| Wed 23 Aug 2006, 16:45 | | Trencor /Mobile - Capital Restructuring And Value |
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MBN TRE MOB TED2 MOBD
MOB TRE
Trencor /Mobile - Capital Restructuring And Value Enhancing Initiatives
TRENCOR LIMITED
("Trencor")
(Incorporated in the Republic of South Africa)
(Registration number 1955/002869/06)
SHARE CODE: ISIN:
TRE ZAE000007506
TED2 ZAE000007282
MOBILE INDUSTRIES LIMITED
("Mobile")
(Incorporated in the Republic of South Africa)
(Registration number 1968/014997/06)
SHARE CODE: ISIN:
MOB ZAE000004602
MBN ZAE000012274
MOBD ZAE000004610
collectively ("the group")
CAPITAL RESTRUCTURING AND VALUE ENHANCING INITIATIVES
1. Introduction
Holders of Trencor and Mobile securities are referred to the
announcement of 17 May 2006 informing them of a report at the annual
general meetings that the current group structure was being reviewed
and that, as a further step in that process, NM Rothschild & Sons had
been appointed to provide advice on opportunities to enhance value for
the group. Based on that advice, the Trencor and Mobile boards have
resolved to proceed with this process through the implementation of
proposals that will result in amendments to both Trencor"s and
Mobile"s capital structures, the adoption of dividend policy
guidelines and pursuing value enhancing initiatives.
The proposals set out in this announcement will have the effect, over
time, of reducing the number of points of entry into the group from
five to two, whilst providing shareholder stability while value
enhancing initiatives below the listed level continue to be pursued.
Following the implementation of the proposals, the merits of further
changes to the group structure will be considered from time to time as
appropriate.
2. Conversion of Mobile `N" ordinary shares
Mobile currently has two classes of shares in issue, being ordinary
shares and `N" ordinary shares, which are identical in all respects,
save for their voting rights. Upon a poll each ordinary share entitles
the holder to 100 votes and each `N" ordinary share entitles the
holder to one vote. The Mobile board is of the opinion that Mobile"s
share capital structure should be simplified by consolidating the two
classes of shares into one class. Historically the value at which
Mobile `N" ordinary shares have traded closely approximates the
trading value of the Mobile ordinary shares. Accordingly, it is
proposed that this be implemented by converting the `N" ordinary
shares to ordinary shares on a one-for-one basis. Conditional upon the
implementation of the required resolutions converting the `N" ordinary
shares to ordinary shares, it is proposed that the terms of the
ordinary shares be amended such that each ordinary share entitles the
holder thereof to one vote.
3. Dividend policy guidelines
The Trencor board has adopted a dividend policy guideline that annual
dividends should be covered about three times by sustainable adjusted
headline earnings as set out in Trencor"s financial reports, but
excluding the effect of unrealised foreign exchange translation gains
and losses.
The Mobile board has resolved that, apart from covering the
administrative costs of the company, dividends received from Trencor
should be passed through to Mobile shareholders.
4. Convertible debentures
The terms of the Trencor and Mobile convertible debentures provide for
an automatic conversion into ordinary shares on the last Friday of the
fifth month following the financial year in which annual dividends
declared equal or exceed a pre-determined level. In the case of
Trencor, each convertible debenture converts into one ordinary share
when the total dividend declared equals or exceeds 54,6 cents per
share. In the case of Mobile, each convertible debenture converts into
one ordinary and two `N" ordinary shares when the total dividend
declared equals or exceeds 4,5 cents per share. Barring unforeseen
events, dividends declared in respect of the 2006 financial year based
on the dividend policy guidelines as outlined in 3 above, are likely
to reach the levels that will trigger the automatic conversions.
Conditional upon the implementation of the required resolutions
converting the `N" ordinary shares to ordinary shares, as outlined
above, it is proposed that the terms of the Mobile convertible
debentures be amended such that each convertible debenture converts
into three Mobile ordinary shares, equivalent to what would previously
have been one ordinary and two `N" ordinary shares.
5. Value enhancement in Trencor
Trencor continues to pursue opportunities to enhance security holder
value. In addition to organic growth in Trencor"s operating companies,
a number of specific initiatives have been identified which could
involve a combination of a restructuring of the Trencor group below
the listed level, opportunities for corporate action and acquisitions.
A recent example of the latter is the acquisition by Textainer of the
Gateway container management contracts, adding some 315 000 TEU
(twenty-foot equivalent unit) to the container fleet under Textainer"s
management and making it the largest lessor-operated container fleet
in the world. Trencor continues to review alternatives for the future
of its TrenStar subsidiary.
6. Mobile documentation and general meetings
General meetings of holders of Mobile shares and convertible
debentures will be convened, as applicable, to:
- approve the conversion of the `N" ordinary shares into ordinary
shares;
- amend the voting rights of ordinary shares to one vote per ordinary
share (from 100); and
- amend the conversion rights of the convertible debentures so that
each debenture will convert into three ordinary shares instead of one
ordinary and two `N" ordinary shares.
Circulars containing full details of the capital restructuring and
convening general meetings to pass the requisite resolutions will be issued
in due course.
Cape Town
23 August 2006
www.trencor.net
www.mobile-industries.net
Financial adviser
NM Rothschild & Sons South Africa (Proprietary) Limited
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 23/08/2006 04:45:04 PM Produced by the JSE SENS Department
