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AND - Andulela Investment Holdings Limited - Update on the acquisition by Andulela of Gibbsteel (PROPRIETARY) Limited ("GibbSteel") ANDULELA INVESTMENT HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1950/037061/06) JSE code: AND ISIN: ZAE000125894 ("Andulela" or "the company") UPDATE ON THE ACQUISITION BY ANDULELA OF GIBBSTEEL (PROPRIETARY) LIMITED ("GibbSteel") Shareholders are referred to the announcements dated 1 February 2011 and 18 March 2011, and are advised that the agreement referred to therein in relation to the acquisition by Andulela of Gibbsteel ("the transaction") was amended to reflect a change to the Tangible Net Asset Value ("TNAV") of the transaction and the purchase consideration. Due to the changed purchase consideration revised Financial Effects are shown. TRANSACTION PURCHASE CONSIDERATION The transaction purchase consideration of R51 million based on TNAV at the date the agreement was originally signed, has increased to R95 million resulting from an increase in value of plant and equipment, based on a sworn fair market valuation. The proposed value adjustment will be subject to a Due Diligence review, the outcome of which will be reported to the board of Andulela. Accordingly the cash portion of R35 million rand remains unchanged but the balance of the purchase consideration payable in Andulela ordinary shares at an issue price of 40 cents per share will increase from 40 million to 150 million Andulela ordinary shares. CLASSIFICATION OF THE TRANSACTION The transaction remains a category 2 transaction as classified in terms of the JSE Listings Requirements. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION The unaudited pro forma financial effects, for which the directors are responsible, are provided for illustrative purposes only to show the effect of the transaction on earnings and headline earnings as if the transaction had taken effect on 1 January 2010 and on net asset value and net tangible asset value per share as if the transaction had taken effect on 31 December 2010. Because of their nature, the unaudited pro forma financial effects may not give a fair presentation of the company`s financial position and performance and may not be comparable with the previous announcement in this regard which covered the six months ended 30 June 2010. The unaudited pro forma financial effects have been compiled from the audited consolidated financial statements for the 18 months ended 31 December 2010 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:
Audited Unaudited Unaudited (%) Before Adjusted After Change Before Earnings per share -7.48 -8.25 -7.76 5.94% (cents) Headline earnings per -0.54 -0.54 -0.44 18.52% share (cents) Net asset value per 7.66 7.66 8.85 15.54% share (cents) Net tangible asset value -2.93 -2.93 -1.36 53.58% per share (cents) Weighted average number 2 789 566 2 789 566 2 939 563 of shares in issue (000`s) Shares in issue at year 3 950 660 3 950 660 4 100 997 end (000`s) Notes: i The "Audited Before" column reflects the audited results of Andulela for the 18 months ended 31 December 2010. ii The "Unaudited Adjusted" column reflects the unaudited results of Andulela for the 12 month period ended 31 December 2010, following the change of the year end of the company from 30 June to 31 December. This was calculated by extracting the actual results for the 12 month period from 1 January 2010 to 31 December 2010. iii Net asset and tangible net asset value calculations were completed assuming the transaction was concluded at the balance sheet date of 31 December 2010. iv The unaudited interim results of Gibbsteel for the 12 months ended 28 February 2011 has been extracted from the adjusted unaudited management accounts of Gibbsteel for the above period. Management of Andulela has satisfied themselves with the quality of the management accounts. V The pro forma financial effects in the "Unaudited After" column are based on the following assumptions: - 149 997 000 ordinary shares were issued on 1 January 2010 to the seller for a total value of R 59 998 800. - A cash payment of R35 000 000 was made to the seller on 1 January 2010. - An amount of R 1 125 000 was paid to Gibbsteel during the 12 months in terms of the quarterly restraint of trade payment clause in the agreement. - The net profit after tax attributable to Gibbsteel for the 12 months ended 28 February 2011 amounted to R1 257 000; - The Tangible net asset value attributable to Gibbsteel as at 28 February 2011 amounted to R 95 million, and no goodwill was raised as a result of the transaction; and - Once-off transaction costs of R756 thousand were provided for. Johannesburg 22 June 2011 Corporate adviser and transaction sponsor Vunani Corporate Finance Sponsor Investec Bank Limited Attorneys Glyn Marais Incorporated Corporate adviser to Gibbsteel Sinergi Corporate Advisory Date: 22/06/2011 13:05:01 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.
