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JDH - John Daniel Holdings Limited - Revised pro forma effects,
proposed waiver of a mandatory offer, date of General Meeting and
withdrawal of cautionary and finalisation announcement
JOHN DANIEL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: JDH - ISIN: ZAE000136677
("the Company" or "JDH" or "the Group")
REVISED PRO FORMA EFFECTS, PROPOSED WAIVER OF A MANDATORY OFFER, DATE
OF GENERAL MEETING AND WITHDRAWAL OF CAUTIONARY AND FINALISATION
ANNOUNCEMENT
INTRODUCTION
Shareholders are referred to the SENS announcement dated 10 June 2011
which detailed the initial terms of a conditional, partly underwritten
rights offer by JDH at a rights offer price of 7 cents per share and
proposed acquisition of an increased shareholding by JDH in Lazaron. In
addition, further and slightly revised terms were announced on SENS on
2 September 2011.
In light of the above-mentioned revised terms, the conclusion of the
Viscacom acquisition (after the due diligences and board approvals were
completed and obtained) as well as the intention to establish the Cryo-
Save joint venture, as announced on 1 June 2011, revised pro forma
effects are provided to shareholders below.
PRO FORMA FINANCIAL EFFECTS
The unaudited reviewed pro forma financial effects have been prepared
to illustrate the impact of the proposed Rights Offer and the proposed
Acquisition on the reported financial information of JDH for the six
months ended 31 December 2010, had the proposed Rights Offer and
proposed Acquisition occurred on 1 July 2010 for statement of
comprehensive income purposes and on 31 December 2010 for statement of
financial position purposes. The pro forma financial effects have been
prepared using accounting policies that comply with IFRS and that are
consistent with those applied in the unaudited results of JDH for the
six months ended 31 December 2010.
The unaudited pro forma financial effects set out below are the
responsibility of JDH`s directors and have been prepared for
illustrative purposes only and because of their nature may not fairly
present the financial position, changes in equity, results of
operations or cashflows of JDH after the Rights Offer and the
Acquisition.
Pro forma financial effects for the period ended 31 December 2010
Before Shares Change Viscacom Change (%)
issued for (%) Acquisitio (After
cash after (After n "B")
31 "A") ("B")
December
2010
("A")
Loss per (1.42) (1.36) 5% (1.53) (13%)
share
(cents)
Diluted (1.38) (1.36) 2% (1.53) (13%)
loss per
share
(cents)
Headline (1.38) (1.32) 5% (1.49) (13%)
loss per
share
(cents)
Diluted (1.34) (1.32) 2% (1.49) (13%)
headline
loss per
share
(cents)
Net asset (0.64) (0.09) 86% (0.09) 0%
value per
share
(cents)
Tangible (1.27) (0.68) 46% (0.86) (26%)
net asset
value per
share
(cents)
Weighted 150 500 157 652 5% 157 652 0%
average
number of
shares in
issue
(`000)
Number of 150 500 157 652 5% 157 652 0%
shares in
issue
(`000)
Continued...
Viscaco Rights Change Lazaro Change Cryo- Change
m Offer (%) n (%) Save (%)
Acquisi- ("C") (After Acquis-(After SA JV (After
tion "C") ition "D") acquis- "E")
("B") ("D") ition
(E)
Loss per (1.53) (0.44) 72% (0.41) 7% (0.41) 0%
share
(cents)
Diluted (1.53) (0.44) 72% (0.41) 7% (0.41) 0%
loss per
share
(cents)
Headline (1.49) (0.42) 72% (0.39) 6% (0.39) 0%
loss per
share
(cents)
Diluted (1.49) (0.42) 72% (0.39) 6% (0.39) 0%
headline
loss per
share
(cents)
Net asset (0.09) 3.82 4430% 3.45 (10%) 3.45 0%
value per
share
(cents)
Tangible (0.86) 3.49 507% (9%) 3.18 0%
net asset 3.18
value per
share
(cents)
Weighted 157 652 371 136% 442 19% 442 0%
average 938 893 893
number of
shares in
issue
(`000)
Number of 157 652 371 136% 442 19% 442 0%
shares in 938 893 893
issue
(`000)
Notes and assumptions:
1 The "Before" column is extracted from the Company`s unaudited,
reviewed published results for the six months ended 31 December
2010.
2 The unaudited pro forma information assumes that the Rights Offer
will be fully subscribed, resulting in 214 285 714 new shares
being issued at 7 (seven) cents a share, generating Rights Offer
Proceeds totaling R15 million. The increase in issued capital and
equity will have a continuing effect on the calculation of the
earnings per share. The increased capital raised will have a once
off effect on the statement of financial position.
3 The proceeds of the Rights Offer would be utilised to fund working
capital requirements, repay shareholders` loans and settle current
creditors, with the balance being applied to cash.
4 The "After A" column reflects shares issued for cash by JDH to a
number of parties which shares were issued after 31 December 2011
and prior to the Rights Offer. The increase in issued share
capital will have a continuing effect on the earnings per share
calculation. The settlement of outstanding liabilities through the
issue of the shares has a once off effect on the statement of
financial position.
5 The "After B" column assumes the acquisition of Viscacom based on
the first six months of trading of this business for statement of
comprehensive income purposes. The acquisition effective date
balance sheet at 30 June 2011 was utilised for statement of
financial position purposes. The acquisition of Viscacom will have
a continuing effect through the consolidation of its future
trading performance.
6 The "After B" column assumed the acquisition of Viscacom took
place as at 31 December 2011. The R3 million Viscacom loan owing
to Escalator has been included in column B as well as the interest
cost arising from the loan. Reserves and share capital were
eliminated and goodwill raised.
7 The "After C" column assumes that the R15 million Rights Offer
proceeds were received at the beginning of the period for
statement of comprehensive income purposes and that the interest
and loan transaction fees savings were realised over the six month
period. The saving includes the interest and transaction fee
expenses of R691 530 incurred by Viscacom during the six months.
The interest saving will have a continuing effect whilst the loan
transaction fees will have a once off effect.
8 The "After C" column for statement of financial position purposes
assumes the Rights Offer Proceeds of R15 million were received in
cash as at 31 December 2010, net of costs, and were assumed to be
applied to settling the Escalator loan of R6 019k, outstanding
creditors of R6 354k (which includes a former shareholder loan of
R1.5 million subsequently acquired by Escalator) and the balance
applied to cash and cash equivalents. The rights offer proceeds
will have a once off effect on the statement of financial
position. The settlement of interest bearing liabilities with the
proceeds of the rights offer will have a continuing effect on the
statement of comprehensive income.
9 The "After D" column assumes that the Acquisition was concluded at
the beginning of the period for statement of comprehensive income
purposes over the six month period (but assuming that all the
other restructure or transactions in Lazaron had occurred at the
beginning of the period) with the consolidation of 100% of the
results of Lazaron for the six month period ended 31 December
2010. The assumed acquisition of 100% interest in Lazaron will
have the effect of transferring R183k from "attributable to non-
controlling interest" to retained income. The results of Lazaron
have been extracted from the management accounts of Lazaron for
the six months ended 31 December 2010. The consolidation of
Lazaron will have a continuing effect on JDH.
10 The "After D" column for statement of financial position purposes
assumes that the maximum purchase consideration of R4 966 741 is
incurred in relation to the Acquisition and assuming that all the
other restructure or transactions in Lazaron had occurred at 31
December 2010, which purchase consideration is assumed to be
settled through the issue of 70 953 444 new JDH Shares at an issue
price of 7 cents per share in terms of the Lazaron General Offer
as at 31 December 2010. The settlement of the acquisition value
will have a once off effect on the statement of financial
position, while the consolidation of 100% of Lazaron results will
have a continuing effect on JDH.
11 The interest saving and transaction costs would impact the holding
company`s statement of comprehensive income only and therefore no
non-controlling shareholder adjustment would arise.
12 Transaction costs in relation to the Circular of R660 000 have
been assumed. These costs will have a once off effect on JDH.
13 The Cryo-Save joint venture acquisition effect shown in Column E
shows that there would be no dilutive effect for the JDH
shareholders due to Cryo-Save injecting the same value into the
joint venture as JDH i.e. R2 million. In addition, the Lazaron
Assets to be disposed of to the Cryo-Save joint venture are
already included in consolidated Group results as at 31 December
2010. The consolidation of the Cryo-Save joint venture operating
results will have a continuing effect on JDH.
14 Notional taxation of 28% has been assumed, where applicable.
PROPOSED WAIVER OF A MANDATORY OFFER
The issue of securities as a result of the JDH Rights Offer may result
in the underwriter, Escalator Capital Limited or its nominee
("Escalator"), controlling more than 35% of the issued share capital of
JDH. In terms of section 123 of the Companies Act (71 of 2008) ("the
Act"), Escalator or its nominee is obliged to make a mandatory offer to
the shareholders of JDH at the same price unless the mandatory offer is
waived in accordance with Regulation 86 (4) of the Companies Act
Regulations.
The TRP has advised that it is willing to consider the application to
grant an exemption from the obligation to make a mandatory offer if the
majority of independent shareholders of JDH waive their entitlement to
receive the mandatory of offer from Escalator or its nominee, in
accordance with this Regulation 86(4).
Any shareholder of JDH who wishes to make representations relating to
the exemption shall have 10 business days from the date of the posting
of the circular to shareholders to make such representations to the TRP
before the ruling is considered.
Representations should be made in writing and delivered by hand, posted
or faxed to and should reach the TRP by no later than the close of
business on Friday, 7 October 2011 in order to be considered.
If delivered by hand or If posted: If faxed:
courier:
The Executive Director The Executive The Executive
Takeover Regulation Panel Director Director
1st Floor , Building B Takeover Takeover
Sunnyside Office Park Regulation Panel Regulation Panel
32 Princess of Wales PO Box 91833 +27 11 642 9284
Terrace Auckland Park
Parktown 2006
2193
If any representations are made to the TRP within the permitted
timeframe, the TRP will consider the merits thereof before making a
ruling. Included in the circular to shareholders is the notice of
general meeting and the resolution for the waiver of the mandatory
offer for shareholders to consider, and if deemed fit, to approve at
the general meeting.
DOCUMENTATION
A circular to shareholders detailing the above-mentioned corporate
actions and detailed pro forma financial effects is expected to be
posted to shareholders on or about 26 September 2011.
GENERAL MEETING
The date of the General Meeting to approve the Waiver of Mandatory
Offer and the Acquisition of increased shareholding in Lazaron will be
held on 17 October 2011.
FINALISATION
Shareholders are advised that all the conditions precedent with regards
to the Rights Offer have been concluded and accordingly there are no
changes to the dates as published in the SENS announcements on 26
August 2011 and 2 September 2011.
WITHDRAWAL OF CAUTIONARY
Since the final pro forma financial effects and terms of the above-
mentioned corporate actions have been completed and announced,
shareholders are accordingly advised that this cautionary announcement
has now been withdrawn.
Johannesburg
09 September 2011
Sponsor
Arcay Moela Sponsor (Proprietary) Limited
Date: 09/09/2011 10:49:01 Supplied by www.sharenet.co.za
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