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Announcement of a Rights Offer,the Proposed Disposal of Property Held by Labat,Withdrawal of Cautionary Announcement
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
(“Labat” or “the company”)
ISIN Code: ZAE 000018354 Share code: LAB
ANNOUNCEMENT OF A RIGHTS OFFER, THE PROPOSED DISPOSAL OF PROPERTY
HELD BY LABAT, WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT AND NEW
CAUTIONARY ANNOUNCEMENT
RIGHTS OFFER
Introduction
Shareholders are referred to the SENS announcement dated 13 September 2013 and are
advised that Labat will proceed with a partially underwritten renounceable rights offer to raise
R30 331 803 through the issue of 202 212 023 Shares at an issue price of 15 cents per Share,
in the ratio of 100 Rights Offer Shares for every 100 Shares held, at a subscription price of 15
cents per share (“the rights offer”).
Purpose of the Rights Offer
It is the view of the Directors that the recapitalisation of Labat by way of the rights offer is
required to enable the Labat Group to reduce borrowings, improve the balance sheet and
availability of cash in order to facilitate the future growth of the Group. The rights offer will
also facilitate the participation of existing Labat Minority Shareholders in this future.
Terms of the Rights Offer
202 212 023 Shares will be offered for subscription to Shareholders recorded in the Register
at the close of trade on a date that is yet to be announced. Qualifying Shareholders will
receive rights to subscribe for rights offer Shares on the basis of 100 new Shares for every
100 Shares held on the Record Date at the rights offer Price. The rights offer will raise equity
capital of R30 331 803 if it is fully subscribed.
Pro forma financial effects of the rights offer on Labat
The pro forma financial effects of the proposed rights offer will be announced in due course
once the pro forma financial effects have been finalised.
Conditions precedent
The conditions precedent to the rights offer as at the date of this announcement include the
approval of the rights offer circular and letter of allocation by the JSE Limited. The
registration of the rights offer circular and letter of allocation is not required by the
Commissioner of Intellectual Property and Companies.
Salient dates and times
The salient dates of the rights offer will be announced on SENS following the approval by the
JSE of the rights offer circular.
Circular to shareholders
A circular containing full details of the rights offer is in the process of being prepared and will
be posted to shareholders in due course.
General
The rights offer will not constitute an offer to any person in any jurisdiction to whom or in
which such offer is unlawful.
DISPOSAL OF PROPERTY
Introduction
As announced on SENS on 13 September 2013, the company was considering the disposal
of its SAMES property, which would require the approval of shareholders in a general meeting.
The company advises that it has received a firm offer dated 03 October 2013 for the SAMES
property from a related party.
The SAMES property is regarded as being non-core to the current and future business of
Labat. A decision has been taken to dispose of the property at a minimum consideration of
R17 million in cash as follows:
- the property is to be sold to Zatoblox (Pty) Ltd (“Zatoblox”), a related party to Labat,
for a purchase consideration of R17 million to be settled in cash; or
- alternatively, then the sale of the property will be by way of a public auction to a third
party that is unrelated to Labat with a minimum reserve price of R16 750 000 in cash.
The property will be sold by Sames Properties, a wholly owned subsidiary of Labat. Any
capital gains tax arising on the Disposal will be settled by Sames Properties. Any transfer
duties will be payable by the purchaser of the SAMES Property.
Business of SAMES property
The SAMES Property has largely remained without tenants since the outsourcing of the
manufacturing of the group’s electronic chip manufacturing business. The SAMES property is
located at Portion 1 of Erf 113,33 Eland Street, Koedoespoort, in Pretoria and measures 16
657 square metres of which 3 297 square metres is occupied by SAMES (Pty) Ltd at a gross
rental of R27,29 per square metre, and third parties occupying 2 181 square metres at a
gross rental of R28.79 per square meter excluding VAT. This results in a weighted average
rental per square metre of the entire gross lettable area of R27,89.
The Board of Directors has recently been considering the sale of the SAMES Property and/or
seeking to tenant the property. These efforts have currently not been successful and a
decision has been taken to make an offer for the property of R17 million through Zatoblox or
failing which to try to sell the property by way of an auction in order to achieve the best price
possible for the property with the least number of complications.
The Company previously received an offer for R15 million for the SAMES Property on 5
August 2013, which offer was not accepted. Subsequently, the Company received an offer of
R18 million for the property which offer had a large number of conditions precedent and the
Company has elected not to accept the offer.
A valuation report has been obtained from an external independent property valuer which
valued at the property at R16 750 000 (Sixteen Million Seven Hundred and Fifty Thousand
Rand).
Background information on the purchaser
An unconditional cash offer of R17 000 000 has been received from Zatoblox for the purchase
of the SAMES Property. Zatoblox is a related party to Labat as it is owned by two directors of
Labat, namely BG Van Rooyen and DJ O’Neill. The disposal will be subject to the approval of
uninterested Labat shareholders in general meeting
Failing the successful disposal of the SAMES Property to Zatoblox, shareholders will be
asked to approve the disposal of the property by way of public auction. In this instance the
details of any purchaser will not be known.
The Company intends appointing Consolidated Auction Group to undertake the public auction
of the SAMES Property at a reserve price of R16 750 000, net of auctioneers commission at a
rate of 10%.
The effective date of the transaction
The effective date of the SAMES Property Disposal is not known as at the Last Practicable
Date but will be with effect from the date of the transfer of the SAMES Property.
Purchase consideration
The purchase consideration the Purchase Consideration”) payable by the Purchaser to the
Seller in terms of the Sale Agreement is an amount equal to R17 000 000 (Seventeen Million
Rand) inclusive of VAT at a rate of 0%.
Signed copies of lease agreements generating a total monthly rental of not less than
R166,051.80 (being the current rental income) plus cost recoveries as per lease agreements
will be submitted to Zatoblox within the first month after transfer of the property to Zatoblox,
failing which (after three months) the purchase price will be reduced in accordance with the
formula provided in the signed offer.
Conditions precedent
The SAMES property disposal is conditional on the approval of the Labat shareholders in
General Meeting and the approval of funding by Business Partners Limited for the acquisition
by Zatoblox.
Warranties and indemnities
Whilst the property will effectively be sold “voetstoets” normal warranties for a sale of property
will be made. In the event that the SAMES Property is sold by way of public auction, Labat
will not make any warranties in favour of any purchaser of the SAMES Property.
Application of the sale proceeds
The sale proceeds will be applied towards the repayment of debt, funding working capital
requirements, and the furthering of local activities or investments to the extent that cash is
available.
Pro forma financial effects of the transaction
The pro forma financial effects of the proposed disposal of property will be announced in due
course once the pro forma financial effects have been finalised.
Classification of the transaction
The SAMES Property disposal is a Category 1 transaction in terms of the Listings
Requirements and a fundamental transaction in terms of section 112 of the Act. Accordingly,
Labat shareholders are required to consider and approve the SAMES Property disposal and
pass the necessary special resolution prior to implementation.
Labat shareholders will be provided with information on the SAMES Property disposal in
terms of section 115 of the Act, the Takeover Regulations and the Listings Requirements, so
as to enable them to make an informed decision whether or not to vote in favour of the special
resolutions required to implement the SAMES Property disposal.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that further to the cautionary announcement and detailed
cautionary announcements dated 17 May 2013, 21 June 2013, 02 August 2013 and 13
September 2013 respectively, the company is no longer in negotiations for the acquisition of a
number of licences issued by the Government of Namibia to Palatina as the company failed to
reach an agreement with the parties. The company however is still exploring various
acquisitions in the energy sector and other sectors that would increase shareholder value.
The company therefore hereby withdraws the cautionary announcement relating to the
negotiations with Palatina, However the company will still try and pursue an alternative
transaction with Palatina.
NEW CAUTIONARY ANNOUNCEMENT
Pursuant to the abovementioned proposed rights offer and proposed disposal of the SAMES
Property, shareholders are advised to exercise caution when dealing in the company’s
securities until pro forma financial effects are announced.
Johannesburg
9 October 2013
Sponsor
Arcay Moela Sponsors Proprietary Limited
Date: 10/10/2013 07:05:00 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,
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