial effects may not
give a fair reflection of HCI"s financial position after the implementation of
the allotment or the effect on future earnings.
The table below sets out the unaudited pro forma financial effects of the
allotment on earnings, headline earnings and net asset value per HCI share,
subject to the assumptions set out below and are based on the latest published
consolidated unaudited results of HCI for the 6 months ended 30 September 2005.
Per HCI ordinary Before After (2) Percentage
share 1) Change
Earnings (cents) 131.88 131.89 (3) 0.01%
Headline earnings 128.69 128.95 (3) 0.20%
(cents)
Net asset carrying 1326 1513 (4) 14.08%
value (NACV)
(cents)
Number of shares 118 197 128 197
in issue ("000")
Weighted average 118 037 128 037
number of shares
in issue ("000")
Notes:
1. The "before" financial information has been extracted, without adjustment,
form the unaudited interim financial
results of HCI for the six months ended 30 September 2005.
2. The unaudited pro forma "After" financial information has been computed
based on the assumption that the First
Option is exercised in full for 4 million shares at R36 per share and that
the Second Option is exercised in full for 6
million shares at R38 per share.
3. The unaudited pro forma "after" earnings and headline earnings per share
calculations have been based on the
following assumptions :
- the allotment is effected on 1 April 2005 for income statement purposes;
- the proceeds from the allotment is used to reduce group borrowings.
An adjustment was made to take into account the reduction in after tax
interest at the average borrowing rate of
the group being 10%p.a for the period 1 April 2005 to 30 September 2005,
assuming a corporate tax rate of 29%.
4. The unaudited pro forma "after net asset carrying value per share"
calculations have been based on the
assumption that the allotment was implemented on 30 September 2005.
5. The pro forma financial effects on tangible net asset value per share has
not been included as the effect thereon is
no different to NACV.
Shareholder approval
Implementation of the first and second option agreements is subject to HCI
shareholders furnishing such approvals and/or passing such resolutions as may be
required in terms of the listings requirements of the JSE Limited and HCI has
undertaken to procure this. A circular to HCI shareholders is being prepared in
accordance with such listings requirements and will be dispatched to
shareholders in the near future.
26 April 2006
Sponsor
Investec Bank Limited
Corporate Advisor to HCI
HJS Advisory Services (Pty) Ltd
Reporting accountants
PKF (Jhb) Inc
Date: 26/04/2006 04:58:55 PM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
