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LAB - Labat Africa Limited - Firm Intention and withdrawal of the cautionary
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB
ISIN: ZAE000018354
("Labat" or the "company")
FIRM INTENTION BY AURORA EMPOWERMENT SYSTEMS (PTY) LIMITED TO MAKE A MANDATORY
OFFER TO LABAT SHAREHOLDERS, THE RELATED PARTY DISPOSAL OF THE ASSETS,
LIABILITIES AND BUSINESS OF LABAT IN TERMS OF SECTION 228 OF THE COMPANIES ACT
AND WITHDRAWAL OF THE CAUTIONARY
1. INTRODUCTION
Shareholders were advised, in an announcement dated 4 February 2010, that
Aurora Empowerment Systems (Pty) Limited ("Aurora"), Link Private Equity
and Investments (Pty) Limited ("Link") and Labat had entered into an
agreement ("the agreement") in terms of which, and subject to the
fulfilment of certain suspensive conditions:
1.1 Link agreed to sell the 90 106 335 Labat shares it owns (equal to
approximately 45.7% of the issued share capital of Labat) to Aurora
for a cash consideration of 5 cents per share ("the sale of the Link
shares").
1.2 Link furthermore agreed to procure irrevocable undertakings from
shareholders holding at least 21.3% of the issued share capital of
Labat to accept the mandatory offer by Aurora as described in
paragraph 2 ("the additional acceptances").
1.3 Link will acquire:
- the business conducted by Labat as a holding company on 1 March 2010
("the effective date") ("the business");
- all the assets of Labat including the cash on hand and in the bank
account/s of the company on the third business day after the last
suspensive condition is fulfilled or waived, as the case may be
("closing date");
- all the issued shares in all subsidiaries of Labat ("sale
subsidiaries");
- all claims of whatsoever nature that Labat may have against the sale
subsidiaries as at the effective date and the closing date; and
- all liabilities of Labat as at the closing date in respect of the
business (including the liabilities of Labat to each of the sale
subsidiaries as at the closing date), apart from the shareholder loan
account to a maximum of R4 million ("the excluded liabilities"),
collectively referred to as ("the disposal").
The sale of the Link shares, the additional acceptances, and the disposal
are indivisibly linked transactions and are collectively referred to as
"the transactions".
1.4 Aurora will loan Labat R4 million on the closing date, which will be
used to settle the excluded liabilities ("the Aurora loan").
2. MANDATORY OFFER
The sale of the Link shares constitutes an "affected transaction" as
defined in the Securities Regulation Code on Take-overs and Mergers ("SRP
Code") and, accordingly, Aurora is obliged to make an offer to the
shareholders of Labat other than Link (the "offeree shareholders") in
accordance with the provisions of the SRP Code. Aurora has advised the
Labat board of a firm intention to make a mandatory offer to the offeree
shareholders to acquire all their Labat shares for a cash consideration of
5 cents per share ("the mandatory offer").
Aurora does not hold any existing securities in Labat.
3. CONFIRMATION OF FINANCIAL RESOURCES
The attorneys to Aurora, Amod`s Attorneys, have provided the Securities
Regulation Panel with confirmation of availability of cash resources to
satisfy the full cash consideration payable in terms of the mandatory
offer.
4. REINVESTMENT OPTION - SUBSCRIPTION FOR SOUTH AFRICAN MICRO ELECTRONIC
SYSTEMS (PTY) LIMITED ("SAMES")SHARES
Following the implementation of the transactions, Labat shareholders who
accept the mandatory offer will be given the opportunity to subscribe for
shares in SAMES on terms and conditions comparable to the price at which
Link has offered for SAMES.
SAMES is a wholly owned subsidiary of Labat and will be sold to Link in
terms of the disposal as described in paragraph 1.3.
SAMES will take all necessary actions to enable it to offer its shares to
members of the public, including, but not limited to, the removal of
restrictions related to private companies from its articles of association.
5. SUSPENSIVE CONDITIONS
The following suspensive conditions remain unfulfilled:
- approval of the transactions by the JSE Limited, Securities Regulation
Panel and all other regulatory approvals; and
- approval of the disposal as a disposal in terms of section 228 of the
Companies Act at a general meeting of Labat shareholders.
6. FINANCIAL EFFECTS OF THE DISPOSAL
The unaudited pro forma financial effects of the disposal, for which the
directors are responsible, are provided for illustrative purposes only to
show the effect of the disposal on the basic and headline loss per share as
if the disposal had taken effect on 1 March 2009 and on net asset value and
net tangible asset value per share as if the disposal had taken effect on
31 August 2009. Because of their nature, the unaudited pro forma financial
effects may not give a fair presentation of the group`s financial position
and performance. The unaudited pro forma financial effects have been
compiled from the unaudited interim results for the six months ended 31
August 2009 and are presented in a manner consistent with the format and
accounting policies adopted by the company and have been adjusted as
described in the notes below:
Unaudited Pro forma %
Before Unaudited Change
the After the
Note disposal disposal
Basic (loss) / 2 (6.2) 7.0 213
earnings per
share (cents)
Headline loss 2 (6.2) (2.2) 65
per share
(cents)
Net asset value 3 5.3 1.3 (75)
per share
(cents)
Net tangible 3 5.3 1.3 (75)
asset value per
share (cents)
Number of 197 155 197 155 -
shares in issue
throughout the
period (`000)
Notes:
1. The "Before the disposal" column has been extracted from the unaudited
interim results for the six months ended 31 August 2009.
2. The effects on the basic, and headline loss per share are calculated
based on the assumption that the disposal was effected on 1 March 2009
after taking into account the following:
- The exclusion of the income and expenses of SAMES and Sames
Properties (Pty) Limited ("SAMPROP") as extracted from the
unaudited interim results for the six months ended 31 August
2009.
- The deconsolidation of reserves at 28 February 2009 of SAMES,
SAMPROP and Labat Management Consulting (Pty) Limited ("Labat
MC") as extracted from the audited financial statements for the
year ended 28 February 2009.
- The exclusion of the assets and liabilities disposed of as at 28
February 2009 of Labat as extracted from the audited financial
statements of Labat for the year ended 28 February 2009.
- The application of the R4 million loan received from Aurora to
the immediate reduction of the liabilities of Labat.
- The inclusion of the proceeds of R6 605 012 pursuant to the
disposal. Interest on the proceeds has not been taken into
account.
- The inclusion of the transaction costs of R1.3 million.
3. The effects on net asset value and net tangible asset value per share
are calculated based on the assumption that the disposal was effected
on 31 August 2009 after taking into account the following:
- The exclusion of the assets and liabilities of SAMES, SAMPROP and
Labat MC as extracted from the unaudited interim results for the
six months ended 31 August 2009.
- The exclusion of the assets and liabilities of Labat that are
disposed of as extracted from the unaudited interim results for
the six months ended 31 August 2009.
- The deconsolidation of reserves of SAMES, SAMPROP and Labat MC at
31 August 2009 as extracted from the unaudited interim results
for the six months ended 31 August 2009.
- The application of the R4 million loan received from Aurora to
the immediate reduction of the liabilities of Labat.
- The inclusion of the proceeds of R6 605 012 from the disposal.
- The inclusion of the transaction costs of R1.3 million.
7. DOCUMENTATION
The disposal constitutes a related party transaction in terms of the JSE
Listings Requirements as Messrs BG van Rooyen, DJ O`Neill and VJ Labat are
directors of Labat and also shareholders of Link. The disposal is also an
affected transaction in terms of the SRP Code and will require 75% of
disinterested shareholders to vote in favour of the disposal. A circular,
containing details of the sale of the Link shares, the additional
acceptances, the disposal, the mandatory offer and incorporating a notice
of a general meeting of shareholders will be posted to Labat shareholders
in due course.
8. OPINIONS
The Labat board has appointed PKF Corporate Finance (Pty) Limited as
independent adviser to assist it in considering the terms of the mandatory
offer and the disposal and to provide it with the external advice required
in terms of the SRP Code and the JSE Listings Requirements.
9. WITHDRAWAL OF THE CAUTIONARY
Having regard to the information provided above, the cautionary is hereby
withdrawn.
Sandton
7 April 2010
Corporate adviser and sponsor to Labat
Vunani Corporate Finance
Legal adviser to Labat
Eversheds
Independent expert
PKF Corporate Finance (Pty) Limited
Corporate adviser to Aurora
Arcay Moela Sponsors (Pty) Ltd
Date: 07/04/2010 09:06:02 Supplied by www.sharenet.co.za
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