African Oxygen Limited - Pro rata share repurchase by way of a scheme of Release Date: 29/04/2005 15:12:01 Code(s): AFX
African Oxygen Limited - Pro rata share repurchase by way of a scheme of
African Oxygen Limited
(Incorporated in the Republic of South Africa)
(Registration number 1927/000089/06)
JSE share code: AFX NSX share code: AOX
("Afrox" or "the company")
Pro rata share repurchase by way of a scheme of arrangement
Standard Bank is authorised to announce that the board of directors of
Afrox ("the board") has approved the distribution of a portion of the net
proceeds, after the deduction of all related expenses, arising from the
disposal of the company"s 68.8% shareholding in Afrox Healthcare Limited
("Ahealth") ("the net proceeds"), to be effected through the acquisition of
approximately 34 285 308 Afrox shares by Afrox African Investments
(Proprietary) Limited ("Subco") (a wholly-owned subsidiary of Afrox) in
terms of section 89 of the Companies Act, 1973 (Act 61 of 1973), as amended
("the Act"). The acquisition is to be effected on a pro rata basis by way
of a scheme of arrangement in terms of section 311 of the Act proposed by
Subco between Afrox and its shareholders ("the scheme"). The balance of the
net proceeds from the disposal of its shareholding in Ahealth is to be
distributed to shareholders by way of a special dividend.
2 TERMS OF THE SCHEME
In terms of the scheme, Subco will acquire from each Afrox shareholder one
Afrox share per ten Afrox shares held ("the scheme shares") at the close of
Friday, 1 July 2005 ("the record date") for a consideration of 1 927 cents
per scheme share ("the scheme consideration"), which equates to the 30-day
volume-weighted average price of Afrox shares on the JSE Securities
Exchange South Africa ("the JSE") at the close of business on Thursday, 28
April 2005 less the amount of the special dividend of 415 cents per share,
plus a 5% premium.
In terms of the scheme, a total of approximately 34 285 308 scheme shares
will be acquired by Subco, representing 10% of the issued shares of Afrox,
for an expected total consideration of R660.8 million
To the extent that the number of shares that Subco would acquire exceeds
10% of Afrox"s issued shares as a result of any rounding up of fractional
entitlements to shares, such additional shares will be acquired by Afrox
3 THE SPECIAL DIVIDEND
Shareholders are referred to the Afrox Interim Results announcement
released on SENS on 29 April 2005 for full details of the special dividend.
4 RATIONALE FOR THE SCHEME AND THE SPECIAL DIVIDEND
The proceeds from the disposal of Afrox"s 68.8% shareholding in Ahealth
were received by Afrox on 22 March 2005. Taking into account the cash-
generating performance of Afrox"s operations, its current cash balances and
its low level of gearing, the board is of the view that Afrox"s current
cash resources are sufficient to fund its current operations and organic
growth into the foreseeable future, and that the net proceeds received
should therefore be distributed to shareholders.
The board has resolved to distribute a portion of the net proceeds by way
of an acquisition, as treasury shares, of 10% of Afrox"s shares in issue.
It is the board"s intention to utilise these treasury shares in pursuit of
the company"s strategic objectives.
The balance of the net proceeds will be distributed to shareholders by way
of a special dividend. The treasury shares will not participate in the
5 CONDITIONS PRECEDENT TO THE SCHEME
The scheme is subject, inter alia, to the fulfilment of the following
5.1 all necessary regulatory approvals being obtained;
5.2 the High Court of South Africa ("the Court") ordering that a meeting
of the shareholders of the company be convened to consider the scheme
("the scheme meeting");
5.3 a special resolution amending Afrox"s articles of association to
authorise Afrox to approve the acquisition of shares issued by it
being duly passed at a general meeting of Afrox shareholders and the
registration of such special resolution by the Registrar of Companies
5.4 special resolutions approving the acquisition of the scheme shares in
terms of the scheme being duly passed at a general meeting of Afrox
shareholders in accordance with the Act and the Listings Requirements
of the JSE and the registration of such special resolutions by the
5.5 the scheme being agreed to at the scheme meeting by a majority
representing not less than three-fourths of the votes exercisable by
shareholders present and voting in person or by proxy;
5.6 the Court having sanctioned the scheme; and
5.7 a certified copy of the Order of Court sanctioning the scheme being
registered by the Registrar in terms of the Act.
6 FINANCIAL EFFECTS OF THE SCHEME
The unaudited pro forma financial effects of the scheme on the basic
earnings per share ("EPS"), headline earnings per share ("HEPS") and net
asset value per share ("NAV") for the six-month period ended 31 March 2005
are set out in the table below. The unaudited pro forma financial effects
have been disclosed in terms of the Listings Requirements.
The unaudited pro forma financial effects are the responsibility of the
directors and have been prepared for illustrative purposes only and,
because of their nature, may not give a true reflection of the actual
financial effects of the scheme.
The unaudited pro forma financial effects presented below are based on the
consolidated results of Afrox and its subsidiaries and include the results
of Ahealth up to the effective date of disposal.
Before the After the Change
HEPS (cen 100.8(1) 112.0(2) 11.1%
EPS (cen 350.0(1) 388.9(2) 11.1%
NAV (cen 1 108.0(3) 1 017.0 (4) (8.5%)
1. The HEPS and EPS as set out in the "Before the scheme" column of the t
are based upon the unaudited income statement for Afrox for the six-month
ended 31 March 2005 and a weighted average of 342.853 million Afrox shares
2. The HEPS and EPS as set out in the "After the scheme" column of the ta
are based upon a weighted average of 308.568 million Afrox shares in issue
the assumptions that:
- the scheme was effective on 1 October 2004;
- sufficient proceeds from the Ahealth transaction to settle the scheme
consideration were received on
1 October 2004; and
- the aggregate scheme consideration was paid on 1 October 2004.
3. The NAV as set out in the "Before the scheme" column of the table is b
upon the unaudited balance sheet of Afrox as at 31 March 2005 and
342.853 million Afrox shares in issue.
4. The NAV as set out in the "After the scheme" column of the table is based
upon 308.568 million Afrox shares in issue and the assumptions that:
- the scheme became effective on 31 March 2005; and
- the aggregate scheme consideration was paid on 31 March 2005.
5. For the purposes of calculating these financial effects it was assumed
Afrox itself will not, in terms of the scheme and as a result of the appli
of the rounding principle, acquire any shares.
7. INDICATIONS OF SUPPORT
Shareholders holding, in aggregate, 78.5% of the Afrox shares currently in
issue have confirmed, in writing, their support for the scheme.
8. NOTICE OF MEETINGS
If the Court orders that the scheme meeting be convened:
* a general meeting will be held at 10:00 on Monday, 6 June 2005 at
Afrox House, 23 Webber Street, Selby, Johannesburg to consider and, if
deemed fit, approve the resolutions required to implement the scheme
("the general meeting"); and
* the scheme meeting will be held at 10:30 or ten minutes after the
conclusion or adjournment of the general meeting, whichever is the
later, on Monday, 6 June 2005 at Afrox House, 23 Webber Street, Selby,
Johannesburg to consider and, if deemed fit, agree to the scheme.
9. SALIENT DATES AND TIMES
Last day to trade Afrox shares in Thursday, 26 May
order to be recorded in the register
to vote at the scheme meeting (note
Record date to vote at the scheme Thursday, 2 June
meeting at 17:00 on
Last day to lodge forms of proxy for Thursday, 2 June
the general meeting by 10:00 on
Last day to lodge forms of proxy for Friday, 3 June
the scheme meeting by 10:30 on
(notes 4 and 5)
General meeting to be held at 10:00 Monday, 6 June
Scheme meeting to be held at 10:30, Monday, 6 June
or ten minutes after the conclusion
or adjournment of the general
meeting, whichever is the later, on
Announcement of results of general Monday, 6 June
meeting and scheme meeting on SENS
Announcement of results of general Tuesday, 7 June
meeting and scheme meeting in the
Court hearing to sanction the scheme Tuesday, 21 June
Announcement on SENS regarding the Tuesday, 21 June
sanctioning of the scheme
Announcement in the press regarding Wednesday, 22 June
the sanctioning of the scheme
If the scheme is sanctioned and
Last day to trade to participate in Friday, 24 June
First day to trade in Afrox shares Monday, 27 June
ex entitlement to the scheme
Record date on which shareholders Friday, 1 July
must be recorded in the register to
be scheme participants and so become
entitled to receive the scheme
consideration, at the close of
Operative date of the scheme Monday, 4 July
The scheme consideration and new Monday, 4 July
share certificates expected to be
posted to scheme participants
holding certificated Afrox shares
(if documents of title are received
on or prior to the record date of
the scheme) or, failing that, within
five business days of the receipt of
the relevant documents of title by
the transfer secretaries
Safe custody accounts to be updated Monday, 4 July
at the CSDP or broker in the case of
shareholders who have dematerialised
their Afrox shares
1. The abovementioned times and dates are subject to change. Any such ch
will be published on SENS and in the press.
2. Shareholders are advised that as trades executed on the JSE are settled
within the STRATE environment five business days following the trade,
shareholders acquiring shares after Thursday, 26 May 2005 will not be eligible
to vote at the scheme meeting.
3. If the general meeting is adjourned or postponed, forms of proxy must be
received by no later than 48 hours prior to the time of the adjourned or
postponed general meeting (excluding Saturdays, Sundays and public holidays).
4. If a form of proxy for the scheme meeting is not received by the time and
date shown above, it may be handed to the chairman of the scheme meeting by no
later than ten minutes before the commencement thereof.
5. If the scheme meeting is adjourned or postponed, forms of proxy must be
received by no later than 24 hours prior to the time of the adjourned or
postponed scheme meeting (excluding Saturdays, Sundays and public holidays).
6. Shareholders may not dematerialise or rematerialise their existing Afrox
shares from Friday, 24 June 2005. Dematerialisation and rematerialisation of
Afrox shares will recommence after Friday, 1 July 2005.
10. FURTHER DOCUMENTATION
If the Court orders that the scheme meeting be convened, a circular
providing further information relating to the scheme and containing, inter
alia, the scheme, an explanatory statement in terms of section 312 of the
Act, a notice of scheme meeting, a notice of general meeting, a form of
proxy in respect of the general meeting, a form of proxy in respect of the
scheme meeting and a form of surrender will be posted to Afrox shareholders
on or about Friday, 13 May 2005.
29 April 2005
Investment bank and transaction sponsor
Bowman Gilfillan Inc.
Reporting accountants and auditors
Pricewaterhouse Coopers Inc.
Barnard Jacobs Mellet Corporate Finance
Date: 29/04/2005 03:12:06 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department