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Sale of Asset, Withdrawal Cautionary Announcement, Posting Of Circular And Notice Of General Meeting
VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN
ISIN: ZAE000163382
(“Vunani” or “the Company” or “the Group”)
SALE OF AN ASSET BY A SUBSIDIARY, WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT,
POSTING OF CIRCULAR AND NOTICE OF GENERAL MEETING
1. BACKGROUND INFORMATION
Nature of business of the Group:
Vunani is a majority black-owned and managed diversified financial services group, which operates
through five reportable segments as described below, which are the Group’s strategic business
segments, offering different products and services. These segments are managed separately, requiring
different skill, technology and marketing strategies and are as follows:
- Asset management;
- Investment banking and advisory;
- Investment holdings;
- Securities broking; and
- Properties investments and developments.
Sale of an asset by a subsidiary company:
Shareholders are referred to the SENS announcements, dated 12 and 16 October 2012 (“the
Announcements”), wherein, inter alia, the sale via private placings to institutional investors of a total
11 912 903 units in Vunani Property Investment Fund Limited (“VPIF”) at an aggregate value of
R105 879 998 were announced (“the category 2 transactions”).
Prior to the category 2 transactions, Vunani Properties Proprietary Limited (“Vunani Properties”) owed an
intercompany loan to Vunani Capital Proprietary Limited (“Vunani Capital”) in the sum of R59 770 928.00
(the “Intercompany Loan”) and owned 18 151 318 VPIF units.
Vunani is now seeking to complete the disposal of the VPIF units by disposing of the remaining
6 238 415 VPIF units.
Rationale for the VPIF Disposal:
As indicated in the Announcements the proceeds from the disposal of the 18 151 318 VPIF units (the
“VPIF Disposal”) will be utilised to repay loans in Vunani Properties, including the Intercompany Loan.
The balance will be distributed to Vunani Properties shareholders for purposes of settling the Group’s
remaining debt obligations.
The application of the proceeds derived from the VPIF Disposal will result in a substantial portion of the
Group’s outstanding debt obligations being settled.
Board approval:
The respective boards of directors of Vunani and Vunani Properties passed resolutions,dated 2 October
2012, approving the proposed VPIF Disposal. An irrevocable undertaking has been received from the
Company’s majority shareholder, Vunani Group Proprietary Limited (which holds 72.4% of the Vunani
shares in issue), relating to the approval of the VPIF Disposal.
2. THE VPIF DISPOSAL AND CATEGORISATION THEREOF IN TERMS OF THE JSE LIMITED
LISTINGS REQUIREMENTS (“Listings Requirements”)
As advised in the Announcements, 11 912 903 VPIF units at an aggregate value of R105 879 998 were
sold as detailed below:
Date Number of VPIF units Price per VPIF unit
9 October 2012 1 612 903 930 cents
11 October 2012 1 200 000 900 cents
12 October 2012 9 100 000 880 cents
The above disposals are individually categorised in terms of the Listings Requirements as category 2
transactions. However, the aggregation principle in terms of the Listings Requirements applies to the
VPIF Disposal as a whole, and the sale of the remaining balance of 6 238 415 VPIF units (“the remaining
VPIF units”) results in a Category 1 transaction, which requires shareholders’ approval.
Once shareholders’ approval has been obtained in general meeting for the disposal of the remaining VPIF
units, the disposal will be undertaken via a bookbuild process. Investec Corporate Finance has been
appointed as the bookrunner in this regard. (“the Bookrunner”). The Bookrunner will obtain indications of
interest from interested parties to acquire VPIF units as part of a bookbuilding process. It is the intention
of the Bookrunner to first contact at least the top 7 institutions in the market to ascertain interest and price
and depending on the interest shown or lack thereof to contact other institutions. Following this book-
building process, the placing price will be determined based on an analysis of market demand. The basis
of allocation of the VPIF units will be determined by the Bookrunner in its sole discretion and will be done
on an equitable basis taking into consideration the price and quantity of units requested by each
interested party. The eligible parties selected by the Bookrunner will be advised of the number of VPIF
units they have been allocated once the placing price has been determined.
Other than obtaining the approval of shareholders for the disposal of the remaining VPIF units, there are
no other conditions pertaining thereto or any other regulatory approvals required.
3. FINANCIAL EFFECTS
The unaudited consolidated pro forma financial effects of the VPIF Disposal, for which the directors are
responsible, are provided for illustrative purposes only to show the effect of the VPIF Disposal on earnings
per share (“EPS”), diluted earnings per share (“DEPS”), headline earnings per share (“HEPS”) and diluted
headline earnings per share (“DHEPS”) as if the VPIF disposal had taken effect on 1 January 2012 and
on a net asset value (“NAVPS”) and net tangible asset value per share (“NTAVPS”) as if the VPIF
Disposal had taken effect on 30 June 2012. Because of their nature, the unaudited consolidated pro
forma financial effects may not give a fair presentation of the group’s financial position, results of
operations, changes in equity or cash flows subsequent to the VPIF Disposal. The unaudited
consolidated pro forma financial effects have been compiled from the unaudited condensed consolidated
results of the Company for the six months ended 30 June 2012 and are presented in a manner consistent
with the format and accounting policies adopted by the Company and have been adjusted as described in
the notes set out below:
Unaudited
Pro forma
After the
disposal of Unaudited
the remaining Pro forma
Unaudited VPIF units After the
Unaudited Pro forma but excluding entire
30.6.2012 After the the category VPIF
Before the VPIF category 2 2 Disposal
Disposal transactions transactions (Column 4
(Column 1 / (Column 2 / % (Column 3 / % / Note 2 & %
Note 1) Note 2 & 3) change Note 2 & 3) change 3) change
EPS and DEPS
(cents) 14.2 19.7 38.7 4.1 20.8 23.8 67.6
HEPS AND
DHEPS (cents) 19.3 24.8 28.5 4.1 16.6 28.9 49.7
NAVPS (cents) 204.0 208.6 2.3 3.7 1.8 212.3 4.1
NTAVPS (cents) 170.9 175.5 2.7 3.7 2.1 179.2 4.9
Number of
ordinary shares
in issue at period
end (net of
treasury
shares)(‘000) 105 415 105 415 105 415 105 415
Weighted
average number
of shares in
issue at period
end (‘000) 105 415 105 415 105 415 105 415
Notes:
1. Column 1 information has been extracted from the Company’s unaudited condensed
consolidated results for the six months ended 30 June 2012.
2. EPS and HEPS in columns 2 and 3 have been re-presented when compared to the SENS
announcements released on 12 and 16 October 2012.
3. Column 2, 3 and 4 effects relating to the EPS, DEPS, HEPS and DHEPS are based on the
following assumptions and information:
2.1 the category 2 transactions at the prices detailed in paragraph 2 above and at an
assumed price of 925 cents per VPIF unit in respect of the remaining VPIF units (the
“proceeds”) were effective 1 January 2012. The difference between the proceeds and
the fair value on the disposed units at 1 January 2012 has been processed as a fair
value adjustment. The fair value of the units at 1 January 2012 was 720 cents per unit.
The result of this adjustment (net of taxation and after non-controlling shareholders’
interest) is an increase in profit attributable to equity holders of Vunani of:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R12.7 million R8.1 million R20.8million
2.2 The fair value adjustment to 30 June 2012 and related deferred taxation on the
disposed VPIF units has been eliminated. The result of this adjustment (net of taxation
and after non-controlling shareholders’ interest) translates to a decrease in profit
attributable to equity holders of Vunani of:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R 7.9 million R 4.2 million R 12.1 million
2.3 Distributions on the VPIF units of 27 cents per unit together with the tax effect thereon
have been eliminated. The result of this adjustment (net of taxation and after non-
controlling shareholders’ interest) is a decrease in profit attributable to equity holders of
Vunani of:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R 1.8 million R 0.9 million R 2.7 million
2.4 It has been assumed that the proceeds have been utilised to fully reduce funding in
Vunani Properties with an average interest rate of 9.2% over the six month period.
Furthermore, it has been assumed that the balance of the proceeds over and above the
value of the Vunani Properties loan are utilised to reduce borrowings in Vunani Capital
with an average interest rate of 9% over the six month period. The result of this
adjustment (net of taxation and after non-controlling shareholders’ interest) is an
increase in profit attributable to equity holders of Vunani of
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R 2.8 million R1.3 million R4.1 million
3 Column 2, 3 and 4 effects relating to the NAVPS and TNAVPS are based on the following
assumptions and information:
3.1 The category 2 transactions at the prices detailed in paragraph 1 above and at an
assumed price of 925 cents per VPIF unit in respect of the remaining VPIF units (the
“proceeds”) were effective 30 June 2012. The difference between the proceeds and
the fair value on the disposed units at 30 June 2012 has been processed as a fair value
adjustment. The fair value of the units at 30 June 2012 was 825 cents per unit. The
result of this adjustment (net of taxation and after non-controlling shareholders’ interest)
is an increase in profit attributable to equity holders of Vunani of:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R 4.8 million R 4.0 million R 8.8 million
3.2 It has been assumed that the proceeds have been utilised to reduce funding in Vunani
Capital. This will have an effect of reducing other investments and other financial
liabilities by:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R 105.9 million R 57.7 million R 163.6 million
3.3 It has been assumed that Vunani Properties has estimated assessed tax losses and
capital gains tax payable will be offset against these losses. After the utilisation of these
estimated tax losses, the amount of current taxation will increased by:
Category 2 transactions Remaining VPIF units Aggregate VPIF disposal
R- million R3.2 million R3.2 million
The adjustments relating to interest on debt settlement and tax will have a continuing effect.
4. WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
Having regard to the information set out above, the cautionary announcement is hereby withdrawn.
5. POSTING OF CIRCULAR AND NOTICE OF GENERAL MEETING
Shareholders are advised that a circular, containing:
- details relating to the disposal of an asset by a subsidiary company; and
- a notice of a general meeting of shareholders of the company to be held at the company’s offices,
Vunani House, Athol Ridge Office Park, 151 Katherine Street, Sandown, Sandton on Friday, 14
December 2012 at 08:00,
will be posted to them today.
The following dates should be noted:
Last day to trade to be eligible to vote at the Friday, 30 November 2012
general meeting
Record date for determining those shareholders Friday, 7 December 2012
entitled to vote at the general meeting
Last day for receipt of forms of proxy for the general By 08:00 on Wednesday, 12
meeting December 2012 or they may be
handed to the Chairman of the meeting
at any time prior to the commencement
of voting on the ordinary resolutions
tabled at the general meeting.
Sandton
16 November 2012
Investment Bank and Joint Corporate Adviser
Investec Bank Limited
Joint Corporate Adviser
Vunani Corporate Finance
Designated Adviser
Grindrod Bank Limited
Date: 16/11/2012 01:22:00 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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