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PPC - Pretoria Portland Cement Company - Posting Of Scheme Document To PPC

Release Date: 16/10/2008 07:05
Code(s): PPC
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PPC - Pretoria Portland Cement Company - Posting Of Scheme Document To PPC Shareholders, Salient Dates, Effect Of Share Repurchases On The Proposed Broad-Based Black Ownership Initiative And Revised Pro Forma Financial Effects Pretoria Portland Cement Company Limited (Incorporated in the Republic of South Africa) (Company registration number: 1892/000667/06) JSE share code: PPC JSE ISIN: ZAE000096475 ZSE share code: PPC ZSE ISIN: ZWE000096475 ("PPC" or "the company") POSTING OF SCHEME DOCUMENT TO PPC SHAREHOLDERS, SALIENT DATES, EFFECT OF SHARE REPURCHASES ON THE PROPOSED BROAD-BASED BLACK OWNERSHIP INITIATIVE AND REVISED PRO FORMA FINANCIAL EFFECTS 1. Introduction Further to the announcement dated Thursday, 28 August 2008, PPC shareholders are advised that the company has posted a scheme document to PPC shareholders setting out details of the proposed broad-based black ownership initiative ("the transaction"). The scheme document is available in electronic form on the company`s website at: http://www.ppc.co.za For purposes of this announcement, PPC shareholders are referred to the definitions set out in the announcement dated Thursday, 28 August 2008. 2. Salient dates The scheme document incorporates the notices convening the general meeting and the scheme meeting, details of which are set out below. 2.1 General meeting A general meeting of PPC shareholders will be held at 09:00 on Tuesday, 11 November 2008 at the offices of PPC`s legal adviser, Bowman Gilfillan Inc., Auditorium, 165 West Street, Sandton. 2.2 Scheme meeting In terms of an order of Court granted on Tuesday, 14 October 2008, the High Court of South Africa (Witwatersrand Local Division) granted an order to convene a scheme meeting, to be held at 09:30, or ten minutes after the conclusion or adjournment of the general meeting, whichever is the later, on Tuesday, 11 November 2008 at the offices of PPC`s legal adviser, Bowman Gilfillan Inc., Auditorium, 165 West Street, Sandton. The salient dates and times in respect of the transaction are set out below: (note 1) 2008 Last day to trade in PPC ordinary shares Thursday, 30 October on the JSE Limited ("JSE") and Zimbabwe Stock Exchange ("ZSE") in order to be recorded in the register of members of PPC to vote at the scheme meeting on (note 2) Scheme meeting record date on Thursday, 6 November Last day for receipt of proxies in Friday, 7 November respect of the general meeting by 09:00 on (note 3) Last day for receipt of proxies in Friday, 7 November respect of the scheme meeting by 09:30 on (notes 4 and 5) General meeting to be held at 09:00 on Tuesday, 11 November Scheme meeting to be held at 09:30 or ten Tuesday, 11 November minutes after the conclusion or adjournment of the general meeting, whichever is the later, on Results of general meeting and scheme Tuesday, 11 November meeting released on SENS on or about Results of general meeting and scheme Wednesday, 12 November meeting published in the press on or about Court hearing to sanction the scheme at Tuesday, 25 November 10:00 or as soon thereafter as Counsel may be heard on IF THE SCHEME IS SANCTIONED AND IMPLEMENTED: Announcement on SENS regarding the Tuesday, 25 November sanctioning of the scheme on or about Announcement in the press regarding the Wednesday, 26 November sanctioning of the scheme on or about Expected last day to trade in PPC Friday, 5 December ordinary shares on the JSE and ZSE in order for PPC shareholders to be eligible to receive the scheme consideration on Expected first day to trade in PPC Monday, 8 December ordinary shares on the JSE and ZSE ex- entitlement to the scheme consideration under the new ISIN ZAE000125886 in South Africa and ZWE000125886 in Zimbabwe on Expected consideration record date at Friday, 12 December 17:00 on Expected operative date at the Monday, 15 December commencement of trading on the JSE and ZSE on The scheme consideration is expected to Monday, 15 December be transferred or posted (as the case may be), and new share certificates expected to be posted to scheme participants whose documents of title are received by the transfer secretaries before 12:00 on Friday, 12 December 2008, on or about Or failing receipt of documents of title before 12:00 on Friday, 12 December 2008, within five business days of receipt thereof by the transfer secretaries. The scheme consideration is expected to Monday, 15 December be credited to the dematerialised scheme participants` accounts held at their CSDP or broker and share balances updated on Notes: 1. The abovementioned times and dates are South African times and dates, and are subject to change. Any such change will be published on SENS and in the press in South Africa and Zimbabwe. 2. PPC shareholders are advised that as trading in shares on the JSE is settled within the Strate environment five business days following the trade, PPC shareholders acquiring dematerialised PPC ordinary shares after Thursday, 30 October 2008 will not be eligible to vote at the scheme meeting. 3. If the date of 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, provided that for the purposes of calculating the latest time by which forms of proxy must be received, Saturdays, Sundays and public holidays will be excluded. 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 chairperson of the scheme meeting by no later than ten minutes before the scheme meeting is due to commence. 5. If the date of the scheme 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 scheme meeting, provided that for the purposes of calculating the latest time by which forms of proxy must be received, Saturdays, Sundays and public holidays will be excluded. 6. PPC shareholders may not dematerialise or rematerialise their PPC ordinary shares between Friday, 5 December 2008 and Friday, 12 December 2008, both days inclusive. 3. Effect of share repurchases on the transaction The company`s empowerment is measured based on PPC ordinary shares in issue net of treasury shares. Accordingly, PPC shareholders are advised that the total size of the transaction has increased in percentage terms from 15.15% to 15.29% of PPC`s issued share capital (post the implementation of the transaction and net of treasury shares), as a result of additional share repurchases by PPC Cement (Proprietary) Limited ("PPC Cement"), a subsidiary of PPC. At the time of the announcement of the transaction on Thursday, 28 August 2008, PPC Cement held 14.9 million PPC ordinary shares. On Tuesday, 16 September 2008, PPC announced that PPC Cement had acquired an additional 2.2 million PPC ordinary shares and would continue acquiring PPC ordinary shares to reduce the dilutionary effect of the transaction. To date, PPC Cement has acquired a total of 20.1 million PPC ordinary shares and as a result, the total size of the transaction in percentage terms has increased to 15.29%. PPC shareholders are advised that the total number of PPC ordinary shares to be issued as part of the transaction, as well as the total number of PPC ordinary shares to be acquired as part of the scheme of arrangement, have not been amended. A breakdown of the effect of the share repurchases on the transaction is set out in the table below. As at 28 As at 1 August 2008 October 2008
PPC ordinary 537 612 390 537 612 390 shares in issue Treasury 14 900 000 20 140 401 shares PPC ordinary 522 712 390 517 471 989 shares in issue net of treasury shares PPC ordinary 48 557 982 48 557 982 shares issued as part of the transaction PPC ordinary 571 270 372 566 029 971 shares in issue post the transaction net of treasury shares PPC ordinary Percentage as Percentage as
shares to be at 28 August at 1 October held post the 2008 2008 transaction
Indirect trusts: The PPC 11 425 407 2.00% 2.02% Construction Industry Associations Trust Funding SPV The PPC 5 712 704 1.00% 1.01% Education Trust Funding SPV The PPC 4 015 621 0.70% 0.71% Community Trust Funding SPV The PPC Team 2 856 352 0.50% 0.50% Benefit Trust Funding SPV
Direct trusts: The PPC Black 10 470 419 1.83% 1.85% Managers Trust The Current 3 224 658 0.57% 0.57% PPC Team Trust and The Future PPC Team Trust The PPC Black 287 361 0.05% 0.05% Independent Non-executive Directors Trust CSGs and SBPs: CSG Funding 8 569 056 1.50% 1.51% SPV SBP Funding 39 988 926 7.00% 7.06% SPV Total 86 550 504 15.15% 15.29% 4. Revised pro forma financial effects PPC shareholders are referred to the announcement dated Thursday, 28 August 2008 regarding the transaction and are hereby advised of revised pro forma financial effects excluding the impact of the September 2008 repurchase of PPC ordinary shares. The pro forma financial effects set out below have been prepared to assist PPC shareholders to assess the impact of the broad-based black ownership initiative on the earnings per PPC ordinary share ("EPS"), diluted EPS, headline EPS ("HEPS"), diluted HEPS, net asset value ("NAV") per PPC ordinary share and tangible NAV ("TNAV") per PPC ordinary share. The material assumptions are set out in the notes following the table. These pro forma financial effects have been disclosed in terms of the Listings Requirements of the JSE and do not constitute a representation of the future financial position of PPC on implementation of the transaction. The pro forma financial effects are the responsibility of the PPC board of directors and are provided for illustrative purposes only. Pro forma financial effects For the 12 months ended 30 September 2007: Before the After the Percentage implementation implementatio change
of the n of the transaction transaction (cents) (cents) (%)
EPS 266 138 (48) Diluted EPS 266 132 (50) HEPS 263 136 (48) Diluted HEPS 263 129 (51) NAV per share 437 234 (46) TNAV per 433 230 (47) share For the six months ended 31 March 2008: Before the After the Percentage implementation implementatio change of the n of the transaction transaction
(cents) (cents) (%) EPS 126 2 (98) HEPS 126 2 (98) NAV per share 242 24 (90) TNAV per 239 20 (92) share Notes: 1. The EPS, diluted EPS, HEPS, diluted HEPS, NAV per PPC ordinary share and TNAV per PPC ordinary share "Before the implementation of the transaction" are based on the annual results for the year ended 30 September 2007 and interim results for the six months ended 31 March 2008. 2. The equity instruments issued to the CSG Funding SPV and the SBP Funding SPV are treated as a separate class of equity for accounting purposes as PPC has the right to acquire all of the initial subscription shares at their par value. Consequently, the earnings, EPS, diluted EPS, HEPS and diluted HEPS have been adjusted accordingly. 3. The PPC Black Managers Trust, The Current PPC Team Trust, The Future PPC Team Trust, The PPC Black Independent Non-executive Directors Trust and the Trust Funding SPVs are consolidated for accounting purposes. 4. The EPS and HEPS "After the implementation of the transaction" are based on the assumption that the transaction was implemented on 1 October 2006 and 1 October 2007 respectively, and include the following: 4.1 An IFRS2 charge of R474.0 million and R467.8 million for the 12 months ended 30 September 2007 and the six months ended 31 March 2008, respectively, based on the closing PPC share price on 21 August 2008 of R32.00 and the 30 trading day VWAP up to the close of business on that date of R31.3197556755536. 4.2 The finance cost applicable to the implementation of the transaction for the respective periods above being based on the relevant prevailing market rates. 4.3 Transaction costs associated with the implementation of the transaction and recognised in profit or loss amounting to R25.2 million. 4.4 For accounting purposes, the equity instruments issued to the CSG Funding SPV and the SBP Funding SPV are treated in a manner similar to that of an option. Consequently, these equity instruments are being treated as potential PPC ordinary shares for the purposes of calculating diluted EPS and diluted HEPS. 4.5 Similarly, to the extent that share-based payment grants have been made in terms of the Trust Funding SPVs and trustees of the Direct Trusts and the Trust Funding SPVs have settled their funding obligations, the transaction will ultimately result in PPC ordinary shares vesting with the Trust Funding SPVs and beneficiaries respectively. Consequently, these share-based payment grants are potential PPC ordinary shares and are being treated in a manner similar to that of an option for the purposes of calculating diluted EPS and diluted HEPS. 5. The EPS and HEPS "After the implementation of the transaction" are based on 499 619 868 weighted average PPC ordinary shares in issue for the 30 September 2007 pro forma financial effects (537 612 390 weighted average PPC ordinary shares in issue less 37 992 522 PPC ordinary shares treated as treasury shares on consolidation). 6. The EPS and HEPS "After the implementation of the transaction" are based on 497 853 313 weighted average PPC ordinary shares in issue for the 31 March 2008 pro forma financial effects (535 845 835 weighted average PPC ordinary shares in issue less 37 992 522 PPC ordinary shares treated as treasury shares on consolidation). 7. The diluted EPS and HEPS "After the implementation of the transaction" are based on 523 735 777 weighted average PPC ordinary shares in issue for the 30 September 2007 pro forma financial effects (499 619 868 weighted average PPC ordinary shares in issue plus 24 115 909 potential PPC ordinary shares). 8. The NAV per PPC ordinary share and TNAV per PPC ordinary share "After the implementation of the transaction" are based on the assumption that the transaction was implemented on 30 September 2007 and 31 March 2008, respectively. 9. The NAV per PPC ordinary share and TNAV per PPC ordinary share "After the implementation of the transaction" are based on 499 619 868 PPC ordinary shares in issue as at 30 September 2007 (537 612 390 PPC ordinary shares in issue less 37 992 522 PPC ordinary shares treated as treasury shares on consolidation). 10.The NAV per PPC ordinary share and TNAV per PPC ordinary share "After the implementation of the transaction" are based on 497 853 313 PPC ordinary shares in issue as at 31 March 2008 (535 845 835 PPC ordinary shares in issue less 37 992 522 PPC ordinary shares treated as treasury shares on consolidation). Johannesburg 16 October 2008 Investment Bank, debt adviser and transaction sponsor Standard Bank Independent sponsor Merrill Lynch South Africa (Proprietary) Limited Reporting accountants and auditors Deloitte & Touche Legal adviser Bowman Gilfillan Inc. Date: 16/10/2008 07:05:05 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.

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