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MORVEST BUSINESS GROUP LIMITED - Repurchase of shares in Morvest and financial effects

Release Date: 28/08/2012 16:35
Code(s): MOR     PDF:  
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Repurchase of shares in Morvest and financial effects

MORVEST BUSINESS GROUP LIMITED

(Incorporated in the Republic of South Africa)

(Registration No. 2003/012583/06)

Share code: MOR     ISIN code: ZAE000152567

(“Morvest” or “the Company”)

REPURCHASE OF ORDINARY SHARES IN MORVEST

  1. Introduction

    In terms of a general authority granted to Morvest or
    any of its subsidiaries to repurchase its ordinary
    shares by a special resolution passed by Morvest
    shareholders at the Annual General Meeting held on 22
    November 2011 ("the authority"), a maximum of 135 831
    723 ordinary shares (being 20% of the issued share
    capital) could be repurchased.

  2. Implementation

    In terms of paragraph 11.27 of the JSE Limited
    (“JSE”) Listings Requirements, Morvest announces that
    it has acquired through a series of open market
    transactions, 35 483 465 ordinary shares, equivalent
    to 5.2% of the issued share capital at the time of
    the granting of the authority, for a total
    consideration of R7 597 860.96. The repurchases were
    carried out between 23 November 2011 and 24 August
    2012. The highest price paid was 22 cents per share
    and the lowest price paid was 17 cents per share.
    The average price paid was 19 cents per share. The
    requirements of paragraph 5.72(a) of the JSE Listings
    Requirements have been complied with in the
    repurchasing of these shares. The extent of the
    authority remaining unfulfilled is 100 348 258
    ordinary shares, equivalent to 14.8% of the total
    number of shares in issue at the time of the
    authority being granted.
3.   Source of funds

     Repurchases to date have been funded from available cash
     and it is intended that future purchases will also be
     funded from available cash.

4.   Opinion of the directors

     The directors of Morvest have considered the effect of
     the share repurchases and confirm that:
         - Morvest will be able, in the ordinary course of
           business, to pay its debts for a period of 12
           months from the date of this announcement;
         - The consolidated assets of Morvest and its
           subsidiaries are in excess of the consolidated
           liabilities and will be so or 12 months after this
           announcement, measured in accordance with the
           accounting policies used in the audited results
           for the year ended 31 May 2011;
         - The ordinary share capital and consolidated
           reserves of Morvest and its subsidiaries will be
           adequate for ordinary business purposes for the 12
           month period from the date of this announcement;
         - The working capital of Morvest and its
           subsidiaries will be adequate for ordinary
           business purposes for a period of 12 months from
           the date of this announcement.

5.   Effect on Earnings and Net Asset Value per Share

     The table below sets out the unaudited pro forma
     financial effects of the share repurchase on Morvest for
     the year ended 31 May 2012.

     The unaudited pro forma financial effects have been
     prepared for illustrative purposes only, and, because of
     their nature, may not give a true reflection of the
     actual financial effects of the share repurchase. The
     pro forma financial effects have been calculated on the
     basis set out below and are the responsibility of the
     directors.
                                                  After
                                   Before
                                              Pro forma
                                   31 May
                                     2012   Adjustments

                                  (cents)       (cents)   % Change

                                     2.33          2.45        5%
     Earnings/Loss per ordinary
     share
     Headline profit / (loss)        6.81          7.15        5%
     per share
                                    35.11         35.91        2%
     Net asset value per share
     Net tangible asset value        1.44          0.69     (53%)
     per share
     Number of ordinary shares    679 159       679 159           -
     in issue ('000')
     Weighted average number of   522 617       497 676      (5%)
     ordinary shares in issue
     ('000')


      Assumptions:-

          1. The pro-forma adjustments to the statement of
             comprehensive income have been calculated on the
             assumption that the transaction was completed on 1
             June 2011.
          2. The pro-forma adjustments to the statement of
             financial position have been calculated on the
             assumption that the transaction was completed on
             31 May 2012.
          3. For the calculation of the Net asset value per
             share and the Net tangible asset value per share,
             the number of treasury shares was eliminated.


6.    Treasury shares

      All the shares have been repurchased by a subsidiary of
      Morvest and are being held as treasury shares. Following
      the repurchase of 35 483 465 shares, the Company holds
      56 272 499 ordinary shares equivalent to 8.28% in
      Treasury. The Company has 622 886 114 ordinary shares
      in issue excluding treasury shares. The cancelation and
      de-listing of the treasury shares will be considered at
      a future date under the provisions of the Companies Act,
      No 71 of 2008.
28 August 2012

Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)

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