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NCS
NCS
Nictus - Acquisition of remaining interest in Futeni
Nictus Limited
("Nictus")
(Incorporated in South Africa)
(Registration number 1981/001858/06)
JSE Share Code: NCS
NSX Share Code: NCT
ISIN Number: NA0009123481
ACQUISITION OF REMAINING INTEREST IN FUTENI COLLECTIONS (PROPRIETARY) LIMITED
Introduction
Corporate Guarantee and Insurance Company of Namibia Limited ("CGI"), a
wholly-owned subsidiary of Nictus, has entered into a sale of shares and
cession of claims agreement (the "agreement") to acquire the remaining 35%
ordinary shares (the "acquisition") in Futeni Collections (Proprietary)
Limited ("Futeni"). The remaining interest is being acquired from the
Government Institutions Pension Fund ("GIPF"). The effective date of the
acquisition was 1 September 2006.
Nature of the business
The main business of Futeni is that of collecting of non-performing book
debts.
Rationale
Futeni operates within the financial services sector in Namibia and its
business operations are complementary to the activities of the Nictus group
of companies. The transaction was undertaken in order to facilitate growth
in earnings and shareholder value.
Related party transaction
In terms of section 10 of the Listing Requirements of the JSE Limited (the
"JSE"), the acquisition is classified as a related party transaction as GIPF
is a material shareholder of Futeni. The acquisition is not regarded as a
small related party transaction and therefore requires shareholder approval
in general meeting. A circular will be distributed to shareholders in due
course.
Terms and conditions
Purchase consideration
The acquisition is for an aggregate purchase consideration of R1 750 000
payable in cash, subject to the terms and conditions of the agreement. CGI
has acquired the shares and loan account together with any claims in Futeni
on a going concern basis. Following the acquisition of the remaining 35%
ordinary shares, Futeni has become a wholly-owned subsidiary of the company.
Conditions precedent
All the conditions precedent of this transaction has been met other than
obtaining shareholder approval in general meeting as stated above.
Warranties and indemnities
The warranties and indemnities usual in transactions of this nature have been
made between the parties.
Financial effects
The table below sets out the unaudited pro forma financial effects of the
acquisition on Nictus. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of Nictus results, financial position and changes in
equity after the acquisition. The unaudited pro forma financial effects are
the responsibility of the directors. It has been assumed for purposes of the
unaudited pro forma financial effects that the acquisition took place on 1
April 2005 for income statement purposes and 31 March 2006 for balance sheet
purposes.
Before After (Decrease)
Published Pro forma % Increase
Earnings per share (cents) 5.62 8.61 53%
Headline earnings per share (cents) 5.34 6.41 20%
Weighted average number of shares in
issue (`000) 53,443 53,443 -
1. The "Before" financial information is based on Nictus" published results
for the year ended 31 March 2006.
2. The "After" earnings and headline earnings per share have been adjusted
for the following:
- interest at an after tax rate of 7.31% has been foregone in respect
of the purchase consideration;
- the minority interest attributable to the 35% shareholding in
Futeni has been reversed; and
- the negative goodwill arising on the acquisition of R1 022 000 has
been included.
3. The "After" headline earnings per share have been further adjusted to
exclude the negative goodwill arising on the acquisition of R1 022 000.
4. The net asset value of the 35% interest being acquired as at 31 March
2006 was R2 772 306.
The effect of the acquisition on the net asset value and net tangible asset
value of Nictus is not significant. Significant in this context is defined as
meaning a change of less than 3%.
Categorisation of the acquisition
The acquisition has been categorised as a Category 3 transaction in terms of
section 9.5(a) of the JSE Listings Requirements.
Johannesburg
28 November 2006
Sponsor on the JSE: KPMG Services (Pty) Ltd
Sponsor on the NSX: Namibia Equity Brokers (Pty) Ltd
Date: 28/11/2006 04:30:04 PM Produced by the JSE SENS Department
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