| Thu 31 Aug 2006, 11:21 | | DataPro - Sale of Call Options to Metier |
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DTP
DTP
Datapro - Sale of Call Options to Metier
DATAPRO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/016433/06)
Share code: DTP & ISIN: ZAE000058061
("DataPro" or "the company")
SALE OF CALL OPTIONS TO METIER INVESTMENT AND ADVISORY SERVICES
(PROPRIETARY) LIMITED ("Metier")
1. Introduction
Following an offer from Metier to purchase call options held by
DataPro dated 07 August 2006, the board of directors has agreed to
accept the offer with immediate effect, and details are provided
below.
On 17 January 2006, the company acquired the business of Netralink
(Pty) Limited ("Netralink"). The consideration was settled by the
issue to Netralink of 18 500 000 ordinary shares at 55 cents per
share, against which DataPro retained a European call option,
exercisable up to 31 August 2007 at 55 cents per share ("the Netralink
call option"). The agreement also provided for a loan of R5.617
million to Netralink to settle its liabilities. The loan bears
interest at 6% per annum and is repayable by 01 January 2007 ("the
Netralink loan").
Likewise, in terms of the acquisition of Atlantic Internet (Pty)
Limited ("Atlantic"), DataPro retained a European call option against
14 231 499 shares held by Cornelius Fourie ("Fourie") at 52.7 cents
per share, exercisable up to 31 August 2007 ("Atlantic call option").
Fourie moreover retained an American put option against the Company,
to be settled by the transfer of 16.67% of the shares in Atlantic,
subject to certain conditions ("Atlantic put option").
The primary rationale for the call options was to be able to
ultimately place the underlying shares with a strategic partner and
shareholder. Although Metier is a related party to DataPro, being an
advisor with a shareholding in the company, the transaction does not
require shareholder approval in accordance with the provisions of the
JSE Listings Requirements relating to companies listed on the
Alternative Exchange.
In considering the offer from Metier, the board of directors
considered both quantitative and qualitative matters and, at the time
of the response to the offer, the cost to Metier of the price for the
option and the call option strike price approximated a 5% discount to
the 30 day weighted average price. The board was of the opinion that
the transaction achieved the original objectives at the time of
entering into the call options and the terms and conditions of the
transaction were fair and reasonable to DataPro.
2. Terms of transaction
Netralink Call Option
The consideration for the Netralink call option is R1 248 750 in cash,
subject to the condition that Metier and / or its nominee immediately
exercises the option. The Netralink loan will immediately be repaid
to DataPro, thereby increasing the cash reserves of the company.
Atlantic Call Option
The consideration for the Atlantic call option is R1 648 008 in cash,
subject to the condition that Metier and / or its nominee immediately
exercises the option. The Atlantic put option liability will be
eliminated as a result.
The proceeds received on the sale of the call options will accrue to
DataPro.
3. Financial effects
The tables below sets out the pro-forma financial effects of the sale
of the call options on the reviewed, published interim financial
results of DataPro for the six months ended 28 February 2006. The
financial information, which is the responsibility of the directors,
has been prepared for illustrative purposes only and does not
necessarily fairly present the company"s financial position, statement
of changes in equity, results of operations or cash flows.
Netralink
Fully diluted information Reviewed Pro Forma %
28 February after sale Change
2006 "After"
"Before"(1)
Earnings per share (cents) 1.52 1.53 0.4%
(2)
Headline earnings per share 1.16 1.17 0.6%
(cents) (2)
Net asset value per share 32.02 30.62 -4.4%
(cents) (3)
Net tangible asset value per 0.06 0.43 614.7%
share (cents) (3)
Weighted average number of 306 371 306 371 --%
shares in issue (`000)
Shares in issue at period end 315 135 335 164 5.9%
(`000)
Notes:
1. The `before" financial information is based on fully diluted
information as detailed in the published interim results for the
six months ended 28 February 2006.
2. The earnings per share and headline earnings per share in the
"Pro-forma after the sale" column were calculated on the
assumption that the sale of the Netralink call option took place
with effect from 01 September 2005 and interest, after taxation
at a rate of 7.81% was earned on the proceeds, on the basis that
the company will apply the funds received on the sale of the call
option to reduction of debt. In addition, it has been assumed
that the interest on the Netralink loan (after taxation) would
not have accrued for the two month period from 01 January 2006.
The proceeds on the repayment of the Netralink loan will be
placed on call or in a money market account until required for
working capital or to facilitate acquisitive growth of the
business. Due to the uncertainty regarding the future
application of these funds, no effect on earnings or headline
earnings per share has been calculated.
3. The net asset value and net tangible asset value per share
information is based on the assumption that the Netralink call
option was sold on 28 February 2006.
4. The shares in issue at period end did not include the issue of 18
500 000 shares in Netralink, which has been adjusted for in these
calculations.
Atlantic
Fully diluted information Reviewed Pro Forma % Change
28 February after sale
2006 "After"
"Before"(1)
Earnings per share (cents) 1.52 1.55 -1.2%
(2)
Headline earnings per share 1.16 1.19 -0.3%
(cents) (2)
Net asset value per share 32.02 33.04 3.2%
(cents) (4)
Net tangible asset value per 0.06 0.56 1 774.9%
share (cents) (4)
Weighted average number of 306 371 320 602 4.65%
shares in issue (`000) (3)
Shares in issue at period end 315 135 315 135 --%
(`000)
Notes:
1. The `before" financial information is based on fully diluted
information as detailed in the published interim results for the
six months ended 28 February 2006.
2. The earnings per share and headline earnings per share in the
"Pro-forma after the sale" column were calculated on the
assumption that the sale of the Atlantic call option took place
with effect from 01 September 2005 and interest, after taxation
at a rate of 7.81% was earned on the proceeds, on the basis that
the company will apply the funds received on the sale of the call
option to reduction of debt. In addition, the charge during the
period for the financial liability relating to the put option has
been eliminated.
3. The weighted average number of shares in issue for the period has
been adjusted to eliminate the effect of accounting for the put
option shares in accordance
4. The net asset value and net tangible asset value per share
information is based on the assumption that the Atlantic call
option was sold on 28 February 2006. In addition, the financial
liability in relation to the put option has been eliminated from
the balance sheet.
5. Rationale for sale of the call options
This transaction allow for the placement of shares with a value adding
shareholder supportive of the DataPro vision and opportunity, without
dilution to existing shareholders. In addition, this transaction
results in the elimination of obligations of the Company and the
introduction of further cash to be utilised for reduction of debt and
in the growth of operations.
In accordance with AltX Listings Requirements, shareholders are
advised of the risks of investing in a company listed on AltX and that
the JSE does not guarantee the viability or the success of a company
listed on AltX. In terms of 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 arrangement 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 minorities.
Johannesburg
28 August 2006
___________________________________________________________________________
Designated Advisor
Arcay Corporate Services
Date: 31/08/2006 11:21:11 AM Produced by the JSE SENS Department
