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Announcement regarding the Related Party Transaction
Letshego Holdings Limited
Incorporated in the Republic of Botswana
Registration number 98/442
Instrument code: LHL01 ISIN: ZAG000101908
Instrument code: LHL02 ISIN: ZAG000101916
Instrument code: LHL03 ISIN: ZAG000101924
Instrument code: LHL13 ISIN: ZAG000129719
(“Letshego Holdings” or “the Company”)
This announcement is being released on the Johannesburg Stock
Exchange for information purposes only in respect of Letshego
Holdings Limited’s Note Programme
ANNOUNCEMENT REGARDING THE RELATED PARTY TRANSACTION
This announcement is published in accordance with BSE Listing
Requirements and contains salient features of the proposed
related party transaction to be implemented subsequent to the
Shareholders of Letshego approving same. Details of this will be
set out in the Notice of the Extraordinary General Meeting as
set out in paragraph 8 below.
1. INTRODUCTION
The Directors of Letshego are pleased to announce an intention
by the Company to seek Shareholders’ approval to purchase the
remaining 13% shares in Letshego Tanzania from the minority
shareholders (‘the Sellers’) following the Sellers informing
Letshego of their intension to sell their shares. Letshego
already owns 87% of the shares in Letshego Tanzania and intends
to exercise its pre-emption rights by acquiring the remaining
13% shares from the Sellers, two of whom are former directors of
Letshego Tanzania and the third being an independent third
party.
The Listing Requirements require that Letshego obtains prior
approval from the Shareholders regarding this transaction as it
constitutes a Related Party transaction in terms of the BSE
Listing Requirements.
2. DETAILS OF THE RELATED PARTY TRANSACTION
The Board of Letshego has agreed to acquire the Sellers 13%
shares in Letshego Tanzania. Letshego intends to exercise its
pre-emption rights by acquiring the shares as it already owns
87% of the shares in Letshego Tanzania. The Sellers and Related
Parties are the minority shareholders of Letshego Tanzania.
These are:-
- Dr Hassy Kitine who holds 6% in Letshego Tanzania and was up
to 29 August 2015 a non-executive director and chairman of
Letshego Tanzania. He was previously a non-executive director
of Letshego during 2007-2009;
- Joseph Rugumyamheko was a non-executive director of Letshego
Tanzania from 2009 to 2014 and holds 2% shares; and
- Ambassador Paul Rapia who owns 5% and never served on the
board of Letshego Tanzania or Letshego.
3. CONSIDERATION
The Board of Letshego has agreed to acquire the Sellersshares
for a consideration of Tanzania Shillings 10.4 billion
(approximately BWP 50 million) in aggregate for their combined
13% shares in Letshego Tanzania which has been agreed by the
Sellers. The Consideration was based on the net asset value of
Letshego Tanzania as at 31st December 2014 per the audited
financial statements plus the budgeted profit after tax for the
year ended 31st December 2015.
Based on a closing date of 30 November 2015, and the estimated
financial performance of Letshego Tanzania for the period to 30
November 2015, this would represent a premium of 8% over the net
asset value of Letshego Tanzania.
4. NET ASSET VALUE
The related party transaction will not adversely affect the cash
flow of Letshego.
The impact of this Related Party transaction on the net assets
of the Company will not be material and is estimated to be BWP50
million. There is no impact on earnings per share. The audited
net asset value at 30th June 2015 was BWP4.1 billion.
5. NET PROFIT AFTER TAX
This Related Party transaction will have no impact on profit
after tax or earnings per share as calculated before the impact
of non-controlling interests. The audited earnings per share for
the half year ended 30th June 2015 were18.5 thebe per share.
6. BENEFITS
The opportunity presented to buy 194,278 shares representing 13%
of the issued share capital in Letshego Tanzania is attractive
because it will allow Letshego to become the 100% owner of
Letshego Tanzania and benefit fully from the future prospects of
this business which has been trading successfully since 2006.
Over time, it will facilitate the integration and cooperation
between Letshego’s two businesses in Tanzania.
7. RATIONALE
The Directors of Letshego are of the view that the Related Party
transaction will be in the best interest of the Company and its
Shareholders for the reasons set out in the circular to be
dispatched on or about 06th November 2015.
8. NOTICE TO THE EGM
The Notice of the Extraordinary General Meeting shall be
despatched to Shareholders on or about the 06th November 2015
which will set out further information on the proposed Related
Party Transaction. A Circular to shareholders setting out the
full details of the transaction will be dispatched to
Shareholders on or about the 6th of November 2015 and convening
an extraordinary general meeting of the Shareholders to be held
on or about the 27th of November 2015 for purposes of approving
the transaction.
9. IMPORTANT DATES
Announcement 06 November 2015
Notice of the EGM dispatched to 06 November 2015
Shareholders
J A Burbidge A C M Low
Group Chairman Group Managing Director
GABORONE, Friday, 6 November 2015
Debt sponsor in South Africa
The Standard Bank of South Africa Limited, acting through its
Corporate and Investment Banking division
Sponsoring broker in Botswana
Stockbrokers Botswana Limited
Legal Advisor
Armstrongs
Date: 06/11/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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