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SKJ - Sekunjalo Investments Limited - Announcement regarding the underwriting of
a rights issue to be undertaken by Sekunjalo Health Care Limited
Sekunjalo Investments Limited(Incorporated in the Republic of South
Africa)(Registration number 1996/006093/06)Share code: SKJ & ISIN:
ZAE000017893("Sekunjalo")
ANNOUNCEMENT REGARDING THE UNDERWRITING OF A RIGHTS ISSUE TO BE UNDERTAKEN BY
SEKUNJALO HEALTH CARE LIMITED
IntroductionSekunjalo has entered into an agreement, dated 1 July 2008 ("the
underwriting agreement") to underwrite 100% of the Rights issue to be undertaken
by, Sekunjalo Health Care Limited ("Rights issue").
Rationale
Sekunjalo currently owns 54% (voting) and 32.3% (equity) of Sekunjalo Health
Care Limited and is the 100% funder of the underlying businesses within the
group. The Sekunjalo Health Care businesses require new capital injection to
support the current businesses and take advantage of a number of contracts that
have been awarded to group companies. All shareholders of Sekunjalo Health Care
Limited have been afforded the opportunity to participate in the new growth
strategies in Sekunjalo Health Care Limited by following their rights in terms
of the Rights issue. Sekunjalo believes in the success of these new strategies
and thus has agreed to not only follow their rights in terms of the Rights issue
but also underwrite the entire Rights issue.
Consideration and settlement
A consideration of R60.299 million is payable by Sekunjalo in the event that
Sekunjalo is required to acquire 100% of shares ("Rights issue shares") offered
in terms of the Rights issue ("the Acquisition"). Sekunjalo will receive an
underwriting fee of R1.5 million.
Pro forma financial effects
The unaudited pro forma financial effects of the Acquisition on Sekunjalo`s
earnings, headline earnings, net asset value ("NAV") and tangible NAV per
ordinary share, based on the assumption that 100% of the Rights issue shares are
acquired by Sekunjalo, are set out below. The unaudited pro forma financial
information has been prepared for illustrative purposes only and, because of its
nature, may not give a true picture of Sekunjalo`s financial position and
results of operations. The preparation of the pro forma financial effects is the
responsibility of Sekunjalo`s directors.
Financial Effects of the Acquisition
Sekunjalo After % change
Investment transaction
Limited
Profit / (loss) for the (34,561) (34,561) 0.00%
period
Headline earnings (20,171) (20,171) 0.00%
NAV 55.90 55.90 0.00%
Tangible NAV 28.79 28.79 0.00%
Earnings per share (7.19) (7.19) 0.00%
Headline earnings per share (4.19) (4.19) 0.00%
Diluted earnings per share (7.06) (7.06) 0.00%
Weighted average no of 480,970,378 480,970,378
shares
No of shares in issue 487,860,984 487,860,984
Diluted number of shares 489,339,434 489,339,434
Assumptions
1. Based on Sekunjalo`s unaudited earnings, headline earnings, NAV and tangible
NAV for the 6 month period ended 29 February 2008.
2. Based on the assumption that the Rights issue occurred at 1 September 2007
for income statement purposes; and 29 February 2008 for balance sheet
purposes.
3. After taking into account the adjustment for reduced interest expense as a
result of R42.688 million of the total cash amount raised in terms of the
Rights issue being used to reduce Sekunjalo Health Care`s borrowings.
4. After taking into account the adjustment for an increased interest expense as
a result of R42.688 million having to be raised to fund Sekunjalo`s
underwriting of the Rights issue.
5. The reduced interest expense was arrived at by using 14.12%, being the
average interest rate incurred by Sekunjalo Health Care on its borrowings
for the 6 month period ended 29 February 2008.
6. After taking into account that any monies raised for the funding of the
Rights issue would be granted on terms and conditions no better or worse
than the current terms and conditions in force on the Sekunjalo Health Care
borrowings that will be reduced.
Further announcement
The Rights issue will be concluded by the 13th August 2008, whereafter an
announcement will be released advising shareholders of the extent of Sekunjalo`s
obligations in terms of the underwriting agreement and consequently the total
number of Rights issue shares acquired by Sekunjalo in terms of the Rights issue
Cape Town
30 July 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 30/07/2008 13:35:02 Supplied by www.sharenet.co.za
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