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African Oxygen Limited - Pro rata share repurchase by way of a scheme of

Release Date: 29/04/2005 15:12
Code(s): AFX
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African Oxygen Limited - Pro rata share repurchase by way of a scheme of arrangement African Oxygen Limited (Incorporated in the Republic of South Africa) (Registration number 1927/000089/06) JSE share code: AFX NSX share code: AOX ISIN: ZAE000030920 ("Afrox" or "the company") Pro rata share repurchase by way of a scheme of arrangement 1 INTRODUCTION Standard Bank is authorised to announce that the board of directors of Afrox ("the board") has approved the distribution of a portion of the net proceeds, after the deduction of all related expenses, arising from the disposal of the company"s 68.8% shareholding in Afrox Healthcare Limited ("Ahealth") ("the net proceeds"), to be effected through the acquisition of approximately 34 285 308 Afrox shares by Afrox African Investments (Proprietary) Limited ("Subco") (a wholly-owned subsidiary of Afrox) in terms of section 89 of the Companies Act, 1973 (Act 61 of 1973), as amended ("the Act"). The acquisition is to be effected on a pro rata basis by way of a scheme of arrangement in terms of section 311 of the Act proposed by Subco between Afrox and its shareholders ("the scheme"). The balance of the net proceeds from the disposal of its shareholding in Ahealth is to be distributed to shareholders by way of a special dividend. 2 TERMS OF THE SCHEME In terms of the scheme, Subco will acquire from each Afrox shareholder one Afrox share per ten Afrox shares held ("the scheme shares") at the close of business on Friday, 1 July 2005 ("the record date") for a consideration of 1 927 cents per scheme share ("the scheme consideration"), which equates to the 30-day volume-weighted average price of Afrox shares on the JSE Securities Exchange South Africa ("the JSE") at the close of business on Thursday, 28 April 2005 less the amount of the special dividend of 415 cents per share, plus a 5% premium. In terms of the scheme, a total of approximately 34 285 308 scheme shares will be acquired by Subco, representing 10% of the issued shares of Afrox, for an expected total consideration of R660.8 million To the extent that the number of shares that Subco would acquire exceeds 10% of Afrox"s issued shares as a result of any rounding up of fractional entitlements to shares, such additional shares will be acquired by Afrox and cancelled. 3 THE SPECIAL DIVIDEND Shareholders are referred to the Afrox Interim Results announcement released on SENS on 29 April 2005 for full details of the special dividend. 4 RATIONALE FOR THE SCHEME AND THE SPECIAL DIVIDEND The proceeds from the disposal of Afrox"s 68.8% shareholding in Ahealth were received by Afrox on 22 March 2005. Taking into account the cash- generating performance of Afrox"s operations, its current cash balances and its low level of gearing, the board is of the view that Afrox"s current cash resources are sufficient to fund its current operations and organic growth into the foreseeable future, and that the net proceeds received should therefore be distributed to shareholders. The board has resolved to distribute a portion of the net proceeds by way of an acquisition, as treasury shares, of 10% of Afrox"s shares in issue. It is the board"s intention to utilise these treasury shares in pursuit of the company"s strategic objectives. The balance of the net proceeds will be distributed to shareholders by way of a special dividend. The treasury shares will not participate in the special dividend. 5 CONDITIONS PRECEDENT TO THE SCHEME The scheme is subject, inter alia, to the fulfilment of the following conditions precedent: 5.1 all necessary regulatory approvals being obtained; 5.2 the High Court of South Africa ("the Court") ordering that a meeting of the shareholders of the company be convened to consider the scheme ("the scheme meeting"); 5.3 a special resolution amending Afrox"s articles of association to authorise Afrox to approve the acquisition of shares issued by it being duly passed at a general meeting of Afrox shareholders and the registration of such special resolution by the Registrar of Companies ("the Registrar"); 5.4 special resolutions approving the acquisition of the scheme shares in terms of the scheme being duly passed at a general meeting of Afrox shareholders in accordance with the Act and the Listings Requirements of the JSE and the registration of such special resolutions by the Registrar; 5.5 the scheme being agreed to at the scheme meeting by a majority representing not less than three-fourths of the votes exercisable by shareholders present and voting in person or by proxy; 5.6 the Court having sanctioned the scheme; and 5.7 a certified copy of the Order of Court sanctioning the scheme being registered by the Registrar in terms of the Act. 6 FINANCIAL EFFECTS OF THE SCHEME The unaudited pro forma financial effects of the scheme on the basic earnings per share ("EPS"), headline earnings per share ("HEPS") and net asset value per share ("NAV") for the six-month period ended 31 March 2005 are set out in the table below. The unaudited pro forma financial effects have been disclosed in terms of the Listings Requirements. The unaudited pro forma financial effects are the responsibility of the directors and have been prepared for illustrative purposes only and, because of their nature, may not give a true reflection of the actual financial effects of the scheme. The unaudited pro forma financial effects presented below are based on the consolidated results of Afrox and its subsidiaries and include the results of Ahealth up to the effective date of disposal. Before the After the Change scheme scheme
HEPS (cen 100.8(1) 112.0(2) 11.1% ts) EPS (cen 350.0(1) 388.9(2) 11.1% ts)
NAV (cen 1 108.0(3) 1 017.0 (4) (8.5%) ts) Notes: 1. The HEPS and EPS as set out in the "Before the scheme" column of the t are based upon the unaudited income statement for Afrox for the six-month ended 31 March 2005 and a weighted average of 342.853 million Afrox shares issue. 2. The HEPS and EPS as set out in the "After the scheme" column of the ta are based upon a weighted average of 308.568 million Afrox shares in issue the assumptions that: - the scheme was effective on 1 October 2004; - sufficient proceeds from the Ahealth transaction to settle the scheme consideration were received on 1 October 2004; and - the aggregate scheme consideration was paid on 1 October 2004. 3. The NAV as set out in the "Before the scheme" column of the table is b upon the unaudited balance sheet of Afrox as at 31 March 2005 and 342.853 million Afrox shares in issue. 4. The NAV as set out in the "After the scheme" column of the table is based upon 308.568 million Afrox shares in issue and the assumptions that: - the scheme became effective on 31 March 2005; and - the aggregate scheme consideration was paid on 31 March 2005. 5. For the purposes of calculating these financial effects it was assumed Afrox itself will not, in terms of the scheme and as a result of the appli of the rounding principle, acquire any shares. 7. INDICATIONS OF SUPPORT Shareholders holding, in aggregate, 78.5% of the Afrox shares currently in issue have confirmed, in writing, their support for the scheme. 8. NOTICE OF MEETINGS If the Court orders that the scheme meeting be convened: * a general meeting will be held at 10:00 on Monday, 6 June 2005 at Afrox House, 23 Webber Street, Selby, Johannesburg to consider and, if deemed fit, approve the resolutions required to implement the scheme ("the general meeting"); and * the scheme meeting will be held at 10:30 or ten minutes after the conclusion or adjournment of the general meeting, whichever is the later, on Monday, 6 June 2005 at Afrox House, 23 Webber Street, Selby, Johannesburg to consider and, if deemed fit, agree to the scheme. 9. SALIENT DATES AND TIMES 2005
Last day to trade Afrox shares in Thursday, 26 May order to be recorded in the register to vote at the scheme meeting (note 2) Record date to vote at the scheme Thursday, 2 June meeting at 17:00 on Last day to lodge forms of proxy for Thursday, 2 June the general meeting by 10:00 on (note 3) Last day to lodge forms of proxy for Friday, 3 June the scheme meeting by 10:30 on (notes 4 and 5) General meeting to be held at 10:00 Monday, 6 June on Scheme meeting to be held at 10:30, Monday, 6 June or ten minutes after the conclusion or adjournment of the general meeting, whichever is the later, on Announcement of results of general Monday, 6 June meeting and scheme meeting on SENS Announcement of results of general Tuesday, 7 June meeting and scheme meeting in the press Court hearing to sanction the scheme Tuesday, 21 June Announcement on SENS regarding the Tuesday, 21 June sanctioning of the scheme Announcement in the press regarding Wednesday, 22 June the sanctioning of the scheme If the scheme is sanctioned and becomes effective: Last day to trade to participate in Friday, 24 June the scheme First day to trade in Afrox shares Monday, 27 June ex entitlement to the scheme consideration Record date on which shareholders Friday, 1 July must be recorded in the register to be scheme participants and so become entitled to receive the scheme consideration, at the close of trading on Operative date of the scheme Monday, 4 July The scheme consideration and new Monday, 4 July share certificates expected to be posted to scheme participants holding certificated Afrox shares (if documents of title are received on or prior to the record date of the scheme) or, failing that, within five business days of the receipt of the relevant documents of title by the transfer secretaries Safe custody accounts to be updated Monday, 4 July at the CSDP or broker in the case of shareholders who have dematerialised their Afrox shares Notes 1. The abovementioned times and dates are subject to change. Any such ch will be published on SENS and in the press. 2. Shareholders are advised that as trades executed on the JSE are settled within the STRATE environment five business days following the trade, shareholders acquiring shares after Thursday, 26 May 2005 will not be eligible to vote at the scheme meeting. 3. If the general meeting is adjourned or postponed, forms of proxy must be received by no later than 48 hours prior to the time of the adjourned or postponed general meeting (excluding Saturdays, Sundays and public holidays). 4. If a form of proxy for the scheme meeting is not received by the time and date shown above, it may be handed to the chairman of the scheme meeting by no later than ten minutes before the commencement thereof. 5. If the scheme meeting is adjourned or postponed, forms of proxy must be received by no later than 24 hours prior to the time of the adjourned or postponed scheme meeting (excluding Saturdays, Sundays and public holidays). 6. Shareholders may not dematerialise or rematerialise their existing Afrox shares from Friday, 24 June 2005. Dematerialisation and rematerialisation of Afrox shares will recommence after Friday, 1 July 2005. 10. FURTHER DOCUMENTATION If the Court orders that the scheme meeting be convened, a circular providing further information relating to the scheme and containing, inter alia, the scheme, an explanatory statement in terms of section 312 of the Act, a notice of scheme meeting, a notice of general meeting, a form of proxy in respect of the general meeting, a form of proxy in respect of the scheme meeting and a form of surrender will be posted to Afrox shareholders on or about Friday, 13 May 2005. Johannesburg 29 April 2005 Investment bank and transaction sponsor Standard Bank Attorneys Bowman Gilfillan Inc. Reporting accountants and auditors Pricewaterhouse Coopers Inc. Sponsor Barnard Jacobs Mellet Corporate Finance Date: 29/04/2005 03:12:06 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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