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LAB
LAB
Labat - Listing Of Labat Traffic Solutions, Acquisition Of Minority Interests,
Introduction Of Strategic 25% Bee Shareholder And Renewal Of Cautionary
Labat Africa Limited
Incorporated in the Republic of South Africa
(Registration Number 1986/001616/06)
Share code: LAB ISIN: ZAE000018354
("Labat" or "the group")
LISTING OF LABAT TRAFFIC SOLUTIONS, ACQUISITION OF MINORITY INTERESTS,
INTRODUCTION OF STRATEGIC 25% BEE SHAREHOLDER AND RENEWAL OF CAUTIONARY
1. Introduction
The acquisitions of the minority interests, set out hereafter, are pursuant
to the board of Labat"s intention to extract maximum shareholder value
through a separate listing of Labat Traffic Solutions (Proprietary) Limited
("LTS"). LTS, an unlisted subsidiary of Labat, has concluded acquisition
agreements to acquire the minority interests in LTS and Traffic Computer
Services (Proprietary) Limited ("TCS"), a wholly-owned subsidiary of LTS.
2. Background to LTS
LTS is an Information Technology and Communications company that generates
and processes data on behalf of clients by utilising its sophisticated
technology and intellectual property. LTS is focused on the government
sector, in which it is strong at the municipal level.
3. Acquisitions by LTS
Agreement has been reached between LTS and its minority shareholders
(being, The Suikerbos Trust and Pharoah Limited) in terms of which LTS will
acquire 49% of its shares for R28 million in cash. The effective date of
this acquisition is 31 August 2006.
Furthermore, LTS will acquire 49% of the issued share capital that it does
not already own in TCS from Jacobus Hermanus Taljaard and the Birkholtz
Family Trust for R24 million in cash, with an additional R6 million
deferred payment over three years, subject to certain warranties. The
effective date of this acquisition is 31 March 2006.
4. Funding by strategic shareholder
LTS has reached agreement with Ice-Breakers 101 (Proprietary) Limited
whereby it will raise a combination of preference and ordinary share and
debt funding which will be set out more fully in a circular to Labat
shareholders. These acquisitions are conditional upon the requisite
regulatory and shareholders approval.
5. The proposed listing of LTS
The board has been considering a number of strategic alternatives with
regard to the optimal future structure of the group in order to maximize
shareholder value. To this end it is intended to list the LTS business
following the acquisitions as a separate entity on the Alternative Exchange
of JSE Limited ("JSE").
6. Related party
The minority shareholders in LTS and TCS each hold 49% and are therefore
regarded as major shareholders. Accordingly, both acquisitions constitute
related party transactions in terms of the Listings Requirements of the JSE
and require fair and reasonable opinions which will be set out in the
circular to Labat shareholders.
7. Pro forma financial effects of the acquisitions
The acquisitions will have a material financial impact on Labat, however
the pro forma financial effects of the acquisitions can only be determined
once the terms of the funding have been finalised.
8. Further documentation and renewal of cautionary
The circular containing full details of the acquisitions and incorporating
a notice of general meeting will be sent to Labat shareholders in due
course.
Shareholders are advised that Labat is still involved in negotiations
which, if successfully concluded, may have a material effect on the price
at which Labat"s shares trade. Accordingly, shareholders are advised to
continue to exercise caution when trading in Labat shares on the JSE until
a further announcement is made.
30 August 2006
Sponsor
Merchant Sponsors (Proprietary) Limited
Date: 30/08/2006 05:07:12 PM Produced by the JSE SENS Department
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