Wrap Text
Finalisation announcement in respect of a Black Economic Empowerment (“BEE”) Transaction and withdrawal of cautionar
BUILDMAX LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1995/012209/06)
Share Code: BDM
ISIN Code: ZAE000011250
("Buildmax" or the Company")
FINALISATION ANNOUNCEMENT IN RESPECT OF A BLACK ECONOMIC EMPOWERMENT (BEE) TRANSACTION
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the cautionary announcement released on SENS on 27 November
2012, and renewed on 11 January 2013, advising shareholders that Buildmax had, on 26 November
2012, signed a Memorandum of Understanding (MoU) to introduce additional BEE shareholding
into the broader Buildmax businesses (the BEE Transaction).
The board of directors of Buildmax (the Board) is pleased to announce that binding
agreements have now been concluded between, inter alia, Buildmax and Tylox (Pty) Ltd
(to be renamed Mbewu Capital (RF) (Pty) Ltd) (the BEE Partner) pursuant to which the
BEE Partner will acquire a direct 10% interest in the mining services business unit of
Buildmax, incorporating Diesel Power Opencast Mining (Pty) Limited, Buildmax Equipment and
Services (Pty) Ltd and Buildmax Equipment (Pty) Ltd (the Mining Services Business Unit).
The BEE Partner is a private company incorporated in South Africa, in which 40% of the
shares are held by Harmoserve (Pty) Ltd (Harmoserve), a 100% black owned investment holding
company, and the remaining 60% are held by the Inqolobane Investment Trust, a broad-based
trust (the Trust).
2. Rationale for the BEE Transaction
Buildmax is fully committed to the advancement of broad-based black economic empowerment
within the mining industry and is governed by the terms of the Codes of Good Practice, issued
under the Broad-Based Black Economic Empowerment Act, 2003 (the Codes), as well as the
requirements of the Broad-Based Socio-Economic Empowerment Charter for the South African
mining and Minerals Industry (the Mining Charter).
Transformation and partnering with appropriate BEE shareholders is critical to the Companys
ability to continue to build its business and has become a fundamental requirement in order
to conduct business in the industries that the company serves.
This transaction will result in the Company attaining an effective BEE shareholding in excess
of 25%.
3. Salient features of the BEE Transaction
3.1. Buildmax will dispose of 100% of the shares held in, and claims against, the Mining Services
Business Unit, to Diesel Power Group Holdings (Pty) Ltd (Diesel Power Group Holdings), a
wholly-owned subsidiary of Buildmax, for a total consideration of R500 million;
3.2. Diesel Power Group Holdings will, in settlement of the consideration, issue cumulative,
redeemable preference shares with a face value of R500 million (the Preference Shares) to
Buildmax. The Preference Shares will bear interest at 6.1% and will be redeemable on an
undetermined future date, but not before the third anniversary of issue. The Preference Shares
shall rank ahead of the ordinary shares in Diesel Power Group Holdings in relation to their
entitlement to receive dividends or any amount otherwise due, save that the directors of
Diesel Power Group Holdings shall be entitled, in their discretion, to declare ordinary dividends
in an amount not exceeding R2 million (increased annually by CPI) in any financial year.
3.3. Immediately after the Preference Share issue by Diesel Power Group Holdings, the BEE Partner
will acquire 10 new shares in Diesel Power Group Holdings (amounting to 10% of the issued share
capital) for a total consideration of R10 (Subscription Shares).
3.4. For so long as the BEE Partner holds all of the Subscription Shares, it is entitled to appoint
one director to the Company. Shareholders are referred to the announcement released on SENS on
15 January 2013, in terms of which Mr Jackie Mathebula, a director of Harmoserve and the BEE
Partner, was appointed as an executive director of the Company.
3.5. Post implementation of the BEE Transaction, the ultimate indirect shareholding in the Mining
Services Business Unit will be as follows:
Effective %
shareholding
Harmoserve
4%
The Trust
6%
Buildmax
90%
4. Condition precedent
Implementation of the BEE Transaction, to the extent necessary, is subject to the written consent
of all debt providers to the Company.
5. The effective date
The effective date of the BEE Transaction will, subject to the fulfilment and/or waiver of the
condition precedent, be 1 March 2013.
6. Pro forma financial effects
The table below sets out the unaudited pro forma financial effects of the BEE Transaction on
the basic and diluted earnings per share and headline and diluted headline earnings per share
for the six months ended 31 August 2012 based on the assumption that the BEE Transaction took
place with effect from 1 March 2012.
The pro forma financial effects of the BEE Transaction on the Companys net assets and net tangible
assets per share as at 31 August 2012 are not significant (being less than 3% in accordance with
the definition contained in the JSE Limited (JSE) Listings Requirements).
The unaudited pro forma financial effects are presented for illustrative purposes only and, because
of their nature, may not fairly present Buildmaxs financial position or the results of its operations
after the BEE Transaction has been implemented. The unaudited pro forma financial effects are the
responsibility of the Board.
Before the
After the Percentage
BEE Transaction BEE Transaction change (%)
Basic earnings per
share (cents)
0.52
0.48
(7.7)
Diluted earnings per
share (cents)
0.51
0.47
(7.8)
Headline earnings per
share (cents) 0.52
0.48
(7.7)
Diluted headline
earnings per share (cents)
0.51
0.47
(7.8)
Number of shares and weighted
average number of shares in
issue (000s)
3 444 716
3 444 716
-
Diluted number of shares
in issue (000s)
3 521 716
3 521 716
-
Notes
i. The financial information as set out in the Before the BEE Transaction column has been extracted
without adjustment from the reviewed published interim results of Buildmax for the period ended 31
August 2012.
ii. The financial information as set out in the After the BEE Transaction column has been based
on the financial information as set out in the previous column having been adjusted for the effects
of the BEE Transaction.
iii. The basic and diluted earnings per share and the headline and diluted headline earnings per share
as set out in the After the BEE Transaction column are based on the reviewed interim statement of
comprehensive income for the six months ended 31 August 2012 for Buildmax and the assumptions that:
a. Transaction costs of R700 000 have been incurred. Excluding the impact of the non-recurring
transaction costs, the dilution in basic and headline earnings per share amounts to 5.8% and the
dilution in diluted basic and headline earnings per share amounts to 5.9%;
b. The profit attributable to outside shareholders increases by 10% of the net profit attributable to
the Mining Services Business Unit (that is, in proportion to the BEE Partners shareholding);
c. For the purposes of calculating the net profit attributable to the Mining Services Business Unit, the
reviewed results of the Mining Services Business Unit for the 6 months ended 31 August 2012 have been
used.These reviewed results were included in the consolidated results as at the same date which were
published
on a consolidated level.
d. The net profit attributable to the Mining Services Business Unit per (c) above, was adjusted to reflect
the effect of 6 months of preference dividends (accrued at 6.1%).
iv. With the exception of the transaction costs discussed under (iii)(a) above, the other adjustments are
expected to have a continuing effect on the Company.
7. Categorisation of the BEE Transaction
The BEE Transaction is classified as a category 2 transaction in terms of section 9 of the JSE Listings
Requirements. Shareholder approval is not required for a category 2 transaction.
8. Withdrawal of cautionary announcement
Following the publication of this announcement, shareholders are advised that caution is no longer required to be
exercised when dealing in Buildmax securities.
Benoni
15 February 2013
Sponsor to Buildmax
QuestCo (Pty) Limited
Legal advisers to Buildmax
Webber Wentzel
Date: 15/02/2013 01:50:00 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.
Sharenet Sites 
