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SALIENT DATES ANNOUNCEMENT OF THE PROPOSED ACQUISITION BY DINATLA

Release Date: 24/10/2003 07:45
Code(s): BVT
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SALIENT DATES ANNOUNCEMENT OF THE PROPOSED ACQUISITION BY DINATLA The Bidvest Group Limited (Incorporated in the Republic of South Africa) (Registration number 1946/021180/06) (Share code: BVT ISIN: ZAE000008132) ("Bidvest") Dinatla Investment Holdings Dinatla Investment Holdings (Proprietary) Limited (Incorporated in the Republic of South Africa) (Registration number 2003/023927/07) ("Dinatla") BidBEE BidBEE Limited (Incorporated in the Republic of South Africa) (Registration number 2003/018861/06) Securities code: BDE ("BidBEE") SALIENT DATES ANNOUNCEMENT OF THE PROPOSED ACQUISITION BY DINATLA OF 45 000 000 bidvest ORDINARY SHARES BEING APPROXIMATELY 15% OF THE ISSUED SHARE CAPITAL OF BIDVEST BY WAY OF A SCHEME OF ARRANGEMENT AND THE ABRIDGED PRE-LISTING STATEMENT FOR 45 000 000 BIDBEE SECURITIES TO BE ISSUED AS CONSIDERATION IN TERMS OF THE SCHEME The terms used in this announcement are contained in the definition section in paragraph 15 below. 1. INTRODUCTION As announced on SENS on July 9 2003 and in the press on July 10 2003 Dinatla will, subject to the fulfilment of the suspensive conditions listed in paragraph 7, propose the scheme. In terms of the scheme, Dinatla will, with effect from the operative date, acquire the scheme shares pro rata from the scheme participants. This initiative will significantly raise Bidvest"s empowerment status 2. SALIENT FEATURES OF THE SCHEME The scheme will result in Dinatla becoming the owner, from the operative date, of the scheme shares which it will acquire, pro rata from the scheme participants, and as such will be entitled to vote the scheme shares. The scheme shares held by Dinatla will not participate in dividend distributions during the transaction period. In exchange for the disposal of the scheme shares, the scheme participants will receive the scheme consideration and call options. The call options entitle the holders to subscribe at the strike price (R60,00 per Bidvest ordinary share, subject to adjustment), in the aggregate, for 18 million Bidvest shares which will be issued, if the call options are exercised, on the third anniversary of the operative date. The obligation of Dinatla to deliver the scheme consideration to the scheme participants will be delegated by Dinatla to BidBEE, which will settle the scheme consideration by issuing the BidBEE securities to the scheme participants. BidBEE has been established for the specific purpose of issuing and owing the BidBEE securities to the securities holders, so as to enable securities holders to trade the BidBEE securities. The BidBEE securities will be listed on the main board of the JSE in the Specialist Securities Sector ("Other") under the name "BDE". In exchange for the assumption by BidBEE of the obligation of Dinatla to deliver the scheme consideration to the scheme participants, Dinatla will become liable to BidBEE for the Dinatla indebtedness. BidBEE will use the settlement received from Dinatla of the Dinatla indebtedness to settle its indebtedness under the BidBEE securities. The Dinatla indebtedness is the obligation, subject to the resolutive conditions described in paragraph 4, to pay by not later than the settlement date, the calculated value multiplied by 45 000 000 to BidBEE. Settlement will either be in cash in full or partly in cash and partly by the delivery of the relevant number of scheme shares, calculated on the basis of the calculated value multiplied by 45 000 000. Dinatla shall be entitled to settle the Dinatla indebtedness in full prior to the settlement date but only in cash. The Dinatla indebtedness will not be less than the minimum price (R42,00, subject to adjustment) nor more than the maximum price (R60,00, subject to adjustment) multiplied by 45 000 000. At the operative date the Dinatla indebtedness will have an aggregate minimum value of R1 890 million and an aggregate maximum value of R2 700 million, before any adjustments to the minimum price and the maximum price. The Dinatla indebtedness will be secured by the pledge of the scheme shares by Dinatla in favour of BidBEE. Until the specified date, Dinatla will be deemed to have renounced any specified distributions and rights offers on the scheme shares to BidBEE, which in turn will be deemed to have onward renounced them to the securities holders. The BidBEE securities entitle the securities holders to: - the proceeds of the Dinatla indebtedness; - the specified distributions; - any rights offers on the scheme shares up to the specified date; and - the fixed interest dealt with more fully in paragraph 12 as regards any amount paid in cash by Dinatla to BidBEE. BidBEE shall invest same with The Standard Bank of South Africa ("SBSA") on overnight call until such time as same together with the interest accruing thereon, shall be paid to the securities holders, which shall be as soon as possible after receipt thereof by BidBEE. Securities holders are protected by BidBEE and Dinatla being restricted in their memoranda of association in terms of section 53(a) of the Act in that they cannot undertake any transactions of any nature whatsoever other than as envisaged by the scheme. Any transactions completed outside of these powers will be ultra vires and will therefore be void. Provision has been made in these companies" memoranda that these companies cannot amend their memoranda of association without the approval of the JSE and without the approval of, in the case of Dinatla, Bidvest and BidBEE and in the case of BidBEE, by Dinatla. A diagrammatic representation of the transaction is as follows: * Listed on the JSE ** BidBEE securities listed on the JSE 3. EXTENSION OF THE SPECIFIED DATE The specified date can be extended by agreement between BidBEE and Dinatla and the approval of securities holders holding not less than 75% by market value of the BidBEE securities with the result that the transaction period is extended by a maximum of one year in the aggregate. 4. RESOLUTIVE CONDITIONS The transaction is subject to the following resolutive conditions namely: 4.1 Dinatla resolutive condition If on the specified date the calculated value of a scheme share does not exceed the maximum price, unless Dinatla elects to and does implement the transaction in whole or in part, the transaction or the relevant part will be cancelled ab initio. 4.2 BidBEE resolutive condition On each occasion after the first 30 days reckoned from the operative date, on which the value of a Bidvest share traded on the JSE calculated on a rolling 14-day traded volume weighted average price, falls below R32,00 (subject to adjustment having regard to specified distributions, rights offers and capital restructurings), the transaction in its entirety shall be cancelled ab initio, unless the board of directors of BidBEE waives the BidBEE resolutive condition. If the value of a Bidvest share traded on the JSE calculated on a rolling 14-day traded volume weighted average price, falls below R36,00 (subject to adjustment having regard to specified distributions, rights offers and capital restructurings), the board of directors of BidBEE is entitled to seek directions from the securities holders as to whether or not to waive the resolutive condition if it arises. The resolutive conditions, if fulfilled, shall not in any way affect the issue of the call options. 5. FINANCIAL EFFECTS PERTAINING TO THE SCHEME The financial benefits to Bidvest emanating from the BEE initiative are difficult to quantify, but are expected to be significant in the future. The table below sets out the pro forma financial effects of the issue of the call options on Bidvest. This is provided for illustrative purposes only. Published Pro forma Increase/ Difference before after (decrease) % Earnings per share (cents) 448,6 449,3 0,7 0,2 Headline earnings per share (cents) 479,0 478,1 (0,9) (0,2) Distribution per share (cents) 220,0 207,9 (12,1) (5,5) Net tangible asset value per share (cents) 1,561,0 1,810,2 249,2 16,0 Number of shares in issue (million) 302,7 320,7 18,0 5,9 Weighted average number of shares (million) 308,1 326,1 18,0 5,8 The "Pro forma after" column assumes that: - the scheme had been implemented with effect from July 1 2002; - the 18 million call options were exercised and in issue for the full year ended June 30 2003; - an average interest rate of 11% per annum before tax for the year ended June 30 2003 was earned by Bidvest on the proceeds from the issue of the shares which are the subject matter of the call options; and - in relation to the net tangible asset value calculation the scheme had been implemented on June 30 2003 and the call options had been exercised and the shares which are the subject matter of the call options issued on June 30 2003. The table below sets out the pro forma financial effects of the scheme on a Bidvest shareholder. This is provided for illustrative purposes only and excludes the effects of the enhanced dividend yield on the share price of Bidvest shares and, because of its historical nature, may not be a true reflection of the effects into the future. Before Pro forma after 15 100 85 BidBEE Diff- Diff- Bidvest Bidvest Secu- 6 Call erence erence
shares shares rities options Total R % Attributable market value (Rands) - Market price at last practicable date(1) 4 201 3 571 578 21 4 170 31 (0,7) - 30-day volume weighted price(2) 4 353 3 700 601 21 4 322 31 (0,7) - 60-day volume weighted price(3) 4 23 3 760 611 21 4 392 31 (0,7) Attributable Distributions - - - - 220 - 0,0 Notes: (1) The closing market price of 100 Bidvest shares on September 23 2003, being the last practicable trading day immediately preceding the publication of this circular. (2) The volume weighted average trading price of 100 Bidvest shares over the 30 trading days up to and including September 23 2003. (3) The volume weighted average trading price of 100 Bidvest shares over the 60 trading days up to and including September 23 2003. The financial effects are indicative only and have been based on the assumptions set out below: - the scheme had been implemented on September 23 2003; - the value of a call option was calculated using the Black Scholes valuation model with the following assumptions: - European call option; - three year term commencing on the operative date of the scheme; - distributions for the year ended June 30 2003 escalated by 12%; - volatility of 25%; and - a strike price of R60 per Bidvest share, giving a value of R3,47, which was used in the pro forma financial effects calculation above. - the value of the BidBEE security is calculated as the value of a Bidvest share less the value of a call option. No adjustment has been made to the Bidvest shares and BidBEE securities in the "Pro forma after" column for the increased and reduced dividend yield respectively, as this is difficult to quantify and the aggregate effect on a scheme participant is nil; - the Bidvest shareholders had not renounced their call options at the last practicable date; and - the call options granted to the scheme participants represent approximately 6% of the issued share capital of Bidvest. The difference is equal to the value of a call option on 9% of the Bidvest shares held by a scheme participant. 6. SALIENT DATES AND TIMES PERTAINING TO THE SCHEME 2003 Last day to trade Bidvest shares on the JSE in order to be recorded in the register on the voting record date Thursday, October 30 Voting record date in order to be able to vote at the scheme meeting and general meeting Thursday, November 6 Last day to lodge forms of proxy for the scheme meeting (by 9:00) and the general meeting by 10:00 Friday, November 7 Scheme meeting held (at 9:00) Monday, November 10 General meeting held (at 10:00 or immediately after the conclusion of the scheme meeting, whichever is the later) Monday, November 10 Publish results of scheme meeting on SENS (expected date) Monday, November 10 Publish results of scheme meeting in the press (expected date) Tuesday, November 11 Court hearing to sanction the scheme (at 10:00 or as soon thereafter as Counsel may be heard in the High Court of South Africa (Transvaal Provincial Division)) Tuesday, November 18 Publish results of Court hearing Wednesday, November 19 Expected last day to trade Bidvest shares on the JSE in order to be recorded in the register on the record date of the scheme Friday, November 28 Expected date of listing the BidBEE securities and the call options on the JSE and the date from which trading in the BidBEE will commence Monday, December 1 Expected record date of the scheme to determine participation in the scheme Friday, December 5 Expected operative date of the scheme from the commencement of business Monday, December 8 Expected date from which the scheme consideration and the call options will be made available or posted to certificated scheme participants (if documents of title are received on or prior to the record date of the scheme) or, failing that, within five business days of receipt of the relevant documents of title by the transfer secretaries Monday, December 8 Dematerialised scheme participants will have the BidBEE securities and the call options credited to their safe custody account held at their CSDP or broker Monday, December 8 2006 Expected date of notice reminding the holders of the call options of the final exercise of the call options, published in the press and on SENS Wednesday, November 1 Expected last date to exercise call options by 14:30 Friday, December 8 Expected date of settlement of the BidBEE securities to securities holders Tuesday, December 12 Expected date of listing of shares allotted and issued as a result of the exercise of the call options Wednesday, December 13 7. SUSPENSIVE CONDITIONS The scheme is subject to the fulfilment of various suspensive conditions before it becomes operative. These conditions are: - in accordance with the requirements of section 311 of the Act: - the scheme is approved at the scheme meeting by a majority representing not less than three-fourths of the votes exercisable by scheme members present and voting either in person or by proxy at the scheme meeting.; - the Court sanctioning the scheme; and - a certified copy of the Order of Court sanctioning the scheme being lodged with, and registered by, the Registrar; - the granting of a listing by the JSE of the BidBEE securities and the call options. The JSE has, subject to the fulfilment of all the conditions precedent, granted approval for the listing of the BidBEE securities and the call options; - any other regulatory approvals or consents necessary to implement the scheme being obtained in unqualified form, including but not limited to approvals and consents from the JSE and the Exchange Control department of the South African Reserve Bank; - the passing of the resolution to be proposed at the general meeting to be held immediately after the scheme meeting; and - the signing of a relationship agreement governing the relationship inter alia between Bidvest, Dinatla and the core shareholders of Dinatla. Bidvest has undertaken to announce on SENS and in the press confirmation of the fulfilment of the suspensive conditions as soon as possible after such fulfilment. 8. INFORMATION RELATING TO BIDBEE BidBEE was incorporated in South Africa on August 7 2003. Miranda Feinstein, a director of Edward Nathan & Friedland (Proprietary) Limited, will be the shareholder of Newshelf 732 (Proprietary) Limited (Registration number 2003/018913/07), which will in turn be the only shareholder of BidBEE. In view of the structure of BidBEE referred to below and since it will have no assets other than the Dinatla indebtedness, which it will have to use to settle the BidBEE securities, there is no possibility of the issued share in BidBEE ever being worth more than the par value thereof. In order to enable Dinatla to have the benefits of the protections under section 53(a) of the Act (as regards the restrictions in its memorandum of association limiting its powers to undertake transactions other than those envisaged by the scheme), BidBEE has issued to Dinatla one redeemable preference share, which Dinatla may not transfer. The preference share will be redeemed at R1,00. The preference share is not entitled to any votes unless a resolution is proposed for a distribution to BidBEE"s ordinary shareholder or the preference dividend or redemption payment remains in arrear. Edward Nathan & Friedland (Proprietary) Limited is the trustee to BidBEE. 9. INFORMATION RELATING TO DINATLA Dinatla, a company owned by a consortium of prominent entrepreneurial black businesses and the Bidvest Dinatla Trust was incorporated in South Africa on September 29 2003. The Bidvest Dinatla Trust is a trust to be formed for the purpose of uplifting Bidvest employees and their dependants who are predominantly historically disadvantaged individuals. In order to enable Bidvest and BidBEE to have the benefits of the protections under section 53(a) of the Act (as regards the restrictions in its memorandum of association limiting its powers to undertake transactions other than those envisaged by the scheme), Dinatla has issued to Bidvest 1 A and to BidBEE 1 B redeemable preference share with par values of R1,00 each. The preference shares are not entitled to any votes unless a resolution is proposed for a distribution of any nature to Dinatla"s ordinary shareholders other than as contemplated in the scheme, or a distribution of a preference dividend, or an redemption payment remains in arrear, or the protections under section 53(a) are sought to be amended without the requisite approvals. 10. DIRECTORS Full names Age Qualifications Address BidBEE Peter Nyman 58 CA(SA), ACMA, HDip Tax Law Bidvest House 18 Crescent Drive Melrose Arch,
Melrose 2196 Mafika Sihlali 35 BA.LLB 18 Clydesdale Road Crystal Park
1515 Guy Smith 72 B.Comm. CA(SA) 48 5th Avenue Illovo 2196
Dinatla Lionel Jacobs 59 B. Comm. MBA. Tuscany Office Park Coombe Place Rivonia
2128 Tania Slabbert 35 MBA (OU, UK 1998), BA Dunkeld Court 16 North Road Dunkeld West
2196 11. SHARE CAPITAL OF BIDBEE Authorised and issued share capital The authorised and issued share capital of BidBEE, before and after the issue of the BidBEE securities, assuming that the scheme becomes operative, is set out below: R Before the scheme Authorised share capital 1 000 ordinary shares of R1,00 each 1 000 1 redeemable preference share of R1,00 1 Total authorised share capital 1 001 Issued share capital 1 ordinary share of R1,00 1 1 redeemable preference share of R1,00 1 Total issued share capital 2 After the scheme Authorised share capital 1 000 ordinary shares of R1,00 each 1 000 1 redeemable preference share of R1,00 1 Total authorised share capital 1 001 Issued share capital 1 ordinary share of R1,00 1 1 redeemable preference share of R1,00 1 Total issued share capital (including share premium) 2 BidBEE securities R Before the scheme Issued 0 BidBEE securities - - After the scheme Issued 45 000 000 BidBEE securities 1 890 000 Total BidBEE securities 1 890 000 12. SALIENT FEATURES OF THE BIDBEE SECURITIES The BidBEE securities are asset-backed securities in terms of the JSE Listings Requirements. The BidBEE securities: - are backed by the scheme shares in terms of the pledge; - will rank pari passu with one another; - will receive any specified distributions and will be entitled to participate in rights offers; - will receive the fixed interest, namely if Dinatla settles the Dinatla indebtedness: 1. (or the relevant part thereof, if the Dinatla resolutive condition is waived only in part) on or after the specified date but before the 2nd business day after the specified date, the amount of interest (which shall accrue on the 1st business day after the specified date being the date upon which the calculated value is ultimately determinable) calculated on the Dinatla indebtedness (or the relevant part thereof, if the Dinatla resolutive condition is waived only in part) for one day, namely the 1st business day after the specified date at a rate equal to the overnight call rate of the SBSA applicable on the 1st business day after the specified date in respect of money deposited with SBSA on overnight call; 2. prior to the specified date, the amount of interest (which shall accrue on the 1st business day succeeding the transaction end date being the date upon which the calculated value is ultimately determinable) calculated on the Dinatla indebtedness for one day, namely the 1st business day after the date of settlement of the Dinatla indebtedness ("transaction end date") at a rate equal to the overnight call rate of SBSA applicable on the 1st business day after the transaction end date in respect of money deposited with SBSA on overnight call. As regards any amount paid in cash by Dinatla to BidBEE, BidBEE shall invest same with SBSA on overnight call until such time as same together with the interest accruing thereon, shall be paid to the securities holders, which shall be as soon as possible after receipt thereof by BidBEE. If the Dinatla indebtedness is not settled in full (or in part, if the Dinatla resolutive condition, described in paragraph 4.1, is fulfilled and waived only in part), on the settlement date, the Dinatla indebtedness shall in addition bear mora interest, provided that the mora interest will be suspended in certain circumstances while the adjustment of the minimum and maximum price is being settled. 12.1 Entitlement to specified distributions As regards any specified distributions, Dinatla will be entitled to receive them as the holder of the scheme shares but will be deemed, during the transaction period, to have renounced them in favour of BidBEE, which will in turn onward renounce them to the securities holders. The specified distributions will not be paid by Bidvest to Dinatla but will be paid by Bidvest as agent on behalf of Dinatla and BidBEE directly to the securities holders recorded in the register on the record date for the specified distribution in question. 12.2 Entitlement to rights offers As regards rights offers, Dinatla will be entitled to receive them as the holder of the scheme shares but will be deemed, during the transaction period, to have renounced them in favour of BidBEE, which in turn will onward renounce them to the securities holders recorded in the registers and sub-registers of BidBEE on the record date for the rights offer. 12.3 Entitlement to interest The BidBEE securities will be interest bearing in that: 12.3.1 they will receive on a pro rata basis interest equal to the fixed interest which shall accrue on date of receipt from Dinatla of the fixed interest, and if appropriate mora interest; plus 12.3.2 as regards any amount paid in cash by Dinatla to BidBEE, BidBEE shall invest same with SBSA on overnight call until such time as same together with the interest accruing thereon, shall be paid to the securities holders, which shall be as soon as possible after receipt thereof by BidBEE. The overnight call rate of SBSA in the event of any dispute shall be certified by any manager of SBSA whose appointment need not be proved. 12.4 Voting rights At a meeting of securities holders properly convened, a resolution put to the vote shall be decided by a poll based on the value of the BidBEE securities. A 75% majority by value of the BidBEE securities present and voting at the meeting shall be required to be voted in favour of any resolution. The result of such poll shall be deemed to be the resolution of the meeting. 13. LISTING ON THE JSE Application has been made to the JSE to list 45 000 000 BidBEE securities on the main board in the Specialist Securities - "Other" sector under the name "BDE" (incorrectly referred to in the scheme circular and the prelisting statement as the "Investment Products" sector) and to list the 18 000 000 call options. The listing is subject to the condition that the scheme is implemented. BidBEE will then meet the requirements of the JSE in respect of the requisite spread of securities holders. 14. DOCUMENTATION The documentation relating to the scheme will be posted today, to Bidvest shareholders registered at the close of business on Monday, October 20 2003. Bidvest shareholders are also referred to the notice of scheme meeting and order of court published simultaneously with this announcement. Copies of the Pre-listing Statement and the Scheme circular may be obtained during business hours until Friday, November 18 2003 from: - Investec Securities Limited, 100 Grayston Drive, Sandown, Sandton 2196; - Bidvest, Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose 2196; and - Computershare Limited, 70 Marshall Street, Johannesburg, 2001. 15. DEFINITIONS 15.1 "the Act" means the Companies Act, 1973 (Act 61 of 1973), as amended; 15.2 "BidBEE securities" means a security issued by BidBEE obliging BidBEE to pay to the holder the pro rata portion of the Dinatla indebtedness settled by Dinatla; 15.3 "calculated value" means the value of a Bidvest share on the JSE calculated on a rolling 14-day traded volume weighted average price of the Bidvest shares immediately preceding the transaction end date but not less than the minimum price nor more than the maximum price; 15.4 "call options" means the call options to be granted by Bidvest entitling the holders to subscribe in the aggregate for 18 million Bidvest shares; 15.5 "Dinatla indebtedness" means the obligation to pay by the settlement date the calculated value multiplied by 45 million; 15.6 "JSE" means the JSE Securities Exchange South Africa; 15.7 "maximum price" means R60,00 per scheme share subject to adjustment having regard to specified distributions, rights offers and capital restructurings; 15.8 "minimum price" means R42,00 per scheme share subject to adjustment having regard to specified distributions, rights offers and capital restructurings; 15.9 "operative date" means the operative date of the scheme which is expected to be December 8 2003; 15.10 "the scheme" means the scheme of arrangement in terms of section 311 of the Act proposed by Dinatla between Bidvest and the scheme members to which BidBEE is a party; 15.11 "scheme consideration" means one BidBEE security for every scheme share disposed of; 15.12 "scheme members" means persons registered as members of Bidvest other than BB Investment Company (Proprietary) Limited, on Thursday, November 6 2003, entitled to vote at the scheme meeting; 15.13 "scheme participants" means persons registered as members of Bidvest other than BB Investment Company (Proprietary) Limited (a wholly-owned subsidiary of Bidvest holding treasury stock), on Friday December 5 2003, who will dispose of the scheme shares in consideration for the scheme consideration and who will also receive the call options; 15.14 "scheme shares" means 45 000 000 Bidvest ordinary shares; 15.15 "securities holders" means the holders of BidBEE securities; 15.16 "settlement date" means the first business day after the specified date which is expected to be Tuesday, December 12 2006; 15.17 "specified date" means the first business day following the third anniversary of the operative date which is expected to be Monday, December 11 2006; 15.18 "specified distributions" means special distributions paid by the Bidvest on the scheme shares up to the specified date, other than normal dividend distributions (which normal dividend distributions may include distributions from Bidvest"s share premium account); 15.19 "strike price" means R60,00 per Bidvest share which is subject to adjustment if the capital structure of Bidvest changes during the transaction period; 15.20 "transaction period" means the period ending on the specified date unless Dinatla settles the Dinatla indebtedness earlier when it will be that date. Sandton October 24 2003 Investment bank and transaction adviser Investec Corporate Finance Investec Bank Limited (Registration number 1969/004763/06) Corporate law advisers to the transaction Edward Nathan & Friedland (Pty) Ltd Corporate Law advisers & Consultants (Registration number 1999/026464/07) Werksmans Incorporated (Registration number 1990/007215/21) Lead sponsor to Bidvest Investec Securities Limited Member of the JSE (Registration number. 1972/008905/06) Joint sponsor to Bidvest Deutsche Securities Member of the Deutsche Bank Group Deutsche Securities (SA) (Proprietary) Limited (Registration number 1995/011798/07) Reporting accountant and auditor KPMG Attorneys for the scheme Knowles Husain Lindsay Inc Attorneys (Registration number 2000/000004/21) Independent advisor Nedbank Corporate Date: 24/10/2003 07:45:43 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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