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IFC - IFCA Technologies Limited - Further update to the disposal of IFCA
Software Proprietary Limited and renewal of cautionary
IFCA TECHNOLOGIES LIMITED
Incorporated in the Republic of South Africa
(Registration number 2006/030759/06)
Share code: IFC ISIN: ZAE000088555
("IFCA" or "the Company")
FURTHER UPDATE TO THE DISPOSAL OF IFCA SOFTWARE PROPRIETARY LIMITED AND RENEWAL
OF CAUTIONARY
Further to the terms announcement released on SENS on 5 August 2011, and the
subsequent updates to the market released on SENS, the most recent of which was
dated 23 January 2012, and using the terms defined therein unless otherwise
stated, shareholders are hereby provided with a further update thereto.
1 IFCA sWare Disposal
On 5 August 2011, it was announced on SENS ("initial announcement") that
IFCA had entered into an agreement with Squirewood Investments 99
Proprietary Limited ("Squirewood" or "the Acquiror"), in terms of which,
subject to the fulfilment or waiver of certain conditions precedent,
Squirewood will acquire 100% of the IFCA sWare Sale Shares and the IFCA
sWare Sale Claims from IFCA for a total consideration of R1 000.00.
On 23 January 2012 it was announced on SENS that the IFCA sWare Sale Shares
and IFCA sWare Sale Claims will no longer be acquired by Squirewood but by
a different entity and that, with the exception of the aforementioned
change in the Acquiror, the terms of the IFCA sWare Disposal will remain
materially unchanged since the initial announcement.
The Board is pleased to hereby advise shareholders that the Company has
entered into a Sale of Shares Agreement ("Disposal Agreement") with
Contisource Proprietary Limited ("Contisource") in terms of which, subject
to the fulfilment or waiver of the conditions precedent set out in
paragraph 4 below, Contisource will acquire from IFCA 9 637 167 ordinary
shares in the issued share capital of IFCA sWare constituting 100% of the
entire issued share capital of IFCA sWare ("IFCA sWare Sale Shares") and
all claims of whatsoever nature which IFCA may have against IFCA sWare on
the third business day after the date on which the last of the conditions
precedent set out in paragraph 4 below is fulfilled or waived ("closing
date") including a shareholder loan of R4 897 037.00 owed by IFCA sWare to
the Company ("IFCA sWare Sale Claims"), for a total consideration of R1
000.00 ("IFCA sWare Disposal").
Currently, IFCA sWare is the Company`s sole operating subsidiary and
accordingly, the IFCA sWare Disposal constitutes a disposal of IFCA`s
entire undertaking in terms of section 112 of the Companies Act.
Consequently, IFCA is required to obtain a fair and reasonable opinion from
an Independent Professional Expert, as well as the approval for the IFCA
sWare Disposal from shareholders, by way of a special resolution, in
accordance with section 115 of the Companies Act.
The opinion of the independent professional expert, being Charles Orbach &
Company Corporate Finance, and the notice to convene a general meeting of
IFCA shareholders to obtain such shareholder approval, will be included in
the Circular as detailed in paragraph 6 below.
It is the intention of the Board to remain listed on the AltX subsequent to
the IFCA sWare Disposal.
2 Nature of sWare and rationale for the IFCA sWare Disposal
IFCA sWare was originally formed for the sole purpose of marketing and
supporting the suite of software products of the Malaysian listed company,
IFCA MSC, under license in Africa.
IFCA sWare used to be an enterprise-wide integrated business solutions
provider and offered industry specific software solutions for four business
segments, namely Property Development and Management, Project Management,
Engineering and Construction, Hospitality and Finance & Leasing. IFCA sWare
is virtually dormant.
In terms of its license agreement, 50% of IFCA sWare`s software revenue was
paid to IFCA MSC. The business operated primarily through the use of
Malaysian consultants. However, this was at a very high cost to the South
African business.
It has been the intention of the Board to dispose of IFCA sWare and to
transform IFCA from a technology provider into a high growth business
incubator, which it will do by providing financial services and treasury
functions to facilitate the funding, re-engineering and development of
companies in, inter alia, the mining and resources, property,
infrastructure, telecommunications, agriculture, energy, marketing and
media sectors.
It is the Board`s belief that the Company`s new focus on "investment
incubation" will provide growth to the businesses in which IFCA invests, as
well as to its shareholders. The Board aims to invest in assets which will
provide growth to the Company. The Company`s approach will be acquisitive
and will focus on "entrepreneurial operators" in order to achieve composite
growth.
3 Consideration
The total consideration, payable by Contisource to the Company for the IFCA
sWare Sale Shares and IFCA sWare Sale Claims, is R1 000.00.
4 Effective date and conditions precedent
The IFCA sWare Disposal is subject to the fulfilment or waiver of the
following conditions precedent by no later than 15 May 2012:
- signature by IFCA and Squirewood of a written agreement, being a
Cancellation Agreement, which cancels the written agreement entered
into between them on 1 August 2011 in terms of which IFCA had agreed
to sell the IFCA sWare Sale Shares and IFCA sWare Sale Claims to
Squirewood;
- the Board passing a resolution to approve the IFCA sWare Disposal;
- shareholders of IFCA in general meeting passing the resolutions
necessary to give effect to the IFCA sWare Disposal in accordance and
compliance with the relevant requirements of the Companies Act, the
Listings Requirements of the JSE, the Memorandum of Incorporation and
the Takeover Regulations; and
- the Panel formally approving the IFCA sWare Disposal by either issuing
a compliance certificate in respect of the IFCA sWare Disposal, in
terms of section 119(4)(b) of the Companies Act, or exempting the IFCA
sWare Disposal in terms of section 119(6) of the Companies Act.
5 Pro forma financial effects
The unaudited pro forma financial effects, set out below, have been
prepared to illustrate the impact of the IFCA sWare Disposal on the
reported financial information of IFCA for the six months ended 30 June
2011, had the IFCA sWare Disposal occurred on 1 January 2011 for statement
of comprehensive income purposes and as at 30 June 2011 for statement of
financial position purposes. The financial effects are presented for
illustrative purposes only and because of their nature may not fairly
reflect IFCA`s results or financial position going forward.
The unaudited pro forma financial effects have been prepared using
accounting policies that are consistent with International Financial
Reporting Standards and with the basis on which the historical financial
information has been prepared in terms of the accounting policies adopted
by IFCA.
The Board is responsible for the compilation, contents and presentation of
the financial effects contained in this announcement and for the financial
information from which it has been prepared. Their responsibility includes
determining that: the unaudited pro forma financial effects have been
properly compiled on the basis stated; the basis is consistent with the
accounting policies of IFCA; and the pro forma adjustments are appropriate
for the purposes of the unaudited pro forma financial effects disclosed in
terms of the Listings Requirements of the JSE.
IFCA IFCA sWare Pro forma Percentag
reviewed Disposal after the e change
June 20111 pro forma IFCA sWare
effect2 Disposal
`000 `000 `000 (%)
Basic loss per share (4.88) 2.77 (2.11) (57)
(cents)3
Headline loss per (3.33) 0.74 (2.59) 22
share (cents)3
Net asset value per (2.38) 2.39 0.01 100
share (cents)4
Tangible net asset (2.38) 2.39 0.01 100
value per share
(cents)4
Weighted average 166 356 265 - 166 356 265 -
number of shares in
issue (000s)
Total number of 179 928 129 - 179 928 129 -
shares in issue
(000s)
Notes
1 The amounts in the "IFCA reviewed June 2011" column relate to the
reviewed results of IFCA and its subsidiaries for the six month period
ended 30 June 2011.
2 The amounts in the "IFCA sWare Disposal pro forma effect" column
relate to the unaudited results of IFCA sWare for the six month period
ended 30 June 2011 and reflects the effect that the entire issued
share capital of IFCA sWare and the shareholder loan of R4 897 037.00
owed by IFCA sWare to IFCA was sold for a total consideration of R1
000.
3 The effects on basic earnings per share and headline earnings per
share are calculated based on the assumption that the IFCA sWare
Disposal was effected on 1 January 2011.
4 The effects on net asset value per share and tangible net asset value
per share are calculated based on the assumption that the IFCA sWare
Disposal was effected as at 30 June 2011.
6 Further documentation
The Circular containing full details of, inter alia, the mandatory offer
and the IFCA sWare Disposal as well as a notice to convene a general
meeting of IFCA shareholders in order to consider and, if deemed fit to
pass, with or without modification, the resolutions necessary to approve
and implement, inter alia, the IFCA sWare Disposal, is in the process of
being finalised and approved. Shareholders are advised that the Circular
will not be released to shareholders by the end of February 2012 as
previously announced. However, the Board expects to distribute the Circular
to IFCA shareholders in due course. Shareholders will be kept updated with
regards to the actual date of distribution of the Circular.
7 Renewal of Cautionary
Further to the cautionary announcement dated 3 March 2011, and the
subsequent renewal of cautionary announcements, the most recent of which
was dated 23 January 2012, shareholders are advised that negotiations are
still in progress which, if successfully concluded, may have a material
effect on the price of the Company`s securities. As such, shareholders
should continue to exercise caution when dealing in the Company`s
securities, until a further announcement is made.
21 February 2012
Designated Adviser
Merchantec Capital
Legal Adviser to IFCA
Werksmans Attorneys
Auditors and Reporting Accountants to IFCA
Nolands
Independent Professional Expert
Charles Orbach & Company Corporate Finance
Date: 21/02/2012 17:10:01 Supplied by www.sharenet.co.za
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