Go Back Email this Link to a friend

Proposed Acquisition By Sasol Chemical Industries

Release Date: 02/08/1999 08:14:45      Code(s): AFE AFEPAED5
AECI LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 04/02590/06)
("AECI")
PROPOSED ACQUISITION BY SASOL CHEMICAL INDUSTRIES LIMITED ("SCI") OF ALL OF THE
SHARES IN POLIFIN LIMITED OTHER THAN THOSE ALREADY OWNED BY SCI
INTRODUCTION
FURTHER TO THE CAUTIONARY ANNOUNCEMENT DATED 1 JULY 1999, SHAREHOLDERS OF AECI
("AECI SHAREHOLDERS") ARE ADVISED THAT SCI, A WHOLLY OWNED SUBSIDIARY OF SASOL
LIMITED ("SASOL"), WILL, SUBJECT TO THE FULFILMENT OF CERTAIN CONDITIONS
PRECEDENT, MAKE AN OFFER TO ACQUIRE ALL OF THE SHARES IN POLIFIN LIMITED
("POLIFIN") WHICH ARE NOT ALREADY HELD BY SCI, INCLUDING THE 220 118 051
ORDINARY SHARES IN POLIFIN HELD BY AECI, WITH EFFECT FROM 26 JUNE 1999, (THE
"OFFER"). AECI SHAREHOLDERS ARE REFERRED TO THE ANNOUNCEMENT MADE BY SASOL
DATED 2 AUGUST 1999 WHICH GIVES FURTHER DETAILS OF THE OFFER.
DESCRIPTION OF POLIFIN
POLIFIN, A COMPANY LISTED ON THE JOHANNESBURG STOCK EXCHANGE, IS THE LEADING
SOUTH AFRICAN PRODUCER OF MONOMERS (ETHYLENE AND PROPYLENE), POLYMERS
(POLYETHYLENE, POLYPROPYLENE AND POLYVINYL CHLORIDE), CHLOR-ALKALI CHEMICALS,
MINING REAGENTS AND RELATED PRODUCTS. FOR THE YEAR ENDED 25 JUNE 1999, POLIFIN
REPORTED ATTRIBUTABLE EARNINGS OF R389 MILLION ON TURNOVER OF R3 708 MILLION.
AS AT 25 JUNE 1999, POLIFIN HAD SHAREHOLDERS' EQUITY OF
R2 390 MILLION. AECI CURRENTLY HAS A 40% SHAREHOLDING IN POLIFIN AND SCI A
50,15% SHAREHOLDING.
SALIENT TERMS OF THE OFFER
IN TERMS OF THE OFFER, SCI WILL ACQUIRE ALL OF THE ORDINARY SHARES IN POLIFIN
("POLIFIN SHARES") AT A PRICE OF 970 CENTS PER POLIFIN SHARE AND, AS A RESULT,
AECI WILL RECEIVE APPROXIMATELY R2 135 MILLION.
IN ADDITION, INTEREST IS PAYABLE BY SCI ON THE OFFER PRICE WITH EFFECT FROM 26
JUNE 1999 TO THE DATE UPON WHICH PAYMENT IS MADE IN TERMS OF THE OFFER.
INTEREST IS PAYABLE AT AN ANNUALISED RATE OF 16,5% UNTIL 26 NOVEMBER 1999, AND
THEREAFTER, AT THE DAILY REPURCHASE AGREEMENT RATE BETWEEN THE SOUTH AFRICAN
RESERVE BANK AND THE BANKS.
THE PROPOSED DISPOSAL IN TERMS OF THE OFFER IS EX THE FINAL DIVIDEND OF 17
CENTS PER SHARE DECLARED BY POLIFIN FOR THE FINANCIAL YEAR ENDED 25 JUNE 1999,
WHICH WILL BE PAID TO POLIFIN SHAREHOLDERS, INCLUDING AECI, ON OR ABOUT 23
SEPTEMBER 1999.
THE MECHANICS TO BE ADOPTED IN TERMS OF THE OFFER WILL BE ANNOUNCED AS SOON AS
A FINAL DECISION HAS BEEN MADE IN THIS REGARD. AECI HAS GIVEN AN UNDERTAKING TO
SUPPORT THE OFFER IN RESPECT OF ITS 40% SHAREHOLDING IN POLIFIN.
RATIONALE FOR THE PROPOSED DISPOSAL BY AECI IN TERMS OF THE OFFER
A TRANSFORMATION STRATEGY FOR AECI WAS COMMUNICATED TO AECI SHAREHOLDERS ON 21
OCTOBER 1998. THE STRATEGY INCLUDED THE EXIT FROM HIGH CAPITAL, CONTINUOUS
PROCESS COMMODITY CHEMICAL BUSINESSES. SPECIFIC MENTION WAS MADE THAT AECI MAY
CONSIDER DIVESTING FROM POLIFIN, WHICH FALLS INTO THIS CATEGORY.
THE PROPOSED DISPOSAL OF AECI'S INTEREST IN POLIFIN IS CONSISTENT WITH ITS
STATED STRATEGY AND IS A MAJOR ENABLING STEP IN THE TRANSFORMATION PROCESS. THE
PROPOSED DISPOSAL WILL REDUCE AECI'S DEBT AND SHOULD UNLOCK VALUE FOR
SHAREHOLDERS.
FINANCIAL EFFECTS
THE PRO FORMA FINANCIAL EFFECTS OF THE PROPOSED DISPOSAL ON AECI'S HEADLINE
EARNINGS PER SHARE FOR THE YEAR ENDED 31 DECEMBER 1998, AND AECI'S NET ASSET
VALUE AS AT 31 DECEMBER 1998, ARE SET OUT BELOW:
                                          BEFORE      AFTER       PERCENTAGE
                                          DISPOSAL    DISPOSAL    CHANGE
HEADLINE EARNINGS PER SHARE (CENTS)       134         197         47%
NET ASSET VALUE PER SHARE (CENTS)         1 886       2 840       51%
THE FOLLOWING ASSUMPTIONS WERE USED IN THE ABOVE CALCULATIONS:
* THE EFFECTIVE DATE OF THE PROPOSED DISPOSAL IS 1 JANUARY 1998;
* THE CONSIDERATION IS USED TO REPAY AECI'S DEBT AS AT 1 JANUARY 1998 AND THE
BALANCE INVESTED IN MONEY MARKET INSTRUMENTS; AND
* THE INTEREST RATES RULING DURING THE PERIOD FROM 1 JANUARY 1998 TO 31
DECEMBER 1998.
APPLICATION OF OFFER CONSIDERATION
THE CONSIDERATION TO BE RECEIVED BY AECI WILL BE APPLIED IN REDUCING AECI'S NET
DEBT, WHICH AMOUNTED TO APPROXIMATELY R1 728 MILLION AS AT 30 JUNE 1999, AND
FURTHER CONSIDERATION WILL BE GIVEN TO THE GEARING OF AECI AND THE FUTURE
DEPLOYMENT OF FUNDS IN THE BEST INTERESTS OF AECI SHAREHOLDERS.
CONDITIONS PRECEDENT
THE PROPOSED DISPOSAL IS CONDITIONAL, INTER ALIA, UPON THE APPROVAL OF THE AECI
SHAREHOLDERS IN GENERAL MEETING. ANGLO AMERICAN CORPORATION OF SOUTH AFRICA
LIMITED, BEING THE OWNER OF APPROXIMATELY 53% OF AECI'S ORDINARY SHARE CAPITAL,
HAS UNDERTAKEN TO VOTE IN FAVOUR OF THE RESOLUTIONS NECESSARY TO GIVE EFFECT TO
THE DISPOSAL.
CIRCULAR
A CIRCULAR SETTING OUT FULL DETAILS OF THE PROPOSED DISPOSAL AND CONVENING A
GENERAL MEETING OF AECI SHAREHOLDERS WILL BE POSTED TO AECI SHAREHOLDERS AS
SOON AS POSSIBLE.
SANDTON
2 AUGUST 1999
FINANCIAL ADVISER
ROBERT FLEMING SOUTH AFRICA LIMITED
REGISTRATION NUMBER 95/11812/06
LEGAL ADVISER
DENEYS REITZ INC.
REG. NO. 84/03385/14



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.