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KIR - Kairos - Proposed Delisting of Kairos from the main board of the JSE Limited and Withdrawal of Cautionary Announcement Kairos Industrial Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1987/002927/06) Share code: KIR ISIN: ZAE000011284 ("Kairos" or "the Company") PROPOSED DELISTING OF KAIROS FROM THE MAIN BOARD OF THE JSE LIMITED AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Proposal to delist For the reasons mentioned below, the Kairos board of directors ("the Board") has resolved that there is no ongoing merit in retaining the listing of Kairos on the JSE Limited, as the costs of maintaining a listing significantly overweigh the benefits of the listing and as such the Company`s business will for now be best suited to an unlisted environment. Should shareholder approval be received for the proposed delisting of Kairos, the Company`s controlling shareholder, Shefa Equity Holdings (Pty) Limited ("SEH") will in terms of paragraph 1.14(c) of the Listings Requirements of the JSE Limited, make an offer to acquire all Kairos ordinary shares held by minority shareholders, at an offer consideration of 1c (one cent) per share ("the Offer"). 2. Rationale for the delisting The rationale for the delisting is that: - Kairos` operational and financial performance has for some time been adversely affected by a number of well publicised factors. As a result of these developments, the Board believes that the Company will be better suited to an unlisted environment where its limited management resources can be focused on operational issues without the distraction from regulatory and shareholder issues; - The Board has considered the ongoing cost of maintaining the required levels of public disclosure and scrutiny which significantly overweighs the benefits of a listing. It is estimated that the cost savings associated with the delisting of the Company will amount to at least R2 million per annum; and - Approximately 82% of the Company`s ordinary shares are held by 7 shareholders leaving a free float of approximately 18% which partly explains the illiquidity of the Kairos shares on the market. The Offer will provide those shareholders who wish to exit, an opportunity to dispose of their ordinary shares. 3. Conditions precedent The proposed delisting is subject to inter alia, the fulfillment of the following conditions precedent: - The passing, by the requisite majority of Kairos shareholders at a general meeting, of the resolutions required to implement the delisting; - The unconditional approval by the Takeover Regulation Panel ("TRP") of the Offer; and - The unconditional approval by the JSE of the application to delist the Company`s ordinary shares. 4. Current Financial Performance The Audited Financial Statements of Kairos for the year ending the 28th February 2011 were published on SENS and distributed to all Kairos shareholders on the 31st May 2011. As at 28 February 2011 the Group had a negative Net Asset Value per share of 25.56 cents. The audited financial position of Kairos as presented is as set out below: 2011 2010
As at 28 February Audited Audited Loss for the year (R 000`s) (37 421) (89 303) Total Comprehensive Loss (R 000`s) (38 383) (83 750) Loss for the year per share (cents) (16.66) (39.77) 2 Headline Loss per share (cents) 2 (16.64) (40.65) Net Asset Value per share (cents) 2 (25.56) (8.47) Tangible Net Asset Value per share (26.67) (9.58) (cents) 2 Ordinary Shares in issue 224 554 224 554 430 430 Weighted average number of ordinary 224 554 224 554 shares in issue 430 430 Notes: 1. This financial information is extracted from the audited consolidated statement of comprehensive income of Kairos for the 12 months ended 28 February 2010 and 28 February 2011 respectively. 2. Calculated taking into account the 224 554 430 Kairos ordinary shares in issue. 5. Fairness opinion In compliance with the Section 1.13 to 1.16 of Listings Requirements the Board has appointed an Independent Expert to consider whether the Offer is fair to the Kairos shareholders. The opinion of the Independent Expert will be included in the circular to shareholders. 6. Circular to shareholders A circular containing the information required in terms of the Listings Requirements and incorporating a notice convening a General Meeting of Kairos shareholders to approve the delisting and the implementation of the Offer will in due course, subject to the approval of the JSE and the TRP, be posted to Kairos shareholders. 7. Salient dates and times The salient dates and times pertaining to the offer will be published on SENS prior to the issuing of the aforementioned circular. A further detailed announcement will be published on SENS and in the press once the full terms as well as the salient dates and times of the proposed delisting have been finalised. 8. Withdrawal of Cautionary Announcement Kairos shareholders are referred to various cautionary announcements published on SENS between March 2010 and April 2011 in which the Board advised shareholders of the disappointing financial performance and position of Brokrew Industrial (Proprietary) Limited ("Brokrew"), a wholly owned subsidiary of Kairos. The impact this has had on financial position of Kairos has now been appropriately disclosed in the recently published financial results for the year ended 28 February 2011, as well as the annual report sent to shareholders. Shareholders were advised that the financial restructuring of Brokrew was being pursued. As disclosed in the annual report, this process has now resulted in the support of the majority of affected Brokrew creditors for the deferred payment of outstanding amounts, where repayments will occur on an agreed and structured basis. Brokrew is also in the process of procuring additional working capital funding. As a result, the notice to shareholders to trade with caution is hereby withdrawn. Pretoria 8 June 2011 Sponsor: Bridge Capital Advisors (Pty) Limited Date: 08/06/2011 16:23:01 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.
