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SAL/SALD - Sallies Limited - Financial effects and withdrawal of cautionary
announcement
Sallies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1903/001879/06)
Share code: SAL ISIN: ZAE000022588
JSE Code: SALD ISIN: ZAE000117305
("Sallies" or "the Company")
FINANCIAL EFFECTS REGARDING THE MANDATORY OFFER BY FLUORMIN PLC OR A WHOLLY
OWNED SUBSIDIARY TO ALL REMAINING SALLIES SHAREHOLDERS AND CONVERTIBLE
DEBENTURE HOLDERS ("SALLIES SECURITY HOLDERS") AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
INTRODUCTION
Sallies Security Holders are referred to the SENS announcement on 9
September 2011 regarding the mandatory offer whereby Fluormin Plc. will make
a mandatory offer to minority security holders through schemes of
arrangement ("Schemes") in terms of section 114 of the Companies Act, No 71
of 2008 ("the Act") and if implemented, Sallies Security Holders may elect
to receive:
* in the case of Sallies ordinary shareholders, 0.0277 Fluormin ordinary
shares for every one Sallies ordinary share held; alternatively, or in
the absence of any election by a Sallies ordinary shareholder, a cash
consideration of 14 cents for every one Sallies ordinary share held
(the "Cash Consideration");
* in the case of Sallies convertible debenture holders, 0.0646 Fluormin
ordinary shares for every one Sallies convertible debenture held;
alternatively, or in the absence of any election by a Sallies
convertible debenture holder, a cash consideration of 50 cents for
every one Sallies convertible debenture held; or
* in the case of Sallies option holders, a cash consideration equivalent
to the "in the money" value of the Sallies options on a net cash
cancellation basis, being an amount equal to the difference between the
Cash Consideration and the strike price of the Sallies options, upon
the Schemes becoming operative. Option holders who do not accept the
cash offer will be permitted to retain their options and exercise them
in accordance with their terms. The election by Sallies ordinary
shareholders and Sallies convertible debenture holders of Fluormin
ordinary shares in the specified ratios is collectively referred to as
the "Stock Consideration".
Should any of the Schemes fail, Fluormin will still be liable to make an
unconditional mandatory offer in terms of section 123 of the Act in respect
of the relevant class of securities.
PRO FORMA FINANCIAL EFFECTS OF THE ELECTION OF THE STOCK CONSIDERATION ON A
SALLIES ORDINARY SHAREHOLDER AND A SALLIES CONVERTIBLE DEBENTURE HOLDER
The table below sets out the unaudited pro forma financial effects of the
election of the Stock Consideration on a Sallies ordinary shareholder and a
Sallies convertible debenture holder. The unaudited pro forma financial
effects have been prepared in accordance with IFRS and are based on the
published, audited results of Sallies and of Fluormin for the year ended 30
June 2011. The preparation of the unaudited pro forma financial effects is
the responsibility of the Sallies directors and is provided for illustrative
purposes only in order to provide information about how the election of the
Stock Consideration may have affected Sallies ordinary shareholders and
Sallies convertible debenture holders. Due to the nature of the unaudited
pro forma financial effects, it may not be a true reflection of the actual
impact of the election of the Stock Consideration. It has been assumed for
the purposes of the pro forma financial effects of the election of the Stock
Consideration on a Sallies ordinary shareholder and a Sallies Convertible
debenture holder that 100% of the Sallies ordinary shareholders and Sallies
convertible debenture holders have elected the Stock Consideration.
Per Sallies ordinary Before 1 Implied after Percentage
share (pence) the election change to
of the Stock Sallies
Consideration ordinary
assuming an shareholder
equity
consideration
of 0.0277 new
Fluormin
ordinary
shares for
every 1
Sallies
ordinary share
Earnings and diluted (0.476) 0.005 2 101
earnings
Headline and diluted (0.459) (0.280) 2 39
headline earnings
Net asset value 0.203 0.012 3 (94)
Tangible net asset 0.203 0.012 3 (94)
value
Notes:
1. The "Before" column reflects the published audited financial results of
Sallies for the year ended 30 June 2011.
2. For the purposes of calculating earnings, diluted earnings, headline
earnings and diluted headline earnings per Sallies ordinary share after
the election of the Stock Consideration it was assumed that:
a. The Schemes became operational and were effective on 1 July 2010;
b. Sallies` audited statement of comprehensive income for the year ended
30 June 2011, adjusted for the settlement of the convertible loan
facility granted to Sallies by TSC Investments Ltd pursuant to a
convertible loan agreement dated 23 June 2011 entered into between
Sallies and TSC Investments Ltd ("TSC Loan") in Sallies ordinary
shares, has been consolidated by Fluormin based on Fluormin`s audited
statement of comprehensive income for the year ended 30 June 2011, as
adjusted for the sale of its base metals projects, the acquisition of a
63 % shareholding in Sallies on 8 September 2011, the acquisition of a
20% shareholding in Kenya Fluorspar Company Limited ("KFC") and the
issue of shares for cash to Stanley Nominees Limited, the promoters of
Fluormin and Integrated Nominees. The pro forma statement of
comprehensive income of Fluormin following the implementation of the
settlement of the Stock Consideration, assumes that 100% of the Sallies
ordinary shareholders and Sallies convertible debenture holders elect
the Stock Consideration;
c. 0.0277 new Fluormin ordinary shares are received for every 1 Sallies
ordinary share held by a Sallies ordinary shareholder with effect from
1 July 2010; and
d. The estimated transaction costs of GBP 150 000 have been expensed.
3. For the purposes of calculating the net asset value and net tangible
asset value per Sallies ordinary share after the election of the Stock
Consideration it was assumed that:
a. The Schemes were implemented on 30 June 2011 for statement of financial
position purposes;
b. Sallies audited statement of financial position for the year ended 30
June 2011, adjusted for the settlement of the TSC Loan in Sallies
ordinary shares, has been consolidated by Fluormin based on Fluormin`s
audited statement of financial position for the year ended 30 June
2011, as adjusted for the sale of its base metals projects, the
acquisition of a 63% shareholding in Sallies on 8 September 2011, the
acquisition of a 20% shareholding in KFC and the issue of shares for
cash to Stanley Nominees Limited, the promoters of Fluormin and
Integrated Nominees. The pro forma statement of financial position of
Fluormin following the implementation of the settlement of the Stock
Consideration, assumes that 100% of the Sallies ordinary shareholders
and Sallies convertible debenture holders elect the Stock
Consideration;
c. 0.0277 new Fluormin ordinary shares are received for every 1 Sallies
ordinary share held by Sallies ordinary shareholders with effect from 1
July 2010; and
d. The estimated transaction costs of GBP 150 000 have been expensed.
Per Sallies Before 1 Implied after the Percentage
convertible election of the change to
debenture Stock Sallies
(pence) Consideration convertible
assuming an debenture
equity holders
consideration of
0.0646 new
Fluormin ordinary
shares for every
1 Sallies
convertible
debenture
Earnings and 0.004 0.005 2 25
diluted earnings
Headline and 0.004 (0.280) 2 (7100)
diluted headline
earnings
Net asset value 0.045 0.012 3 (74)
Tangible net 0.045 0.012 3 (74)
asset value
Notes:
1. The "Before" column reflects the debenture interest payable in respect
of 1 Sallies convertible debenture in the earnings and diluted earnings
per Sallies convertible debenture column and the nominal value of the
Sallies convertible debentures in the net asset value and net tangible
asset value per Sallies convertible debenture column.
2. For the purposes of calculating earnings, diluted earnings, headline
earnings and diluted headline earnings per Sallies convertible
debenture after the election of the Stock Consideration it was assumed
that:
a. The Schemes became operational and were effective on 1 July 2010;
b. Sallies audited statement of comprehensive income for the year ended 30
June 2011, adjusted for the settlement of the TSC Loan in Sallies
ordinary shares, has been consolidated by Fluormin based on Fluormin`s
audited statement of comprehensive income for the year ended 30 June
2011, as adjusted for the sale of its base metals projects, the
acquisition of a 63% shareholding in Sallies on 8 September 2011, the
acquisition of a 20% shareholding in KFC and the issue of shares for
cash to Stanley Nominees Limited, the promoters of Fluormin and
Integrated Nominees. The pro forma statement of comprehensive income of
Fluormin following the implementation of the settlement of the Stock
Consideration, assumes that 100% of the Sallies ordinary shareholders
and Sallies convertible debenture holders elect the Stock
Consideration;
c. 0.0646 new Fluormin ordinary shares is received for every 1 Sallies
convertible debenture held by Sallies convertible debenture holders
with effect from 1 July 2010; and
d. The estimated transaction costs of GBP 150 000 have been expensed.
3. For the purposes of calculating the net asset value and net tangible
asset value per Sallies convertible debenture after the election of the
Stock Consideration it was assumed that:
a. The Schemes were implemented on 30 June 2011 for statement of financial
position purposes;
b. Sallies audited statement of financial position for the year ended 30
June 2011, adjusted for the settlement of the TSC Loan in Sallies
ordinary shares, has been consolidated by Fluormin based on Fluormin`s
audited statement of financial position for the year ended 30 June
2011, as adjusted for the sale of its base metals projects, the
acquisition of a 63% shareholding in Sallies on 8 September 2011, the
acquisition of a 20% shareholding in KFC and the issue of shares for
cash to Stanley Nominees Limited, the promoters of Fluormin and
Integrated Nominees. The pro forma statement of financial position of
Fluormin following the implementation of the settlement of the Stock
Consideration, assumes that 100% of the Sallies ordinary shareholders
and Sallies convertible debenture holders elect the Stock
Consideration;
c. 0.0646 new Fluormin ordinary shares are received for every 1 Sallies
convertible debenture held by Sallies convertible debenture holders
with effect from 1 July 2010; and
d. The estimated transaction costs of GBP 150 000 have been expensed.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the disclosure of the financial effects of the mandatory
offer, Sallies Security Holders are no longer required to exercise
caution when dealing in their Sallies securities and accordingly, the
cautionary announcement is hereby withdrawn.
Pretoria
21 October 2011
Sponsor: Bridge Capital Advisors (Pty) Limited
Reporting Accountant and Auditor: BDO (South Africa) Incorporated
Legal Advisor to Fluormin Plc. Fasken Martineau DuMoulin (Pty) Ltd
Legal Advisor to Sallies: Cliffe Dekker Hofmeyr Inc.
Date: 21/10/2011 07:05:01 Supplied by www.sharenet.co.za
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