| Fri 20 Oct 2006, 16:45 | | Simeka BSG - ITQ Acquisition: Variations of Terms |
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SBG
SBG
Simeka BSG - ITQ Acquisition: Variations of Terms
Simeka BSG Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
(formerly Xantium Technology Holdings Limited)
Share code: SBG & ISIN code: ZAE000074878
("Simeka BSG" or "the company")
ITQ ACQUISITION: VARIATIONS OF TERMS
Shareholders are referred to the announcements of 20 July and 23 May 2005
regarding the company"s acquisition of 100% of the issued shares of ITQ
(Proprietary) Limited ("ITQ") and Finfleet (Proprietary) Limited
("Finfleet"), referred to as the ITQ acquisition. The pricing and payment
terms and conditions of the ITQ acquisition have been revised as set out
below.
As per the original announcement, on implementation an initial amount of R9
million was paid, R6,5 million in cash and R2,5 million in shares issued at
53 cents per share. Upon achievement of the March 2006 profit warranty of
R7 million, a further payment of R12,4 million was paid of which R8,860,000
was in cash and R3,720,000 in shares at 70 cents per share.
The remaining payments were:
* Based on a profit warranty for the period ended 31 March 2007 a
payment of R9,3 million comprising 3 282 353 shares at 85 cents per
share and the balance of R6,51 million in cash; and
* Based on a profit warranty for the period ended 31 March 2008 a
payment of R9,3 million comprising 2 990 000 shares at 1.00 cents per
share and the balance of R6,31 million in cash such shares to be
issued by 31 March 2008; and
* A potential further amount equal to 30% of profits for the period
ending 30 May 2007,
equating to a total outstanding liability to the vendors of R20,956,177
In light of the exceptional performance of the ITQ business and its
securing of contractual revenue negotiations were entered into with the
vendors in regard to waiving the profit warranties and adjusting the
purchase price.
The outcome of these discussions and negotiations is that a binding
arrangement has been entered into in terms of which all remaining profit
warranties are waived and the following payments are due to the vendors in
full settlement of all remaining obligations of the company:
* a cash payment of R18 million payable by 31 October 2006, of which
R2,5 million has already been paid; and
* the issue of 3 million shares at 50 cents per share, such shares to be
issued by 30 June 2007.
The directors are of the view that the above arrangement is to the
advantage of the company in that it reduces the obligation to issue shares
to vendors and is thereby less dilutionary of future earnings and
furthermore preserves the BEE shareholding of the company.
In addition, with the waiver of the profit warranties and the settlement in
full of the ITQ vendor liabilities, the group is now able to extract
operational synergies from the consolidation of ITQ into the Consulting and
Application Implementation pillars.
The revised pro forma financial effects of the ITQ acquisition set out in
the table below are the responsibility of the company"s directors and have
been prepared for illustrative purposes only, to show how the terms of the
ITQ acquisition, varied as described above, would have affected Simeka
BSG"s results for the financial year ended 31 May 2006. As such, the
revised pro forma financial effects may not give a fair reflection of the
financial position and results of operations of Simeka BSG after
implementation of the variations to the terms of the ITQ acquisition.
Before After Percentage
Change
Net tangible asset value per (2,99) (4,91) (64,1)
share (cents)
Notes:
* The "Before" column is the NTAV as disclosed in Simeka BSG"s results
for the financial year ended 31 May 2006;
* The "After" column reflects what the NTAV would have been at 31 May
2006 had the variation to the terms of the ITQ acquisition taken place
on 31 May 2006;
* The effect of the variation to the terms of the ITQ acquisition on
earnings per share, headline earnings per share and net asset value
per share for the financial year ended 31 May 2006 is immaterial;
* The calculation in the "After" column is based on 345 946 000 shares
in issue.
Rosebank
20 October 2006
Designated advisor to Simeka BSG Limited
Java Capital (Proprietary) Limited
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on
the ALTX. Shareholders are advised that the JSE does not guarantee the
viability or the success of a company listed on the ALTX. In terms of the
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 the
designated advisor it must make arrangements 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 minority shareholders.
Date: 20/10/2006 04:45:07 PM Produced by the JSE SENS Department
