| Fri 30 Jun 2006, 7:30 | | Spectrum - Acquisition Of Control Of Impson Freigh |
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SUM
SUM
Spectrum - Acquisition Of Control Of Impson Freight (Pty) Ltd And Further
Cautionary
Spectrum Shipping Limited
Registration number: 1998/018118/06
Share code: SUM
ISIN: ZAE000037446
("Spectrum" or "the company")
ACQUISITION OF CONTROL OF IMPSON FREIGHT (PTY) LTD AND FURTHER CAUTIONARY
1. INTRODUCTION
River Group is authorised to announce that, following the cautionary
announcement dated 25 April 2006, which was renewed on 06 June 2006 and 26
June 2006, Spectrum has, as one indivisible transaction, with effect from 1
March 2006, and subject to the conditions precedent below, acquired the
total issued share capital of and all claims on shareholder loan accounts
against Impson Freight (Pty) Ltd, which owns and operate a comprehensive
customs clearing and forwarding logistics business with offices in Durban,
Cape Town, Johannesburg and Pietermaritzburg. ("the Acquisition /
Transaction") from Impson Freight (Natal) (Pty) Ltd, Mr. P Naidoo, Mr. G.
A. Robinson, Mr. G. W. Stay, Mr. T. K. Blond, and Mr. G. M. Knight ("the
Vendors")
2. BACKGROUND AND RATIONALE
Following the restructuring of Spectrum as detailed in the annual report
dated 31 December 2003, Spectrum has refocused its business, and has
publicly stated its intention to transform into a comprehensive
international supply chain logistics service provider utilising intelligent
"end to end" logistics solutions, and in addition offer additional services
through its five new subsidiaries:
- Spectrum Shipping NVOCC (Proprietary) Limited ("NVOCC") - a non-vessel
owner common carrier;
- Spectrum Warehousing Solutions (Proprietary) Limited ("SWS") -
providing warehousing solutions to clients;
- e-OSCI Logistics (Pty) Ltd ("e-OSCI") - providing information
technology solutions to clients;
- Supply Chain Insurance Brokers (Proprietary) Limited ("SCIB") -
providing marine and other insurance products to clients; and
- Supply Chain Financial Services (Proprietary) Limited ("SCFS") - a
financial services provider.
To this end Spectrum has entered into the above transaction to acquire and
integrate capabilities and intellectual capital that will `fast track"
systematic innovation and the successful implementation thereof.
Furthermore, the transaction will ensure that the company attains critical
mass thereby benefiting from economies of scale. Spectrum will be actively
investigating other opportunities as they come along.
3. ACQUISITION AND PURCHASE CONSIDERATION
Spectrum has entered into an arm"s length agreement with the shareholders
individually of Impson Freight (Pty) Ltd ("the Vendors") to acquire 100% of
the issued share capital in and claims on shareholder loan accounts against
Impson Freight (Pty) Ltd, with effect from 1 March 2006.
The transaction consideration payable to the vendors upon closing and after
fulfillment of the conditions precedent referred to below is the amount of
428 400 000 Spectrum shares.
The above shares will be issued as follows:
- On fulfillment of the conditions precedent below 218 400 000
shares;
- The balance of the shares will be issued within the next 60
months if Impson Freight (Pty) Ltd achieves a pre tax profit of
R10 800 000 in any of the twelve month period after the effective
date;
- If Impson Freight (Pty) Ltd, does not achieve the R10 800 000
within the first 24 months the following payment schedule will be
effected until the 210 000 000 shares are issued or the profit
warranty above is achieved, whichever the earlier:
- Month 24 - 25 200 000 shares;
- Month 36 - 25 200 000 shares;
- Month 48 - 25 200 000 shares; and
- Month 60 - 134 400 000 shares
4. SPECTRUM SHIPPING SHARE PURCHASE AND OPTION SCHEME TRUST
The board of directors have approved a further 10 000 000 shares to be
issue to Spectrum Shipping Share Purchase and option Scheme Trust in
addition to the 51 million shares currently issued to the share incentive
trust.
5. FINANCIAL EFFECTS OF THE TRANSACTIONS
The table below sets out the unaudited pro forma financial effects of the
acquisition and the additional shares to be issued to the share incentive
trust based on Spectrum"s audited results for the year ended 31 December
2005. The financial effects are presented for illustrative purposes only
and because of their nature may not give a fair reflection of Spectrum"s
results, financial position and changes in equity after the transaction.
It has been assumed for purposes of the financial effects that all the
shares relating to the acquisition (428 400 000) have been issued from day
one and the above transactions took place with effect from 1 January 2005
for income statement purposes and 31 December 2005 for balance sheet
purposes. The directors of Spectrum are responsible for the preparation of
the financial effects, which have not been reviewed by the auditors.
Actual Pro froma Percentage
"before" "after" (2) change
(1)
Gross Billings 552,436,442 1,497,030,373 171.0
Number of shares in issue 900,000,000 1,338,400,000 48.7
Earnings per share (cents) 0.2 0.6 255.5
(3)
Headline earnings per share 0.2 0.6 252.5
(cents) (3)
Net asset value per share 3.7 3.7 2.3
(cents) (4)
Net tangible asset value per 3.6 3.7 2.6
share (cents) (4)
Notes:
1. Extracted from the audited financial statements of Spectrum for the
year ended 31 December 2005. (Shareholders are reminded that 51
million shares are held by the Spectrum Shipping Share Purchase and
option Scheme Trust.)
2. Unaudited pro forma financial effects of the issue of 438 400 million
shares and the profits for 12 months of Impson Freight.
3. In relation to the pro forma earnings and headline earnings per share,
it has been assumed that the proposed transaction was effective on 1
January 2005.
4. In relation to the net asset value and net tangible asset value per
share, it was assumed that the transaction was effective on 31
December 2005.
6. CONDITIONS PRECEDENT AND OTHER REGULATORY MATTERS
The company is currently listed on the AltX board of the JSE list and this
transaction is therefore classified as a Category 3 transaction, will not
result in a change of control as none of the vendors will control more than
35% of the issued share capital, nor will any of them be or considered to
be acting in concert subsequent to the conclusion of this transaction.
The Acquisition is subject, inter alia, to the following conditions
precedent:
a. JSE approval;
b. SRP approval;
c. Competition Authority approval; and
d. Other Regulatory approvals to the extent required.
Following the successful completion of the transaction, the articles of
association of Impson Freight will be amended to the extent required to
comply with Schedule 10 of the Listing Requirements of the JSE.
7. FURTHER CAUTIONARY
Further to the cautionary announcement dated 27 June 2006, shareholders are
advised that the company is involved in discussions which may have a
material affect on the price of the company" shares. Accordingly,
shareholders are advised to continue exercising caution when dealing in
Spectrum shares until a further announcement is made.
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on
the ALTX. Shareholders are advised that the JSE does not guarantee the
viability or the success of a company listed on the ALTX. In terms of the
JSE Listings Requirements a designated advisor has to be retained by the
company. The designated advisor is required to, inter alia, attend all
board meetings held by the company to ensure that all JSE Listings
Requirements and applicable regulations are complied with, approve the
financial director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a
designated advisor it must make arrangements to appoint a new designated
advisor within 10 business days, failing which the company faces suspension
of trading of its securities. If a designated advisor is not appointed
within 30 days of its suspension the company faces the termination of its
listing without an offer to minority shareholders.
Durban
June 29, 2006
Corporate and Designated Advisor
River Group
Date: 30/06/2006 07:30:12 AM Produced by the JSE SENS Department
