Go Back Email this Link to a friend

Aeci - Proposed Specific Repurchase Of Shares In Aeci

Release Date: 11/12/2000 08:00:30      Code(s): AFE AFEP
AECI LIMITED
(REGISTRATION NUMBER  1924/002590/06)
("AECI" OR "THE COMPANY")
PROPOSED SPECIFIC REPURCHASE OF SHARES IN AECI
INTRODUCTION
FURTHER TO THE CAUTIONARY ANNOUNCEMENT DATED 22 NOVEMBER 2000, CHASE IS
AUTHORISED TO ANNOUNCE THAT THE BOARD OF DIRECTORS OF AECI (THE "DIRECTORS")
HAS REACHED AGREEMENT WITH ANGLO SOUTH AFRICA (PROPRIETARY) LIMITED ("ANGLO")
REGARDING THE REPURCHASE FROM ANGLO OF 40% OF THE ENTIRE ISSUED ORDINARY SHARE
CAPITAL OF AECI (THE "SPECIFIC REPURCHASE") IN TERMS OF SECTIONS 85 AND 89 OF
THE COMPANIES ACT (ACT 61 OF 1973) AS AMENDED, AND THE LISTINGS REQUIREMENTS OF
THE JSE SECURITIES EXCHANGE SOUTH AFRICA ("JSE").
RATIONALE
ANGLO, A WHOLLY-OWNED SUBSIDIARY OF ANGLO AMERICAN PLC ("ANGLO AMERICAN"),
CURRENTLY HOLDS 53% OF THE ISSUED ORDINARY SHARE CAPITAL OF AECI.  FOLLOWING
ANGLO AMERICAN'S STATED INTENTION TO DIVEST FROM ITS NON-CORE INTERESTS,
INCLUDING ITS INVESTMENT IN AECI, THE DIRECTORS AND ANGLO HAVE CONSIDERED A
NUMBER OF PROPOSALS AIMED AT EFFECTING AN ORDERLY DISPOSAL BY ANGLO OF ITS
HOLDING IN AECI WHILST DELIVERING OPTIMAL SHAREHOLDER VALUE. THE PROPOSED
SPECIFIC REPURCHASE IS SEEN AS THE BEST ALTERNATIVE AND THE DIRECTORS ARE OF
THE OPINION THAT THE IMPLEMENTATION THEREOF SHOULD:
- RESOLVE THE UNCERTAINTY REGARDING ANGLO'S SHAREHOLDING IN AECI;
- SIGNIFICANTLY ENHANCE AECI'S EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE;
- INCREASE THE RETURN ON SHAREHOLDERS' EQUITY;
- ALLOW AECI TO CAPITALISE ON THE UNIQUE ACQUISITION OPPORTUNITY WHICH HAS BEEN
CREATED BY ANGLO'S STATED INTENTION TO DISPOSE OF ITS INVESTMENT IN AECI;
- CAUSE THE AGGREGATE COST OF CAPITAL IN AECI TO BE REDUCED; AND
- FACILITATE A CLEARER FOCUS ON AECI'S FUTURE GROWTH STRATEGY.
TERMS OF THE SPECIFIC REPURCHASE
IN TERMS OF THE SPECIFIC REPURCHASE, AECI AND AECI TREASURY HOLDINGS
(PROPRIETARY) LIMITED A WHOLLY-OWNED SUBSIDIARY OF AECI ("AECI TREASURY
HOLDINGS") WILL ACQUIRE 61 866 725 AECI ORDINARY SHARES IN AGGREGATE,
COMPRISING 40% OF THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF AECI. IT IS
PROPOSED THAT ON IMPLEMENTATION:
* AECI WILL REPURCHASE FROM ANGLO 51 555 605 AECI ORDINARY SHARES, WHICH
SHARES WILL BE CANCELLED; AND
* AECI TREASURY HOLDINGS WILL REPURCHASE FROM ANGLO 10 311 120 AECI ORDINARY
SHARES, WHICH SHARES WILL BE HELD AS TREASURY STOCK.
THE IMPLEMENTATION DATE WILL BE THE SECOND BUSINESS DAY IMMEDIATELY FOLLOWING
THE DATE ON WHICH THE SPECIAL RESOLUTIONS NECESSARY TO IMPLEMENT THE SPECIFIC
REPURCHASE ARE REGISTERED BY THE REGISTRAR OF COMPANIES, WHICH IS EXPECTED TO
BE ON OR ABOUT 15 JANUARY 2001 (THE "IMPLEMENTATION DATE").
THE LISTING ON THE JSE OF THE 51 555 605 AECI ORDINARY SHARES REPURCHASED BY
AECI WILL BE TERMINATED AT THE CLOSE OF BUSINESS ON THE IMPLEMENTATION DATE.
ANGLO WILL THEREAFTER HOLD 20 397 711 AECI ORDINARY SHARES (THE "RESIDUAL
SHARES") OR 19.8% OF THE REDUCED ISSUED ORDINARY SHARE CAPITAL OF AECI
(INCLUDING THOSE SHARES HELD AS TREASURY STOCK) AND HAS ENTERED INTO AN ORDERLY
MARKETING AGREEMENT WITH AECI IN RESPECT OF THE RESIDUAL SHARES.  THE PURCHASE
PRICE PER AECI ORDINARY SHARE PAYABLE TO ANGLO IN TERMS OF THE SPECIFIC
REPURCHASE IS THE AGGREGATE OF:
* AN INITIAL PAYMENT OF R11.49 PER AECI ORDINARY SHARE, PAYABLE IN CASH ON THE
IMPLEMENTATION DATE, WHICH IS THE LOWER OF THE 5 AND 30 DAY VOLUME WEIGHTED
AVERAGE TRADED PRICE OF AN AECI ORDINARY SHARE FOR THE PERIOD ENDED 21 NOVEMBER
2000 ("THE INITIAL PRICE"); AND
* TO THE EXTENT THAT THE VOLUME WEIGHTED AVERAGE TRADED PRICE PER AECI ORDINARY
SHARE FOR THE 30 BUSINESS DAYS PRIOR TO THE FIRST ANNIVERSARY OF THE
IMPLEMENTATION DATE (THE "SECOND PAYMENT DATE") IS HIGHER THAN THE INITIAL
PRICE ("THE PRICE INCREASE"), AN ADDITIONAL AMOUNT WILL BE PAYABLE IN CASH, ON
THE SECOND PAYMENT DATE, CALCULATED AS FOLLOWS:
* 100% OF THE PRICE INCREASE, UP TO A MAXIMUM AMOUNT OF R2.00 PER AECI ORDINARY
SHARE;
PLUS
* 50% OF THE PRICE INCREASE, IF ANY, ABOVE R2.00 PER AECI ORDINARY SHARE,
PROVIDED THAT THE PRICE PAID PER AECI ORDINARY SHARE SHALL NOT EXCEED R14.50 IN
AGGREGATE.
THE CASH COST TO AECI AND AECI TREASURY HOLDINGS IN RESPECT OF THE INITIAL
PAYMENT TO ANGLO IN TERMS OF THE SPECIFIC REPURCHASE WILL BE R769.3 MILLION
(INCLUDING SECONDARY TAX ON COMPANIES ("STC") OF R58.5 MILLION). THE MAXIMUM
ADDITIONAL CASH COST TO AECI AND AECI TREASURY HOLDINGS IN TERMS OF THE
SPECIFIC REPURCHASE WILL BE R205.6 MILLION (INCLUDING STC OF R19.4 MILLION).
NO FINAL DIVIDEND IN RESPECT OF THE 2000 FINANCIAL YEAR WILL BE DECLARED ON
THOSE SHARES REPURCHASED FROM ANGLO AND CANCELLED.  ANY DIVIDEND DECLARED ON
THE SHARES ACQUIRED BY AECI TREASURY HOLDINGS WILL ACCRUE TO IT.
FINANCIAL EFFECTS
THE PRO-FORMA FINANCIAL EFFECTS OF THE SPECIFIC REPURCHASE ON NET ASSET VALUE,
TANGIBLE NET ASSET VALUE AND EARNINGS PER AECI ORDINARY SHARE BEFORE AND AFTER
THE INITIAL PAYMENT ARE SET OUT BELOW:
                          NOTES     BEFORE         AFTER          % CHANGE
                                    (R PER SHARE)  (R PER SHARE)  NET ASSET
VALUE                     1         18.75          22.96          22.5%
TANGIBLE NET ASSET VALUE  1         15.90          18.21          14.5%
HEADLINE EARNINGS         2         1.97           2.68           36.1%
THE ABOVE CALCULATIONS ARE BASED ON 154.7 MILLION AECI ORDINARY SHARES IN ISSUE
BEFORE THE SPECIFIC REPURCHASE AND 92.8 MILLION AECI ORDINARY SHARES IN ISSUE
AFTER THE SPECIFIC REPURCHASE (IE EXCLUDING THE SHARES WHICH ARE CANCELLED AND
WHICH ARE HELD IN TREASURY).
1. BASED ON THE PUBLISHED UNAUDITED INTERIM BALANCE SHEET OF AECI AT 30 JUNE
2000 ON THE ASSUMPTION THAT THE SPECIFIC REPURCHASE WAS EFFECTIVE ON THAT DATE.
2. BASED ON THE PRO-FORMA UNAUDITED AECI RESULTS FOR THE YEAR TO 30 JUNE 2000
(COMPRISING UNAUDITED RESULTS FOR THE 6 MONTHS TO 31 DECEMBER 1999 AND
UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2000). THE AMOUNT IN THE
"AFTER" COLUMN REPRESENTS THE EARNINGS THAT WOULD HAVE ACCRUED PER AECI
ORDINARY SHARE HAD THE SPECIFIC REPURCHASE BEEN EFFECTIVE FROM 30 JUNE 1999, ON
THE ASSUMPTION THAT THE INCOME ON CASH BALANCES FOREGONE ACCRUED AT AN AVERAGE
INTEREST RATE OF 12% PA.
FUNDING OF THE SPECIFIC REPURCHASE
AECI INTENDS TO MAKE USE OF AVAILABLE CASH RESOURCES TO FUND THE SPECIFIC
REPURCHASE. THE SPECIFIC REPURCHASE WILL NOT COMPROMISE AECI'S GROWTH-ORIENTED
CAPITAL EXPENDITURE PROGRAMME.
THE DIRECTORS HAVE SATISFIED THEMSELVES AS TO THE LIQUIDITY AND SOLVENCY OF THE
COMPANY FOR THE 12 MONTH PERIOD IMMEDIATELY FOLLOWING THE IMPLEMENTATION DATE.
MANAGEMENT EXPECTS THAT THE DEBT TO EQUITY RATIO WILL BE LESS THAN 40% ON THE
IMPLEMENTATION DATE AND THAT THIS WILL REDUCE TO BELOW 30% BY 31 DECEMBER 2001.
GENERAL MEETING
A GENERAL MEETING OF AECI ORDINARY SHAREHOLDERS ("THE GENERAL MEETING") WILL BE
HELD AT THE REGISTERED OFFICE OF THE COMPANY ON THE GROUND FLOOR, AECI PLACE,
24 THE WOODLANDS, WOODLANDS DRIVE, WOODMEAD, SANDTON, AT 09:00 ON 10 JANUARY
2001 AT WHICH THE SHAREHOLDERS' RESOLUTIONS REQUIRED TO GIVE EFFECT TO THE
SPECIFIC REPURCHASE WILL BE PROPOSED. THE SPECIAL AND ORDINARY RESOLUTIONS
NECESSARY TO GIVE EFFECT TO THE SPECIFIC REPURCHASE WILL BE REQUIRED TO BE
PASSED BY AT LEAST 75% OR A MAJORITY, RESPECTIVELY, OF THE SHAREHOLDERS, OTHER
THAN ANGLO, PRESENT IN PERSON OR BY PROXY AND VOTING AT THE GENERAL MEETING.
IRREVOCABLE LETTERS OF UNDERTAKING TO VOTE IN FAVOUR OF SUCH ORDINARY AND
SPECIAL RESOLUTIONS HAVE BEEN OBTAINED FROM SHAREHOLDERS CURRENTLY HOLDING
11.2% OF THE ORDINARY SHARES IN AECI.
AT THE GENERAL MEETING, RESOLUTIONS WILL ALSO BE PROPOSED REGARDING, INTER
ALIA, THE ADOPTION OF A SHARE OPTION SCHEME FOR EMPLOYEES OF AECI AND
AMENDMENTS TO ITS ARTICLES OF ASSOCIATION TO REDUCE THE MINIMUM NUMBER OF
DIRECTORS ON THE BOARD AS WELL AS THE NUMBER OF DIRECTORS REQUIRED FOR A
QUORUM, AND TO PROVIDE THAT AT LEAST 50% OF THE DIRECTORS AND THE CHAIRMAN OF
THE COMPANY MUST BE NON-EXECUTIVE DIRECTORS.
A CIRCULAR TO SHAREHOLDERS OF AECI SETTING OUT DETAILS OF THE SPECIFIC
REPURCHASE, THE SHARE OPTION SCHEME AND THE PROPOSED AMENDMENTS TO AECI'S
ARTICLES OF ASSOCIATION AND INCLUDING A NOTICE OF THE GENERAL MEETING AND PROXY
WILL BE POSTED TO SHAREHOLDERS IN DUE COURSE.
WOODMEAD
11 DECEMBER 2000
INDEPENDENT FINANCIAL ADVISER TO AECI
CHASE
LEGAL ADVISER TO AECI
WEBBER WENTZEL BOWENS
CORPORATE LAW ADVISER TO ANGLO
TABACKS
SPONSORING BROKER
CHASE
ADVISER TO AECI ON SHARE OPTION SCHEME
CADIZ
REGISTERED ACCOUNTANTS AND AUDITORS
KPMG INC.



                                        
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.