| Mon 14 Aug 2006, 12:14 | | Digcore disposes of 30% of its branch distribution |
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DGC
DGC
Digcore disposes of 30% of its branch distribution business to BEE parties
DIGICORE HOLDINGS LIMITED
Registration number: 1998/012601/06
Share Code: DGC
ISIN Number: ZAE000016945
("DigiCore")
Digicore Disposes of 30% of its branch distribution business to BEE parties
1. INTRODUCTION
1.1 Shareholders are advised that Digicore Fleet Management (Pty) Limited
("DFM"), a wholly-owned subsidiary of DigiCore, has disposed of its branch
distribution business of supplying fleet management services to the South
African transport industry ("the Business") to Digicore Lectro Track (Pty)
Limited ("Lectro Track"), a fellow subsidiary which is 70% held by
DigiCore, for a total consideration of R124 million ("the Disposal").
1.2 The Disposal referred to in 1.1 above, constitutes a category 3
transaction in terms of the Listings Requirements of the JSE Limited
("JSE"). This announcement is for information purposes only and no action
is required by DigiCore shareholders with regards to the transaction.
1.3 The 30% in Lectro Track not held by DigiCore is held by the following
two entities: Amabubesi Investments (Pty) Limited holds 17,4% and Western
Breeze Trading 135 (Pty) Limited holds 12,6% ("Western Breeze").
2. DETAILS OF THE BUSINESS
The Business supplies fleet management services to the South African
transport industry and related activities. Through its service centres and
branch network it installs and distributes a number of products, such as
the various C-Track units, Co-Driver and other fleet management related
products. It also provides technical support to customers.
3. RATIONALE FOR THE DISPOSAL
As a result of Lectro Track being 30% BEE owned, DigiCore is expected to
benefit through Lectro Track assisting senior management in identifying
business opportunities and growing its market share in both the corporate
and public sectors.
4. RELATED PARTY TRANSACTION
Mr Nhanhla Gasa, a director of DigiCore, is also a director and shareholder
of Western Breeze. In terms of the Listings Requirements of the JSE the
disposal is regarded as a small related party transaction and requires
written confirmation from an independent professional expert confirming the
fairness and reasonableness of the terms of the disposal to DigiCore
shareholders ("the fair and reasonable opinion").
Accordingly, DigiCore has appointed PSG Capital Limited ("PSG") as the
independent professional expert in accordance with paragraph 10.7(b) of the
JSE Listings Requirements. PSG has provided the JSE with written
confirmation that the terms of the disposal are fair and reasonable to
Digicore shareholders. The fair and reasonable opinion will lie open for
inspection at the registered office of DigiCore for a period of 28 days
from the date of publication of this announcement.
5. PARTICULARS OF THE DISPOSAL
5.1 Subject matter of the disposal
The Business is sold as a going concern and comprises all assets and
liabilities relating to such business. The Business has a net asset value
of R8 million.
5.2 Disposal consideration
The total disposal consideration of R124 million will be settled by the
creation of an interest bearing loan account due to DFM by Lectro Track.
The loan is repayable over a maximum period of 7,5 years and will bear
interest at prime. The transaction proceeds will only become available over
the next 7,5 years and will be applied in the normal course of business.
6. EFFECTIVE DATE
The effective date of the transaction is 1 July 2006.
7. SUSPENSIVE CONDITIONS
The disposal is not subject to any unfulfilled suspensive conditions.
8. FINANCIAL EFFECTS
The pro forma financial effects of the transaction are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of DigiCore"s financial position nor of the effect on future
earnings after the transaction. Set out below are the unaudited pro forma
financial effects of the transaction, based on the unaudited consolidated
financial results of DigiCore for the six months ended 31 December 2005.
The directors are responsible for these pro forma financial effects.
Unaudited Pro forma Change
Before the After the (%)
Disposal Disposal
(cents) (cents)
Earnings per share 11,5 11,1 (3,5)
Headline earnings per share 11,3 11,0 (2,7)
Net asset value per share 76,3 76,3 Nil
Net tangible asset value per share 51,2 51,2 Nil
Notes:
1. The earnings and headline earnings per share figures in the "Pro forma
After the transaction" column have been calculated on the basis that
the transaction was effected on 1 July 2005.
2. The net asset value and net tangible asset value per share figures in
the "Pro forma After the transaction" column have been calculated on
the basis that the transaction was effected on 31 December 2005.
Pretoria
14 August 2006
PSG Capital Limited
Sponsor to DigiCore
Date: 14/08/2006 12:14:19 PM Produced by the JSE SENS Department
