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BIK - Brikor Limited - Granting of option to restructuring officer
Brikor Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1998/013247/06)
(Share Code: BIK ISIN Code: ZAE000101945)
("Brikor" or "the Company")
GRANTING OF OPTION TO RESTRUCTURING OFFICER
1 INTRODUCTION AND BACKGROUND
Shareholders are referred to the announcement released on SENS on 31 May
2011, containing the reviewed annual results of the company for the year
ended 28 February 2011 where it was announced that the board of directors
of Brikor ("the board") is in the process of finalising the appointment of
a Chief Restructuring Officer ("CRO"). The CRO is appointed to facilitate
the restructuring process and play an important role, together with the
board and management, to successfully implement and execute the
restructuring programme, which are explained in detail below in this
announcement.
Shareholders are advised that the board received a restructuring proposal
from Matuson and Associates (Pty) Limited ("Matuson") on 26 May 2011, which
the board accepted, and Matuson began implementing the restructuring
programme of Brikor on 26 May 2011.
2 SERVICES TO BE RENDERED BY MATUSON
The services to be rendered by Matuson will include the following:
* the identification and implementation of a detailed operating expense
reduction plan;
* assistance with the recruitment of a suitable Financial Director;
* a review and assessment of the coal assets of the Company;
* assisting with the sale of the Company`s non-core assets;
* assisting in negotiating, in advance, a restructured bank facility
upon the successful implementation of the turnaround;
* the provision of a rolling quarterly cash flow management programme;
and
* detailed reporting to the board on progress achieved on a regular
basis.
3 DURATION
The services will be rendered by Matuson for an initial period of six
months, which may be cancelled by either party with written notice at the
end of the initial period.
4 FEES
The fees payable to Matuson will be a retainer of R50 000 per month to be
invoiced monthly in arrears. In addition to this fee, Matuson will have an
option to subscribe for shares in Brikor as detailed in 5 below.
5 THE OPTION
5.1 The Company will grant Matuson an option until 26 May 2012, to
subscribe for 10% of the Company`s equity (representing 64 524 203
shares) at the ruling market price of the Company`s shares on the JSE
Limited on 26 May 2011 of 8 cents per share, amounting to R5 163 936.
These shares will be issued for cash should the option be exercised.
5.2 In the event that Matuson`s services are terminated after the initial
6 month period, the option period shall be reduced to one month after
such termination.
6 CONDITION PRECEDENT
The granting of the option is conditional upon the approval of the specific
issue of shares for cash by the shareholders of Brikor.
7 UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE OPTION
The unaudited pro forma financial effects set out below are provided for
illustrative purposes only to provide information about how the exercise of
the option may have impacted on Brikor`s results and financial position.
Due to the nature of the unaudited pro forma financial effects, it may not
give a fair presentation of the Company`s results and financial position
after the exercise of the option. The unaudited pro forma financial effects
are based on the audited annual financial information of Brikor at 28
February 2011. The directors of Brikor are responsible for the preparation
of the unaudited pro forma financial effects.
Before the Pro forma % Change
exercise of after the
the option exercise of
audited the option
annual unaudited
28 February 28 February
2011(1) 2011
Loss per share (cents)(2,4) (34,91) (31,98) 8,39
Headline loss per share (6,64) (6,35) 4,37
(cents)(2,4)
Net asset value per share 5,25 5,51 4,95
(cents)(3,5)
Net tangible asset value per 4,20 4,55 8,33
share (cents)(3,5)
Weighted average shares in 627 274 691 799 10,29
issue (`000) with effect from
01/03/2010 (2,4)
Shares in issue at year end 629 342 693 866 10,25
(`000)
Notes:
1) The "Before the exercise of the option" column has been extracted without
adjustment, from the audited annual results of Brikor for the year ended 28
February 2011.
2) The unaudited pro forma financial effects on the loss and headline loss
were prepared on the basis that the option had been exercised on 1 March
2010.
3) The unaudited pro forma financial effects on the net asset value and
tangible net asset value were prepared on the basis that the option had
been exercised on 28 February 2011.
4) The "After the exercise of the option" basic loss per share and headline
earnings per share have been adjusted to include the following:
- Cost of the option is estimated at 3,5 cents per share based on a
valuation of the option using the Black Scholes option pricing model,
for an aggregate cost amount of R2 258 347;
- No tax effect is recorded due to the accumulated tax losses for which
no deferred tax asset was recorded.
5) The "After the exercise of the option" net asset value and net tangible
asset value per share have been adjusted to include the following:
- Cash received for the issue of shares at 8 cents per share for an
amount of R5 161 936.
8 CATEGORISATION OF THE TRANSACTION AND CIRCULAR TO SHAREHOLDERS
The exercising of the option is classified as a specific issue of shares
for cash in terms of sections 5.51 and 5.53 of the JSE Listings
Requirements and, accordingly, the granting of the option is subject to the
approval of the shareholders of Brikor by way of an ordinary resolution.
A circular, containing a notice of a general meeting of shareholders, will
be dispatched to shareholders in due course.
9 FURTHER ANNOUNCEMENT
Shareholders will be notified once the shareholders have approved the
specific issue of shares.
Nigel
21 September 2011
Designated Adviser
Exchange Sponsors
Date: 21/09/2011 17:02:01 Supplied by www.sharenet.co.za
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