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POY - Poynting Holdings Limited - Specific repurchase of Poynting shares
POYNTING HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1997/011142/06)
Share code: POY ISIN: ZAE000121299
("Poynting" or "the company")
SPECIFIC REPURCHASE OF POYNTING SHARES
1. Introduction
Shareholders are referred to the SENS announcement dated 14 October 2008,
wherein they were advised that the company had entered into an acquisition
agreement with J Dresel, D C Nitch and The Andries Petrus Cronje Fourie
Trust (collectively "the Vendors") ("acquisition agreement") in terms of
which in the event of the company failing to achieve an amount of no less
than 80% of the June 2009 profit forecast of R19 005 000 set out in
Poynting`s prospectus issued on 26 June 2008 ("the prospectus"), which
amount equates to R15 204 000 ("the earnings target"), the company would
effect a share repurchase from the Vendors. As the company did not achieve
the earnings target, Poynting intends to implement the specific repurchase.
In terms of paragraph 10.1(b) of the Listings Requirements of JSE Limited
("JSE"), the Vendors are considered to be related parties. However, in
terms of paragraph 5.59(e) thereof, a fairness opinion is not required as
the specific repurchase will not be effected at a premium to the 30-day
Volume Weighted Average Price ("VWAP").
2. Rationale
The acquisition agreement was entered into as a sign of good faith to the
investor community after Poynting failed to reach its profit forecast for
the 12 months ended 30 June 2008 as set out in the prospectus. Accordingly,
Poynting intends to implement the specific repurchase which is governed by
the acquisition agreement.
3. Terms of the specific repurchase and effective date
In terms of the acquisition agreement, in the event that Poynting failed to
achieve its earnings target, the specific repurchase would be effected on
the basis that for every Rand of the earnings target not achieved, the
Vendors would offer 5.74 Poynting ordinary shares at par value, being 0.005
cents per ordinary share, to the company for the acquisition thereof,
subject to a maximum number of shares for each of the Vendors.
The maximum number of ordinary shares to be offered by the Vendors to the
company for acquisition thereof, is set out in the table below:
Vendors Maximum number of
shares to be
acquired by the
company
The Andries Petrus Cronje Fourie Trust 3 432 227
D C Nitch 1 334 720
J Dresel 1 183 138
Total 5 950 085
The consideration payable in terms of the specific repurchase, being
R297.50, will be funded through internally generated cash.
4. Financial effects
The table below sets out the unaudited pro forma financial effects of the
specific repurchase on Poynting`s earnings per share, headline earnings per
share, net asset value per share and net tangible asset value per share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the specific repurchase on the reported financial information
of Poynting for the 12 months ended 30 June 2010, had the specific
repurchase occurred on 1 July 2009 for income statement purposes and on 30
June 2010 for balance sheet purposes.
The unaudited pro forma financial effects have been prepared using
accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in the annual report
of Poynting for the 12 months ended 30 June 2010.
The unaudited pro forma financial effects, which are the responsibility of
the directors, are provided for illustrative purposes only and, because of
their pro forma nature, may not fairly present Poynting`s financial
position, changes in equity, results of operations or cash flow.
Before After Change
(cents) (cents) (%)
Earnings per share 2.86 2.89 1.05
Headline earnings per share 2.97 3.00 1.01
Net asset value per share 33.08 35.29 6.68
Net tangible asset value per share 18.24 19.38 6.25
Weighted average number of shares in 88 554 82 604 (7.07)
issue, net of treasury shares 275 190
Notes:
1 The "Before" column has been extracted from the audited results of Poynting
for the 12 months ended 30 June 2010.
2 The "After" column reflects the financial effects of the specific
repurchase on Poynting.
3 The effects are based on the assumption that the specific repurchase and
transactions costs (being R144 000) were funded from Poynting`s existing
cash resources.
4 The effects on earnings per share and headline earnings per share are
calculated based on the assumption that the specific repurchase was
effected on 1 July 2009.
5 The effects of net asset value per share and net tangible asset value per
share are calculated based on the assumption that the specific repurchase
was effected on 30 June 2010.
5. Conditions precedent
The specific repurchase is conditional upon the fulfillment of the following
conditions precedent:
- the specific repurchase being approved and the special resolution to give
effect thereto being passed to such effect by Poynting shareholders in
general meeting; and
- the special resolution being duly registered by the Registrar of Companies
in accordance with the Act.
In terms of paragraph 5.69(b) of the Listings Requirements of the JSE, the
Vendors, and their associates will be excluded from voting on the specific
repurchase.
6. Circular to Poynting shareholders
A circular containing full details of the specific repurchase and
incorporating a notice to convene a general meeting of Poynting
shareholders to be held on or about Wednesday, 19 January 2011 in order to
consider and, if deemed fit, to pass with or without modification, the
resolutions necessary to approve and implement the specific repurchase will
be sent to Poynting shareholders on or about Friday, 17 December 2010.
Johannesburg
13 December 2010
Designated Adviser
Merchantec Capital
Reporting accountants
KPMG Inc.
Date: 13/12/2010 17:34:01 Supplied by www.sharenet.co.za
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