|
HCI
HCI
HCI - Fulfilment Of Conditions Precedent Relating To The Acquisition
Hosken Consolidated Investments Limited
(Registration number 1973/07111/06)
(Incorporated in the Republic of South Africa)
ISIN Number: ZAE000003257 & Share Code: HCI
("HCI" or the "Company")
FULFILMENT OF CONDITIONS PRECEDENT RELATING TO THE ACQUISITION OF FABCOS
GROUP"S INTEREST IN TSOGO INVESTMENT HOLDING COMPANY (PTY) LTD BY HCI
1. Background
Further to the announcement made on 26th April 2006, HCI shareholders
are reminded that HCI had entered into agreements ("the New
Transaction Agreements") with the Trustees for the time being of the
Fabcos Trust and various companies under its control ("the Fabcos
Group") that were designed to result in HCI acquiring the Fabcos
Groups" entire remaining interest in Tsogo Investment Holding Company
(Pty) Ltd ("TIH" and "the FIH Acquisition"). Upon implementation of
the New Transaction Agreements, HCI would become the owner of 50% of
Fabcos Investment Holding Company (Pty) Ltd ("FIH" and the "FIH
Interest"). FIH in turn owns 38% of TIH. The remaining 50% of FIH is
owned by Johnnic Holdings Limited ("Johnnic"). HCI effectively holds
51% of Johnnic. The HCI group has also entered into an agreement to
acquire a further 4,6% interest in TIH, which remains subject to
certain regulatory approvals. Following the FIH Acquisition and after
all the above transactions are approved and implemented, HCI would
effectively control approximately 75% of TIH and would have an
economic interest of approximately 65% in TIH.
2. Fulfilment of remaining terms and conditions and implementation
The FIH Acquisition was subject to the approval of the relevant South
African gaming boards. Approval has been received from the KwaZulu-
Natal Gambling Board and the Eastern Cape Gambling and Betting Board.
Approvals from the Gauteng Gambling Board and the Mpumalanga Gaming
Board remain outstanding.
Following certain recent amendments to the Mpumalanga Gaming Act
(which came into operation on 1 October 2006), HCI has entered into a
further agreement with the Fabcos Group to implement the FIH
Acquisition ("the Implementation Agreement"), on the basis that the
relevant gambling legislation permits the acquisition by HCI of the
financial interest in TIH prior to making application and obtaining
the final approval of the relevant gambling boards. In terms of the
Implementation Agreement, the parties to the FIH Acquisition have
agreed to waive the condition precedent that the FIH Acquisition be
approved by the relevant gambling boards, insofar as such condition
pertains to the approval of the Mpumalanga Gaming Board and the
Gauteng Gambling Board. Accordingly, the FIH Acquisition is now
unconditional and will be implemented. As a result of obtaining
effective control of TIH, HCI will fully consolidate the assets and
liabilities and results of operations of the Tsogo Sun Group with
effect from 1 December 2006.
Notwithstanding the decision to implement the FIH Acquisition, HCI
will continue to prosecute to finality the applications currently
before the Mpumalanga Gaming Board and the Gauteng Gambling Board in
regard to the FIH Acquisition.
3. Grant of Options to Fabvest to subscribe for shares in HCI
Pursuant to the approval granted by HCI shareholders at the general
meeting on 26 July 2006, HCI entered into two option agreements with
Fabvest Investment Holdings Limited ("Fabvest"). Under the first
option agreement, Fabvest was granted an option to subscribe for 4
million new ordinary shares in the share capital of HCI at a price
equal to R36 per ordinary share if exercised before 15 May 2006.
Fabvest exercised this option on 12 May 2006, but has subsequently
indicated that it will only subscribe for 1 million ordinary shares in
HCI (as opposed to 4 million), which arrangement HCI has agreed to.
Under the second option agreement, Fabvest was granted an option to
subscribe for not less than 2 million and not more than 6 million new
ordinary shares in the share capital of HCI at a price equal to the
greater of R38 per ordinary share or 10% below the volume weighted
average price per share of HCI shares traded on the JSE Limited for
the 30 days immediately preceding the date the option is exercised.
The option could only be exercised on 26 September 2006, and Fabvest
did not exercise the option on such date. Accordingly, the second
option has lapsed.
4. Settlement of South African Revenue Services" claim against FIH
The New Transaction Agreements made provision for a potential tax
claim by the South African Revenue Services ("SARS") against FIH.
SARS brought the claim against FIH and FIH objected to the assessment.
Pursuant to the objection process, SARS and FIH reached an agreement
to substantially reduce the claim against FIH to an agreed amount,
which amount shall be paid to SARS in full and final settlement of the
claim. In terms of the New Transaction Agreements, HCI has the right
(but not the obligation) to advance to FIH the amount necessary to
enable FIH to discharge the claim and to recover such amount from
Fabvest. The New Transaction Agreements also give HCI the right to
recover such amount by way of reducing the purchase price payable by
HCI to Fabvest for the FIH Interest. HCI has elected to make payment
of the settlement amount to SARS on behalf of FIH, and to reduce the
purchase price payable to Fabvest accordingly.
29 November 2006
Sponsor
Investec Bank Limited
Corporate Advisor to HCI
HJS Advisory Services (Pty) Ltd
Date: 29/11/2006 05:16:01 PM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
