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Disposal by Nashua Mobile (Pty) Ltd of its Cell C subscriber base and withdrawal of cautionary announcement
REUNERT LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1913/004355/06
ISIN: ZAE000057428
Share code: RLO
("Reunert" or "the Company")
DISPOSAL BY NASHUA MOBILE (PTY) LTD OF ITS CELL C SUBSCRIBER BASE AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. THE TRANSACTION
1.1. Further to the cautionary announcement released on the Stock Exchange News Service of
the JSE Limited (“JSE”) on 14 April 2014 ("the Announcement"), Reunert shareholders are
hereby advised that Nashua Mobile Proprietary Limited (“Nashua Mobile”), a wholly-owned
subsidiary of Reunert, has entered into a sale agreement ("Sale Agreement") with Altech
Autopage Cellular Proprietary Limited ("Autopage") on 26 May 2014 in terms of which, inter
alia, Nashua Mobile will dispose of its Cell C subscriber base to Autopage ("the Autopage
Transaction" or "the Disposal"), on the terms and conditions set out below.
1.2. Autopage’s business is that of a mobile cellular service provider for South African mobile
network operators, including Mobile Telephone Networks Proprietary Limited ("MTN"),
Vodacom Proprietary Limited ("Vodacom") and Cell C Proprietary Limited ("Cell C").
1.3. Autopage is a subsidiary of Allied Electronics Corporation Limited, a public company listed on
the JSE.
2. BUSINESS OF NASHUA MOBILE
2.1. As indicated in the Announcement, Nashua Mobile’s business is that of a mobile cellular
service provider for South African mobile network operators, including Cell C.
2.2. Nashua Mobile currently has a service provider agreement with Cell C in relation to its Cell C
subscriber base.
3. RATIONALE FOR THE TRANSACTION
3.1. Reunert shareholders are referred to the Announcement wherein Reunert disclosed that
Nashua Mobile had entered into sale agreements with each of MTN ("MTN Transaction")
and Vodacom ("Vodacom Transaction") for the disposal of its MTN and Vodacom subscriber
bases.
3.2. The rationale for the Autopage Transaction is the same as for the MTN Transaction and the
Vodacom Transaction set out in the Announcement.
4. THE EFFECTIVE DATE OF THE TRANSACTION
4.1. In terms of the Sale Agreement, Nashua Mobile’s Cell C subscriber base will transfer to
Autopage on the third day after the second bill run after the date of fulfilment or waiver, as
the case may be, of the last of the conditions precedent to the Autopage Transaction (“Take-
On Date”).
5. DISPOSAL CONSIDERATION
5.1. The consideration to be received by Nashua Mobile from Autopage for the Disposal is
approximately R91,5 million plus VAT (the "Autopage Disposal Consideration").
5.2. The Autopage Disposal Consideration is subject to a formula-based adjustment. An
adjustment will be made in the event that the revenue associated with Nashua Mobile’s Cell
C subscriber base, upon the expiry of a six calendar month period after the Take-On Date, is
materially different from the revenue attributed to it by Autopage in its valuation of this
base. The Autopage Disposal Consideration will not, however, exceed R95,75 million plus
VAT.
5.3. The Autopage Disposal Consideration will be payable by Autopage to Nashua Mobile as
follows:
(1) 50% of the Autopage Disposal Consideration will be payable on the Take-On Date;
and
(2) the balance of the Autopage Disposal Consideration will be payable within 5
business days after the expiry of a six calendar month period after the Take-On Date.
6. CONDITIONS PRECEDENT
The Autopage Transaction is subject to the fulfilment or waiver of the following conditions
precedent:
6.1. the unconditional approval of the Competition Authorities having been granted in terms of
the Competition Act, 1998 or, if such approval is subject to any conditions, on conditions
acceptable to Nashua Mobile, insofar as the conditions may affect Nashua Mobile, and
acceptable to Autopage, insofar as the conditions may affect Autopage;
6.2. the MTN Transaction becoming unconditional in accordance with its terms; and
6.3. the Vodacom Transaction becoming unconditional in accordance with its terms.
7. APPLICATION OF THE DISPOSAL PROCEEDS
Similar to the MTN Transaction and the Vodacom Transaction, the Autopage Disposal
Consideration will be applied as follows:
7.1. to settle liabilities of Nashua Mobile;
7.2. thereafter, to support the growth strategy of Reunert; and
7.3. thereafter, for the payment of dividends and/or the repurchase of Reunert shares.
8. PRO FORMA FINANCIAL EFFECTS OF THE AUTOPAGE TRANSACTION ON REUNERT
The pro forma financial effects of the Autopage Transaction are be less than 3% (and
therefore not significant) and are therefore not required to be disclosed in terms of the JSE
Listings Requirements. In light of paragraph 9 below, Reunert shareholders are referred to
Reunert’s pro forma financial results as disclosed in the Announcement (as corrected by the
subsequent announcement released by Reunert on 15 April 2014).
9. CATEGORISATION OF THE DISPOSAL AND SHAREHOLDER APPROVAL
9.1. Sections 9.11 to 9.13 of the JSE Listing Requirements require aggregation of the disposal
considerations receivable in respect of the MTN Transaction, the Vodacom Transaction and
the Autopage Transaction ("the Combined Transaction") when determining the percentage
ratio for the purposes of categorising the Autopage Transaction.
9.2. On an aggregated basis, the Combined Transaction is classified as a Category 2 transaction in
terms of Section 9 of the JSE Listings Requirements and does not require shareholder
approval.
10. FURTHER ANNOUNCEMENT
Shareholders will be notified once the last of the conditions precedent to the Autopage
Transaction has been fulfilled or waived, as the case may be.
11. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the disclosure by Reunert of the Autopage Transaction in this announcement,
Reunert shareholders are no longer required to exercise caution when dealing in their
Reunert shares and accordingly, the cautionary announcement dated 14 April 2014 is hereby
withdrawn.
By order of the board of the Company
Woodmead, Sandton
26 May 2014
Legal Advisor
Norton Rose Fulbright South Africa
Merchant Bank and Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 26/05/2014 04:00:00 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
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