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Further cautionary announcement
Alert Steel Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2003/005144/06)
(Share Code: AET ISIN Code: ZAE000092847)
("Alert Steel" or "the Company")
Further cautionary announcement
in respect of:
- purchases of shares in Alert Steel by Cannistraro;
- disposals of various properties and property holding companies to Mr. Rayhaan Hassim;
- ruling by the JSE
and further cautionary announcement
1. Introduction and background
Shareholders are referred to the further cautionary announcement dated 11 February 2013
which, inter alia, referred to the purchase (“the CAS Transaction”) by Cannistraro
Investments 282 (Pty) Ltd (“Cannistraro”) of 47.5% of Alert Steel’s shares in issue from
Capital Africa Steel (Pty) Limited (“CAS”). This announcement sets out further details in
respect of this sale of shares transaction, as well as the details of certain other transactions,
as set out below.
2. Further detail in respect of the purchase of shares by Cannistraro from CAS
Shareholders are hereby advised that:
2.1. in terms of the CAS Transaction, Cannistraro agreed to purchase 24 734 906 shares in
Alert Steel from CAS for R6 million and also undertook to procure the release of CAS
from a bank guarantee of R7.5 million on the effective date of the CAS Transaction;
2.2. the aggregate consideration for CAS in respect of the CAS Transaction therefore
includes the sum of the purchase price of R6 million and the value of the guarantee to be
released as part of the CAS Transaction, and therefore an amount of R13.5 million in
aggregate, which equates to a price of 54.58 cents per share in Alert Steel being sold by
CAS to Cannistraro;
2.3. the CAS Transaction was subject to two conditions precedent being fulfilled, inter alia
approval of the CAS Transaction by the competition authorities within 45 days of
8 February 2013;
2.4. if and when the conditions precedent to the CAS Transaction are fulfilled, the purchase
by Cannistraro from CAS will be an affected transaction as defined in section 117 of the
Companies Act, 2008, resulting in Cannistraro having to make a mandatory offer to all
other shareholders of Alert Steel at 54.58 cents per share in terms of section 123 of the
Companies Act, 2008 (“the Mandatory Offer”).
2
3. Purchase of shares by Cannistraro from Nedbank
3.1. The board of Alert was informed on 25 February 2013 that Cannistraro entered into an
agreement with Nedbank Limited (“Nedbank)” to purchase 10 287 033 issued ordinary
shares in Alert Steel (“the Nedbank Sale Shares”) at 9.72 cents per share for an
aggregate purchase price of R1 million (“the Nedbank Transaction”).
3.2. The Nedbank Transaction is subject to two conditions precedent being fulfilled, including,
inter alia, approval of the Nedbank Transaction by the competition authorities within
45 days of 15 February 2013.
3.3. The Nedbank Sale Shares represent 19.78% of the currently issued shares in Alert Steel.
4. Disposal of property holding companies and other immovable property
4.1. On or about 1 March 2013, the following transactions (“the Property Disposals”) were
concluded:
4.1.1. Alert Steel Corporate Services (Pty) Ltd (“ASCS”) (a wholly-owned subsidiary of
Alert Steel) entered into a sale of shares and claims agreement with Rayhaan
Hassim (“Mr Hassim”) and Aquarella Investments 454 (Pty) Limited (“Aquarella”)
(which owns the head office property of the Company in East Lynne, Pretoria), in
terms of which ASCS sold all of its shares in and claims against Aquarella to
Mr Hassim for a purchase price equal to R1.00 in respect of such shares and the
face value of such claims (which claims, as at the date of signature of such
agreement, amounted to approximately R11,38 million);
4.1.2. ASCS entered into a further sale of shares and claims agreement with Mr Hassim
and Anchor Park Investments 114 (Pty) Limited (“Anchor Park”) (which owns two
properties in Rosslyn, Pretoria), in terms of which ASCS sold all of its shares in
and claims against Anchor Park to Mr Hassim, for a purchase price equal to
R6,600,000.00 (six million six hundred thousand Rand); and
4.1.3. Alert Steel (Pty) Ltd (a wholly-owned subsidiary of the Company) entered into a
deed of sale with Aquarella in terms of which it agreed to sell to Aquarella certain
immovable property situated in Louis Trichardt, for a purchase price equal to
R2,4 million.
4.2. The disposals of shares and claims referred to in paragraphs 4.1.1. and 4.1.2 above will
be to Mr. Hassim personally, who owns all the issued shares of Cannistraro, which will
acquire shares in the Company subsequent to the fulfilment of all conditions precedent to
the CAS Transaction and the Nedbank Transaction (which, as set out above, includes
the approval of such transactions by the competition authorities).
4.3. The JSE has ruled that, in the current circumstances, the Property Disposals are not
related party transactions.
4.4. The aggregate purchase price in respect of all of the Property Disposals combined is an
aggregate amount of approximately R20,38 million. The Property Disposals are
accordingly categorised, in terms of the JSE Limited’s Listings Requirements, as a
Category 2 transaction.
4.5. All of the suspensive conditions to the Property Disposals have either been fulfilled or
waived by the parties thereto.
4.6. Shareholders are further notified that Alert Steel (Pty) Ltd has concluded two lease
agreements with Aquarella in respect of the properties referred to in paragraphs 4.1.1
and 4.1.3 above, for a period of 60 months subsequent to the last day of the calendar
month in which the sale agreements referred to in paragraphs 4.1.1 and 4.1.3
respectively are implemented.
4.7. The reasons for the conclusion of the Property Disposals are that Alert Steel no longer
wishes to own the relevant immovable properties, and that such sales will, through the
discharge of the purchase considerations in respect thereof, result in a reduction of the
debt owing by Alert Steel to Cannistraro.
4.8. The unaudited pro forma financial effects of the disposals on Alert Steel shareholders set
out below are based on the annual audited consolidated results of Alert Steel and its
subsidiaries for the year ended 30 June 2012. The unaudited pro forma financial effects
are the responsibility of the board of directors of Alert Steel and have been prepared for
illustrative purposes only and because of their pro forma nature may not fairly present
Alert Steel’s financial position or results of operations after the disposals. The directors of
Alert Steel are responsible for the preparation of the unaudited pro forma financial
effects.
“Before the Pro forma “After
disposals“ the disposals”
audited unaudited
30 June 2012(1) 30 June 2012 Change
Loss per share
(cents)(2)(3) (5.4) (4.7) 13.7%
Headline loss per share
(cents) (2)(3) (4.3) (4.5) (5.28)%
Net asset value per share
(cents) (4)(5) (0.1) 0.3 622%
Net tangible asset value
per share (cents) (4)(5) (0.2) 0.1 159%
Weighted average shares
in issue (‘000) 1 344 1 344
Shares in issue at year
end (‘000) 4 085 4 085
Notes:
(1) The "Before the disposals" column has been extracted, without adjustment, from the
audited results of Alert Steel for the year ended 30 June 2012.
(2) The unaudited pro forma financial effects on the loss and headline loss per share
were prepared on the basis that the disposals were completed on 1 July 2011.
(3) The "After the disposals" basic loss per share and headline loss per share have been
adjusted with a profit on the disposals of R12 000 000, which are expected to have a
non-continuing effect.
(4) The unaudited pro forma financial effects on the net asset value and net tangible
asset value per share were prepared on the basis that the disposals were completed
on 30 June 2012.
(5) The "After the disposals" net asset value and net tangible asset value per share have
been adjusted with the following:
• the book value of the properties of R66 372 000; and
• settlement of outstanding loans with various parties.
4.9. The Property Disposals will accordingly not amount to a disposal of the greater part of
the assets or undertaking of Alert Steel as defined in section 112 of the Companies Act
and accordingly do not require a special resolution by Alert Steel as holding company.
5. Further cautionary announcement
Further detailed announcements will be made in due course in respect of the Mandatory
Offer to be made. Shareholders are therefore advised to continue exercising caution when
dealing in the Company’s securities until such further announcements have been made.
26 March 2013
Johannesburg
Designated Advisor
Exchange Sponsors
Date: 26/03/2013 09:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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