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BDM - Buildmax Limited - Proposed Consolidation of Share Capital

Release Date: 02/05/2012 07:05
Code(s): BDM
Wrap Text

BDM - Buildmax Limited - Proposed Consolidation of Share Capital BUILDMAX LIMITED Incorporated in the Republic of South Africa Registration No. 1995/012209/06) Share Code: BDM ISIN Code: ZAE000011250 ("Buildmax" or "the Group" or "the Company") PROPOSED CONSOLIDATION OF SHARE CAPITAL 1. INTRODUCTION The board of directors of Buildmax ("the Board") wishes to advise shareholders of Buildmax ("Shareholders") of a proposed restructuring of the authorised and issued share capital of the Company by the consolidation of every 19 ordinary shares ("Shares") currently held in Buildmax with a par value of 1 (one) cents each into 1 (one) Share with a par value of 19 (nineteen) cents each ("the Share Consolidation"). As a result of the Share Consolidation Buildmax will have 181,300,839 Shares in issue and 315,789,474 authorised Shares. The proposed Share Consolidation follows on the successful disposal of all discontinued operations (as announced on SENS on 2 February 2012, 17 February 2012 and 9 March 2012), which has enabled management to focus all their attention on Buildmax`s growth ambitions by leveraging the Group`s systems, assets and intellectual capital within the Mining Services and Quarries Divisions to grow the Company and transform the Group into an opencast mining supply chain services and bulk civils earth works company. The Share Consolidation is in line with the Board`s strategy of restructuring the Company in order to deliver adequate returns to Buildmax`s shareholders. 2. RATIONALE FOR THE SHARE CONSOLIDATION The Board proposes the Share Consolidation for the following reasons: 2.1 It is expected that by consolidating the number of Shares, there will be a narrowing of the spread between the bid-to-buy price and the offer-to-sell price, resulting in a more stable market capitalisation of the Company. It is the opinion of the Board that shares that trade below R1.00 on the JSE Limited have a much higher spread between the bid-to-buy price and the offer-to-sell price, which can result in significant movements in the share price on small volumes traded. 2.2 The instability in the market capitalisation of the Company, as explained in point 2.1 above, ultimately affects shareholder value, which, in turn, may discourage potential investors. As a result, a Share Consolidation will not only provide additional confidence to existing shareholders, but also increase the attractiveness of Buildmax to other investors. 3. SUSPENSIVE CONDITIONS The Share Consolidation is subject to, inter alia, Shareholder and JSE Limited approval. 4. CIRCULAR TO SHAREHOLDERS A circular to Shareholders, setting out, inter alia, the proposed salient dates and times of the Share Consolidation and containing, inter alia, a notice of general meeting, will be posted to Shareholders within the next two months ("the Circular") and a further announcements will be released on SENS and published in the press when the Circular is posted. Benoni 2 May 2012 Sponsor QuestCo (Pty) Limited Date: 02/05/2012 07:05:04 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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