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MMG - MICROmega - Disposal Of BTM Manufacturing (Proprietary) Limited ("BTM") And Renewal Of Cautionary Announcement MICROmega HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06) (Share code: MMG & ISIN: ZAE000034435) ("MICROmega" or "the group") DISPOSAL OF BTM MANUFACTURING (PROPRIETARY) LIMITED ("BTM")AND RENEWAL OF CAUTIONARY ANNOUNCEMENT 1. INTRODUCTION Further to the cautionary announcement dated 30 November 2007, MICROmega shareholders are advised that MICROmega has entered into an agreement with Autovest Limited ("Autovest") in terms of which, subject to the fulfilment of the conditions precedent set out below, MICROmega will dispose of its wholly owned subsidiary, BTM Manufacturing (Pty) Ltd ("BTM"). The disposal represents a category 2 transaction, in terms of the listing requirements of the JSE Limited. 2. NATURE OF BUSINESS OF BTM BTM is a manufacturer and distributor to the automotive aftermarket of towbars and bullbars. 3. RATIONALE FOR THE DISPOSAL BTM Manufacturing (Pty) Ltd ("BTM") was acquired on 1 October 2005. Upon acquisition, a capital expenditure program was adopted that resulted in a 55% increase in production capacity in the plant in 2006. This capital expenditure program, whilst adequate in respect of market demand to date, did not in all respects meet our production standards. A plan was put in place to invest in a new production facility in 2007 which would accommodate an appropriate infrastructure for production. However this investment was deferred until such time as market demand for product could justify a new facility and deliver a competitive ROI to our shareholders. The need for an enhanced production facility is however one that cannot be deferred indefinitely and it was anticipated that such an investment would be required in 2008. During the month of December 2007 we had an unexpected offer for BTM and upon reviewing our anticipated ROI that we would achieve from BTM in 2008 after the required investment in infrastructure, it was decided that the proceeds on disposal could be better utilised in alternative acquisitions that presented a higher ROI to our shareholders. 4.TERMS OF THE DISPOSAL MICROmega has disposed of its wholly owned subsidiary, BTM, for a consideration of R34 million to be settled in cash on the fulfilment date. 5.CONDITIONS PRECEDENT The implementation of the disposal is subject to approval by the Competition Commission and the findings of the due diligence undertaken by Autovest. . 6.FINANCIAL EFFECTS OF THE DISPOSAL The table below shows the per share effect of the disposal of BTM for the six months ended 30 June 2007. The pro forma financial effects, which are the responsibility of the directors of MICROmega, have been prepared for illustrative purposes only and, because of their nature, may not fairly present MICROmega`s financial position as at 30 June 2007, or the effect of future earnings. The financial effects are determined in accordance with the Listing Requirements of the JSE. Notes Unadjusted Adjusted2 Chang 1 Pro-forma e (%)
Unaudited At At 30 June 30 June 2007 2007
Earnings per share (cents) 3 20.42 16.50 - 19.20 Headline earnings per share (cents) 4 18.81 14.89 - 20.84 Net asset value per share (cents) 5 181.69 187.38 3.13 Net tangible asset value per share 6 122.80 139.07 13.25 (cents) Weighted average number of shares 7 97 498 794 97 498 794 Total number of shares in issue 7 97 801 105 97 801 105 Notes: 1. The figures in the "Unadjusted" column are extracted from then published unaudited interim results of MICROmega for the six months ended 30 June 2007. 2. In the "Adjusted pro-forma" column the results of BTM for the period January to June 2007 reflect the results of BTM that were incorporated into the unaudited interim results as published for MICROmega. 3. Earnings per share calculations in the "Adjusted pro-forma" column are based on the following assumptions: -The disposal was effective 1 January 2007. -The net profit after tax of BTM for the six months ended 30 June 2007 was R3 820 566. 4. Headline earnings per share calculations in the "Adjusted pro-forma" column for BTM is unchanged from their earnings per share figure as there were no earnings that are exclude from headline earnings. 5. Net asset value per share is calculated on a net asset value of R177 694 254 for the "Unadjusted" column and R183 264 166 for the "Adjusted pro- forma" column with the adjustment comprising a R34 000 000 increase in cash balances and a decrease in other assets and liabilities of R28 430 088. 6. Net tangible asset value per share is calculated on a tangible asset value of R120 099 304 for the "Unadjusted" column and R136 015 881 for the "Adjusted pro-forma" column with the adjustment comprising a R34 000 000 increase in cash balances and a decrease in other assets and liabilities of R18 083 423. 7. The weighted average number of shares and the actual number of shares have not been adjusted as no shares are subject to this disposal. 7. APPLICATION OF THE SALE PROCEEDS The proceeds from the disposal will be used to strengthen the balance sheet of MICROmega and enhance the ability of MICROmega to make further acquisitions. MICROmega remain committed to investing in the automotive sector and in this respect we refer you to the below cautionary announcement. 8. RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are further advised that MICROmega is in negotiations to acquire the entire shareholding in Kolbenco (Proprietary) Limited, a first tier OEM supplier. If these negotiations are successfully concluded, it may have an effect on the price at which the company`s securities trade on the JSE Limited. Accordingly, shareholders are advised to exercise caution when dealing in MICROmega securities, until such time as a full announcement is made. Sandton, 11 January 2008 Sponsor: Investec Bank Limited Date: 11/01/2008 16:38:38 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
