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RLO - Reunert Limited - Reunert receives payment for the sale of its 40% share
of NSN South Africa
REUNERT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1913/004355/06)
ISIN: ZAE000057428
Share Code: RLO
("Reunert" or "the Company" or "the Group")
REUNERT RECEIVES PAYMENT FOR THE SALE OF ITS 40% SHARE OF NSN SOUTH AFRICA
1. INTRODUCTION
Shareholders are referred to the 2010 annual report wherein it was mentioned
that Reunert intended to exercise its put option relating to its investment in
Nokia Siemens Networks South Africa (Proprietary) Limited ("NSN") to the
remaining shareholders of NSN. The option was exercised and represented 40% of
the issued share capital of NSN ("the disposal").
2. THE DISPOSAL
2.1 Rationale for the disposal
Prior to the establishment of NSN, Reunert had a 40% shareholding in Siemens
Telecommunications (Proprietary) Limited ("Sietel"). The remaining shareholder
was Siemens Limited.
During the latter part of 2006 Siemens AG and the Nokia Corporation entered into
an agreement to establish a joint venture combining their worldwide mobile and
fixed telecommunication network equipment businesses, including but not limited
to the Sietel business in South Africa. The Sietel business was renamed NSN. NSN
supplies infrastructure and solutions to communications service providers.
Reunert agreed to remain a shareholder in NSN and waived its pre emptive and tag
along rights in respect of the aforesaid transaction subject, inter alia, to the
condition that Reunert would have a put option in respect of its 40%
shareholding, with a minimum floor value that it was entitled to exercise in
January 2011.
Reunert has elected to exercise its put option and has received payment of the
amount of R793 465 663. Although the sale of the shares dilutes earnings by 2%
on a comparative basis for the year to September 2010 the declining commission
earned from the investment resulted in the decision to take advantage of the put
option. The comparative earnings are also calculated based on historically low
interest rates.
2.2 Terms of the disposal
Reunert has transferred and ceded 56 000 (fifty six thousand) ordinary shares
with a par value of R1 (one South African Rand) each to Nokia Siemens Networks
BV, the holding company of NSN, which shares represent 40% of the issued share
capital of NSN.
Nokia Siemens Networks BV, has acquired the shares for R793 465 663 and the
money was received by Reunert on 31 January 2011. The implementation of the
disposal was not subject to any conditions precedent, and therefore the disposal
has been implemented in full and Reunert no longer holds an investment in NSN.
2.3 Pro forma financial effects of the disposal
The table below sets out the unaudited pro forma financial effects of the
disposal on earnings per share ("EPS"), headline EPS ("HEPS"), normalised HEPS
("NHEPS"), net asset value ("NAV") and net tangible asset value ("NTAV") per
share and diluted EPS, HEPS and NHEPS based on the audited results of the
Company for the period ended 30 September 2010.
The unaudited pro forma financial effect of the transaction is the
responsibility of the directors and has been prepared for illustrative purposes
only to provide information about how the disposal may impact shareholders on
the relevant reporting date and because of its nature these pro forma financial
effects, may not give a fair reflection of the Company`s future financial
position which may differ marginally.
Before the After the Change
disposal(1) disposal (%)
(cents) (2,3)
(cents)
EPS 503,3 680,8 35,3
HEPS 505,5 495,2 (2,0)
NHEPS 515,7 505,4 (2,0)
Diluted EPS 498,8 675,0 35,3
Diluted HEPS 501,1 491,0 (2,0)
Diluted NHEPS 511,1 501,1 (2,0)
NAV per share (4) 2 502 2 502 -
NTAV per share (4) 2 246 2 246 -
Number of shares in issue 197 824 585 197 824 585 -
Weighted average number of 178 748 226 178 748 226 -
shares in issue
Notes:
1. Extracted from the published audited results of the Company for the period
ended 30 September 2010.
2. Adjustments to EPS, HEPS and NHEPS have been made on the assumption that:
2.1 The disposal was effective on 1 October 2009;
2.2 The proceeds from the disposal were invested at 5,75% per annum;
2.3 A company tax rate of 28% was applied;
2.4 Account has been taken of the timing and nature of proceeds received from
NSN in calculating the comparative income of the transaction.
2.5 A gain of R335,8 million relating to the realisation of the revaluation of
the investment in NSN at 1 October 2009 is included in EPS, but excluded
from HEPS and NHEPS.
3. Adjustments to NAV and NTAV per share have been made on the assumption that
the disposal was effective on 30 September 2010.
4. The book value of the investment and the fair value of the option were
equal to the cash consideration received.
Sandton
4 February 2011
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 04/02/2011 14:30:01 Supplied by www.sharenet.co.za
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