| Fri 4 Aug 2006, 17:00 | | Conduit Capital - Financial Effects and Withdrawal |
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CND
CND
Conduit Capital - Financial Effects and Withdrawal of Cautionary
Conduit Capital Limited
(formerly IMR Investments Limited)
Incorporated in the Republic of South Africa
(Registration number 1998/017351/06)
Share code: CND & ISIN: ZAE000073128
("Conduit Capital" or "the company" or "the group")
FINANCIAL EFFECTS OF CICL INVESTMENT HOLDINGS (PROPRIETARY) LIMITED ("CICL")
TRANSACTION AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the previous announcements in relation to the
acquisition by Conduit Capital of a significant controlling interest in
CICL. The table below sets out the pro forma financial effects of the CICL
transaction, together with the specific issue of shares for cash being
undertaken in order partly to fund the CICL transaction (collectively "the
transactions"), on the historical earnings, headline earnings, net asset
value and tangible net asset value per share, based on the company"s results
for the six month period ended 28 February 2006. The pro forma financial
effects have been prepared for illustrative purposes only, to provide
information on how the transactions may have impacted on the historical
results and financial position of the company. Because of their nature, the
pro forma financial effects may not give a fair reflection of the company"s
financial position after the transactions, or the effect of the transactions
on the company"s future earnings. The calculation of the pro forma financial
effects is the responsibility of the directors.
6 months 6 months pro Change after
historical forma after the
before the the transactions
transactions transactions (%)
(cents) (cents)
Loss per share ("LPS") (25.04) (7.23) 71.13%
Headline (loss)/earnings per (0.29) 3.80 1 410.34%
share ("HEPS")
Net asset value ("NAV") per 15.25 53.57 251.28%
share
Tangible net asset value 7.06 35.92 408.78%
("TNAV") per share
Notes and assumptions used in generating the pro forma accounts for the
transactions:
1. The direct costs associated with the acquisition of CICL were
added to the purchase consideration, resulting in an increase in
goodwill. No impairment provision has been raised against the
goodwill arising on the acquisition of CICL as the business is
expected to generate income to support the carrying value of the
goodwill.
2. LPS and HEPS, as set out in the "6 months historical before the
transactions" column, are based on the reviewed income statement
of Conduit Capital for the six months ended 28 February 2006
(which is based on Conduit Capital"s reviewed income statement for
the year ended 28 February 2006, less the figures contained in
Conduit Capital"s unaudited income statement for the six months
ended 31 August 2005) and a weighted average number of 89 986 307
shares in issue.
3. LPS and HEPS, as set out in the "6 months pro forma after the
transactions" column, are based on the reviewed consolidated
income statements of Conduit Capital (calculated as in 2 above)
and CICL for the six months ended 28 February 2006, the results
from the specific issue of shares for cash and the third party
funding obtained in order partly to fund the CICL transaction
("capital raising"), the capitalisation of Black Ginger 92
(Proprietary) Limited ("Black Ginger")("the funding"), a weighted
average number of 202 024 271 shares in issue and on the
assumptions that:
3.1 all transactions were effective on 1 September 2005;
3.2 the cash portion of the purchase consideration and the amount
used to fund Black Ginger were paid from the capital that was
raised and the interest that was received on the difference
between the capital that was raised and the cost of the
acquisition/funding, was calculated at an after tax rate of
3.91% per annum for the six months ended 28 February 2006;
and
3.3 total transaction costs of R1 537 539 were incurred as a
result of the CICL transaction and the capital raising
exercise. An amount of R1 257 444 has been capitalised as per
1 above and R280 095, relating to the cost of issuing the
consideration shares in respect of the acquisition and the
specific issue of shares for cash, has been written off
against share premium.
4. NAV and TNAV per share, as set out in the "6 month historical
before the transactions" column, are based on the reviewed balance
sheet of Conduit Capital as at 28 February 2006 and 131 720 555
shares in issue.
5. NAV and TNAV per share, as set out in the "6 month pro forma after
the transactions" column, are based on the reviewed consolidated
balance sheets of Conduit Capital and CICL at 28 February 2006,
243 758 519 shares in issue and the assumptions that -
5.1 the CICL transaction became effective on 28 February 2006 at
100 cents per share, which was Conduit Capital"s share price
on the date on which the financial effects of the acquisition
were released, being 4 August 2006;
5.2 the specific issue of shares for cash became effective on 28
February 2006 at 100 cents per share;
5.3 the capital raising became effective on 28 February 2006; and
5.4 the funding became effective on 28 February 2006.
6. For purposes of calculating the number of consideration shares
that Conduit Capital will pay to Black Ginger, it has been assumed
that the unencumbered portion of the shares that Black Ginger owns
in CICL is 4.79% of the total issued share capital of CICL, which
the group will acquire by issuing 8 274 328 consideration shares
to Black Ginger.
CIRCULAR AND WITHDRAWAL OF CAUTIONARY
A circular containing more detail in relation to the transactions and
incorporating notices of general meetings will be sent to Conduit Capital
shareholders on Tuesday, 8 August 2006. Caution is no longer required to be
exercised by shareholders when dealing in their securities.
Melrose Arch
4 August 2006
Corporate advisor, legal advisor and transaction sponsor
Java Capital (Proprietary) Limited
Lead sponsor
Merchant Sponsors (Proprietary) Limited
Independent reporting accountants
Grant Thornton
Chartered Accountants (SA)
Date: 04/08/2006 05:00:25 PM Produced by the JSE SENS Department
