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Restructuring Of The Group’s Debt – Partial Sale Of Assets By A Subsidiary And Cautionary Announcement
VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN
ISIN: ZAE000163382
(“Vunani” or “the Company” or “the Group”)
RESTRUCTURING OF THE GROUP’S DEBT – PARTIAL SALE OF ASSETS BY A
SUBSIDIARY AND CAUTIONARY ANNOUNCEMENT
1. BACKGROUND INFORMATION
The SENS announcement released on 12 October 2012 (“the announcement”)
provided details regarding the background and rationale for the
transaction.
2. EXECUTION OF THE TRANSACTION
The private placement conducted by Investec Bank Limited referred to
in the announcement has resulted in a further 9 100 000 Vunani
Property Investment Fund Limited (“VPIF”) units being sold.
3. EFFECTIVE DATE
On 12 October 2012, 9 100 000 VPIF units were sold at a price of 880c
per unit for a total value of R80 080 000.
4. FINANCIAL EFFECTS
Statement of comprehensive income:
The unaudited pro forma financial effects of the transaction, for
which the directors are responsible, on earnings per share (“EPS”),
diluted earnings per share (“DEPS”), headline earnings per share
(“HEPS”) and diluted headline earnings per share (“DHEPS”) are
provided for illustrative purposes only to show the effect of the
transaction as if the transaction had taken effect on 1 January 2012.
Because of their nature, the unaudited pro forma financial effects
may not give a fair presentation of the group’s financial position and
performance. The unaudited pro forma financial effects have been
compiled from the unaudited condensed consolidated results of the
Company for the six months ended 30 June 2012 and are presented in a
manner consistent with the format and accounting policies adopted by
the Company and have been adjusted as described in the notes set out
below:
Pro forma
After the
disposal of Pro forma
2 812 903 VPIF After the
units (Per aggregated
Unaudited announce- disposal of
Notes 30.6.2012 ment dated
Before the 12 October 11 912 903
disposals 2012) % VPIF units %
(Column 1) (Column 2) Change (Column 3) Change
EPS and DEPS
(cents) 1&2 14.2 16.3 12.8% 19.8 38.7%
HEPS and
DHEPS (cents) 1&2 19.3 21.8 13.0% 26.2 36.0%
Number of
ordinary shares in
issue at period
end (‘000) (net of
treasury shares) 105 415 105 415 - 105 415 -
Weighted average
number of shares
in issue at period
end (‘000) 105 415 105 415 - 105 415 -
Notes:
1. The Column 1 information has been extracted from the company’s
unaudited condensed consolidated results for the six months
ended 30 June 2012.
2. The Column 2 and Column 3 effects relating to the EPS, DEPS,
HEPS and DHEPS are based on the following assumptions and
information:
2.1 the transaction was effective 1 January 2012 at the price
determined in terms of the private placement as detailed
in paragraph 3 above (the “proceeds”). The difference
between the proceeds and the fair value on the disposed
units at 1 January 2012 has been processed as a fair value
adjustment. The fair value of the units at 1 January 2012
was 720 cents per unit. The result of this adjustment in
respect of the disposal of 2 812 903 VPIF units as
announced on 12 October 2012 (net of taxation and after
non-controlling shareholders’ interest) is an increase in
profit attributable to equity holders of Vunani of R3.7
million and the result of this adjustment in respect of
the aggregate disposal of 11 912 903 units (net of
taxation and after non-controlling shareholders’ interest)
is an increase in profit attributable to equity holders of
Vunani of R12.8 million;
2.2 The fair value adjustment to 30 June 2012 and related
deferred taxation on the disposed units has been
eliminated. The result of this adjustment (net of taxation
and after non-controlling shareholders’ interest) is,
after the disposal of 2 812 903 VPIF units as announced on
12 October 2012, a decrease in profit attributable to
equity holders of Vunani of R1.9 million and is, after the
disposal in aggregate of 11 912 903 units, a decrease in
profit attributable to equity holders of Vunani of R7.9
million ;
2.3 Distributions on the units of 27 cents per unit together
with the tax effect thereon have been eliminated. The
result of this adjustment (net of taxation and after non-
controlling shareholders’ interest) is, after the disposal
of 2 812 903 VPIF units as announced on 12 October 2012, a
decrease in profit attributable to equity holders of
Vunani of R0.4 million, and is, after the disposal in
aggregate of 11 912 903 units, a decrease in profit
attributable to equity holders of Vunani of R1.8 million;
2.4 It has been assumed that the proceeds have been utilised
to fully reduce funding in Vunani Properties Proprietary
Limited (“Vunani Properties”) with an average interest
rate of 9.2% over the six month period. Furthermore, it
has been assumed that the balance of the proceeds over and
above the value of the Vunani Properties loan are utilised
to reduce borrowings in Vunani Capital Proprietary Limited
with an average interest rate of 9% over the six month
period. The result of this adjustment (net of taxation and
after non-controlling shareholders’ interest) is, after
the disposal of 2 812 903 VPIF units as announced on 12
October 2012, an increase in profit attributable to equity
holders of Vunani of R0.7 million and is, after the
disposal in aggregate of 11 912 903 units, an increase in
profit attributable to equity holders of Vunani of R2.8
million.
All adjustments will have a continuing effect.
Statement of financial position:
In terms of the Listings Requirements, financial effects on the
statement of financial position are not presented as they are not
significant, being below 3%.
5. CAUTIONARY ANNOUNCEMENT
The Company expects to dispose of further VPIF units as detailed in
the announcement, and as such disposal may have a material affect on
the price at which Vunani shares trade, shareholders are advised to
exercise caution when dealing in Vunani shares until such time as a
further announcement is made.
16 October 2012
Sandton
Independent Designated Adviser
Grindrod Bank Limited
Date: 16/10/2012 05:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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