Wrap Text
announcement
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
JSE Share code: LAB ISIN: ZAE000018354
("Labat")
Disposal of shares and claims in subsidiary companies,
change of name, distribution of disposal proceeds and
further cautionary announcement
1. Introduction
1.1 Pursuant to the cautionary announcement renewed on 26 April 2002, Labat
has, subject to the fulfilment of certain suspensive conditions, concluded
an agreement ("disposal agreement") with Allied Technologies Limited
("Altech") to dispose to Altech Data (Proprietary) Limited ("Altech Data"),
a wholly owned subsidiary of Altech, in accordance with Section 228 of the
Companies Act, 1973 (Act 61 of 1973) ("Act"):
* 100% of the issued share capital in South African Micro-Electronic Systems
(Proprietary) Limited ("Sames");
* 51% of the issued share capital in Labat Traffic Solutions (Proprietary)
Limited ("Labat Traffic"); and
* 100% of the issued share capital in Labat Africa Management Consulting
(Proprietary) Limited ("Labat Consulting")
(collectively referred to as the "Labat subsidiaries"), together with all
rights to the Labat Africa name and all claims on loan account of Labat
against the Labat subsidiaries ("disposal").
1.2 Negotiations are underway to acquire the remainder of the shares in
Labat Traffic. Should these negotiations be successful and Labat acquire
those shares, these shares will also form part of the disposal.
1.3 Simultaneous with, or as soon as reasonably possible after the
disposal:
* the Labat subsidiaries will be merged with Altech Data ("merger");
* the disposal proceeds, net of all costs, will be distributed to Labat's
shareholders by means of a capital reduction and an advance liquidation
dividend ("distributions to shareholders") in anticipation of the voluntary
winding-up of Labat by its members ("winding-up");
* an empowerment consortium consisting of certain Labat shareholders and
members of Labat's senior management ("consortium") will subscribe for 50,1%
of the issued share capital of Altech Data;
* Labat Africa Limited (the listed company) will change its name to Acrem
Holdings Limited ("Acrem") or such other name as may be approved by the
Registrar of Companies;
* Altech Data will change its name to Labat Altech Data (Proprietary)
Limited or such other name as may be approved by the Registrar of Companies;
* the board of directors of Acrem ("Board") will consider the future of the
retail business housed in Acme Stores (Proprietary) Limited ("Acme Stores"),
being the only remaining business of substance, and will inform shareholders
of the Board's recommendations by latest 31 December 2002 ("Acme
announcement"); and
* the Board will, at that time, propose Acrem's delisting from the JSE
Securities Exchange South Africa ("JSE") and its subsequent winding-up,
(collectively referred to as the "transactions").
2. Disposal
2.1 Nature of the business of the Labat subsidiaries
* Sames
Sames is the sole design house and provider of integrated circuits and semi-
conductor solutions in South Africa. These circuits and semi-conductors are
used in the telephony, water metering and energy measurement industries
worldwide.
* Labat Traffic
Labat Traffic provides technology-driven traffic management systems to large
metropolitan councils and provincial traffic departments in South Africa,
having fully automated the processing of traffic violations. Labat Traffic
has the rights to a range of cutting edge licence plate recognition and
image archiving technologies used to automate the otherwise labour intensive
job of manually processing traffic photographs and provides traffic fining
systems and back office systems to support traffic fining.
* Labat Consulting
Labat Consulting offers a range of proven methodologies focusing on the
public sector, including areas such as finance, operations, marketing,
information technology and human resources. Training services are also
rendered and are focused on meeting the needs of emerging management in both
the public and private sectors.
2.2 Rationale for the disposal
In light of current market conditions, the Board has reviewed the rationale
for Labat's listing and has concluded that the benefits of its listing are
outweighed by the disadvantages. As the market sentiment towards small to
medium capitalisation companies such as Labat is still not favourable, the
Board is of the opinion that it is unlikely that the market rating of Labat
will improve in the short to medium term. Accordingly, the Board has
explored various strategies to:
* optimise the position of shareholders and maximise value for them; and
* facilitate the delisting of Labat's shares from the JSE.
Both these objectives will be achieved by concluding the disposal and the
transactions.
2.3 Purchase price
The purchase price for the disposal is R180 million and will be paid on the
date of the implementation of the disposal agreement. The purchase price
could be adjusted upon the completion by Altech Data of a due diligence
investigation on the Labat subsidiaries. Should that happen, Labat will
announce appropriate details to shareholders without delay.
2.4 Financial effects
The financial effects of the disposal on the earnings per share ("EPS"),
headline earnings per share ("HEPS"), net asset value ("NAV") and tangible
net asset value ("TNAV") per Labat ordinary share are recorded in the table
below:
Per Labat Share Before disposal After disposal %
(cents) (cents) Change
EPS 7,1 1,5 (78,9)
HEPS 7,1 1,5 (78,9)
NAV 53,0 103,0 94,3
TNAV 36,0 103,0 186,1
Notes
1. The financial information contained in the "Before disposal" column is
based on the published unaudited interim financial results of Labat for the
six months ended 31 August 2001.
2. The EPS and HEPS contained in the "After disposal" column have been
calculated on the assumption that the disposal had been effective from 1
March 2001 and that the disposal proceeds had been invested at an after tax
rate of 9,5% for the period commencing 1 March 2001 and ending 31 August
2001.
3. The NAV and TNAV have been calculated on the assumption that the
disposal took place as at 31 August 2001.
The financial effects of the disposal, from the point of view of a Labat
shareholder, cannot be accurately disclosed until the final purchase price
is determined. Such details will be announced once the due diligence
investigations have been completed.
2.5 Suspensive conditions
The disposal is subject to various suspensive conditions as are normal in a
transaction of this nature including, inter alia:
* Labat and the consortium being satisfied with the outcome of a due
diligence on Altech Data;
* Altech Data being satisfied with the outcome of a due diligence on the
Labat subsidiaries;
* requisite approvals from the respective boards and shareholders of Labat
and Altech; and
* requisite approvals from the regulatory authorities and any such other
parties as may be necessary.
3. The Altech announcement
Further details of the merger are set out in the Altech announcement which
is published elsewhere in this publication.
4. Subscription of the shares
The consortium, which represents approximately 60% of the issued share
capital of Labat, will subscribe for 50,1% of the issued share capital in
Altech Data and will settle the subscription price by a combination of
reinvesting the disposal proceeds received by virtue of the distributions to
Labat shareholders and R39 million, which will be funded by a special
purpose vehicle established for the disposal.
5. Distributions to shareholders
The Board, subject to the disposal becoming unconditional, wishes to
distribute the disposal proceeds, net of all costs, to Labat shareholders by
way of a capital reduction in accordance with Section 90 of the Act and by
way of advance liquidation dividends in anticipation of the winding-up.
Further details will be announced once the due diligence investigations have
been completed (see 2.5 above).
6. Future of Labat
6.1 Labat is listed on the Venture Capital sector of the JSE lists and,
subsequent to the disposal and the distributions to shareholders, will
retain a listing under the name of Acrem Holdings Limited.
6.2 Labat's only remaining significant business will consist of retail
operations housed in Acme Stores. A diversified range of merchandise,
including furniture, consumer electronics and appliances are sold on credit
over 24 months through Acme Stores on the West Rand and Dales Stores on the
East Rand.
6.3 The Board will consider various alternatives regarding the retail
business described in 6.2 above and will advise shareholders of the proposed
course of action including the proposed delisting and winding-up in due
course.
7. Related party transaction
7.1 The consortium, for purposes of the Listings Requirements of the JSE,
is a related party and cannot vote in respect of the disposal. The
consortium is a concert party in terms of the Securities Regulation Code and
Rules ("Code") of the SRP and, consequently, would not be able to vote in
respect of the disposal in terms of the Code.
7.2 Full details of related party and/or concert party relationships will
be included in the further announcement.
8. General meeting and circular
Details of the general meeting of Labat shareholders and of the
documentation to be posted to Labat shareholders will be contained in the
circular to shareholders.
9. Further cautionary announcement
Shareholders are advised that, as mentioned in 2.3 above, the purchase price
could be adjusted upon the completion by Altech Data of a due diligence
investigation on Labat subsidiaries and that this may have a material impact
on the price at which Labat shares trade on the JSE. Accordingly, Labat
shareholders are advised to exercise caution when dealing in their Labat
shares on the JSE until a further announcement is made.
Johannesburg
3 May 2002
Corporate advisor and transaction sponsor
Brait
Attorneys to Labat
Pierce & Gampel
Registered Accountants & Auditors
Chartered Accountants (S.A.)
Auditors and reporting accountants
Evan Scop Attorneys
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