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AVU - Avusa Limited - Press Release
Avusa Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/002461/06)
Share code: AVU ISIN: ZAE000115895
("Avusa" or "the Company")
Press Release
FIRM INTENTION TO MAKE AN OFFER NOT RECEIVED
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
As a leading media company Avusa iscommitted to clear communication.
We refer to our previous press announcements and releases related to an
Expression of Interest ("the EoI") received from a consortium ("the Consortium")
led by Capitau Holdings Limited ("Capitau") to acquire the entire issued share
capital of Avusa ("the Proposed Transaction"), including the "Withdrawal of
cautionary" announcement issued on SENS today, 7 September 2011. We reiterate
that the EoI is not binding and does not constitute a warranty, representation
or undertaking of any nature.
As detailed in the announcement dated 8 July 2011, the independent sub-committee
of Avusa ("the Independent Sub-Committee") agreed to grant the Consortium a six-
week due diligence ("the Due Diligence") period, which commenced on 12 July 2011
and ended on 24 August 2011. In addition, the Independent Sub-Committee also
requested that a firm intention to make an offer by the Consortium ("the Firm
Intention"), if forthcoming, be delivered within two weeks of the completion of
the Due Diligence being on or before 7 September2011.
The purpose of this press release is to inform the Avusa shareholders and other
stakeholders of the status quo of the EoI following conclusion of the Due
Diligence by the Consortium and the requirement for delivery by the Consortium
of the Firm Intention on or before 7 September 2011.
1 Firm intention to make an offer
Following conclusion of a Due Diligence investigation on 24 August 2011,
the Consortium has not delivered the Firm Intention on or before 7
September 2011, as required by the Due Diligence agreement.
The Independent Sub-Committee was notified by the Consortium that it is not
in a position to deliver the Firm Intention due principally to the proposed
changes to the Income Tax Act, 1962, as amended ("the ITA") and the impact
thereof on the Proposed Transaction. The Consortium`s funders will not
confirm their funding commitments until such time as SARS and the National
Treasury have, "with sufficient legal force and comfort", confirmed their
positions with regard to the deductibility of the interest relating to the
funding for the Proposed Transaction. As a result, the Consortium is
unable to provide the Independent Sub-Committee with a clear process, nor a
defined timeframe, for obtaining the required SARS and National Treasury
approvals for the deductibility of the interest relating to the funding of
the Proposed Transaction.
It is the Independent Sub-Committee`s opinion that, in discharging its
fiduciary duty to the Company of ensuring that the EoI is bona fide and
capable of implementation, the EoI is in fact, at this stage, not capable
of implementation. The Independent Sub-Committee believes that it is
therefore in the best interests of the Company to not grant the
Consortium`s request for an indefinite extension to the Proposed
Transaction timetable.
2 Background to the EoI
The Independent Sub-Committee wishes to draw attention to a number of
statements made in previous announcements in relation to the EoI which have
a direct bearing on the contents of this press release:
a "the EoI (...) is not binding, and does not constitute a warranty,
representation or undertaking of any nature";
b "the Consortium will only consider a formal offer (...) once it has
fulfilled the following conditions precedent: approval of the funder(s`)
investment and credit committees";
c "Upon receipt of the EoI, the Independent Sub-Committee commenced a process
of engagement with the Consortium and its advisors to obtain detailed or
specific information in relation to the EoI including, but not limited to:
The financial parameters and conditionality relating to the financial
instruments that would fund the proposed acquisition".
Joint press releases issued by SARS and National Treasury in June and
August 2011 have proposed retrospective amendments to sections 45 and 47 of
the ITA and proposed the introduction of a new section 23K, all of which
will have implications for the Proposed Transaction. The Consortium
notified the Independent Sub-Committee that "the issuance of the
(aforementioned) press releases (...) has been sufficient for our
financiers to confirm that they are not currently prepared to finalise the
financing of the Proposed Transaction until further clarity (with
sufficient legal force and comfort) is obtained from National Treasury and
SARS, as applicable, regarding whether interest deductions in relation to
such financing are likely to be approved".
In light of the above, and whilst the Due Diligence agreement does provide
for a possible extension of the date by which a Firm Intention may be
delivered by the Consortium, the Independent Sub Committee is of the
opinion and/or has been informed by the Consortium that:
i there is no certainty around SARS` and National Treasury`s positions
relating to the proposed changes to the ITA as they specifically relate to
the Proposed Transaction;
ii the Consortium is unable to provide a clear process, nor a defined time
frame for obtaining the required SARS and National Treasury approval for
the Proposed Transaction; and
iii the Consortium`s funders will not confirm their funding commitments until
such time as SARS and the National Treasury have confirmed their positions
with regards to the deductibility of the interest relating to the funding
proposed for the Proposed Transaction,
and therefore it is not in a position to grant the Consortium an indefinite
extension to the date by which the Consortium may deliver the Firm
Intention.
3 Withdrawal of cautionary announcement
As the Independent Sub-Committee has concluded that the EoI is, at this
stage, not capable of implementation, shareholders are advised that they
are no longer required to exercise caution when dealing in the Company`s
shares.
4 Independent Sub-Committee`s responsibility statement
In terms of the Takeover Regulations, the Independent Sub-Committee accepts
responsibility for the information contained in this announcement and that
to the best of its knowledge and belief (having taken all reasonable care
to ensure that such is the case) the information contained in this
announcement is in accordance with the facts and, where appropriate, that
it does not omit anything likely to affect the import of such information.
Johannesburg
7 September 2011
Investment bank and sponsor
Nedbank Capital
Legal advisors
WerksmansInc
Date: 07/09/2011 17:38:14 Supplied by www.sharenet.co.za
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