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Further announcement regarding the disposal and renewal of cautionary announcement
AMALGAMATED ELECTRONIC CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/010036/06)
Share code: AER ISIN: ZAE 000070587
(“Amecor”) or (“the Company”)
FURTHER ANNOUNCEMENT REGARDING THE DISPOSAL OF AMECOR’S 79%
INTEREST IN SECEQUIP PROPRIETARY LIMITED (“SECEQUIP”) AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
1. Introduction
Amecor shareholders (“Shareholders”) are referred to the announcement published by the
Company on 30 June 2014 (“the Announcement”) wherein Shareholders were advised that
Amecor had entered into an agreement (“Agreement”) with Secequip Supplies Proprietary
Limited (“Secequip Supplies” or “the Purchaser”). Secequip Supplies is wholly owned by
the existing managing director of Secequip, John Clifford Rogers (“Rogers”). In terms of the
Agreement, Amecor will dispose of its 79% interest in Secequip to the Purchaser with effect
from 1 April 2014 (“Effective Date”) for R2.0 million (“Consideration”), subject to the
various conditions precedent (“the Disposal”) set out in the Announcement. The
Consideration shall be discharged by the Purchaser in cash on the first business day after
the fulfilment or waiver of the conditions precedent. All conditions precedent to the Disposal
have been fulfilled save for Shareholder approval, the requirement for which is detailed in
paragraph 2 below.
2. Revised categorisation of the Disposal
The Disposal was initially categorised as small related party transaction in terms of the JSE
Limited Listings Requirements (“LRs”) as the Company is transacting with Secequip
Supplies, a material shareholder of a subsidiary (the Purchaser holds a 21% interest in
Secequip), and which is wholly owned by Rogers, a director of Secequip. A loan of
R48 624 000 which is owed by Secequip to Amecor (“Loan”) as at the Effective Date will be
retained by Amecor following the Disposal and no portion of the Loan will be disposed of as
part of the Disposal. The Issuer Regulation Division of the JSE (“IRD”) subsequently ruled
that, notwithstanding that the Loan will be retained by Amecor and that no portion of the
Loan will be disposed of, a portion of the Loan should be included in the categorisation
calculation which rendered the categorisation calculation in excess of 5%. The Disposal is
therefore regarded as a “related party transaction” by the IRD in terms of the LRs and
requires Shareholder approval.
In compliance with the LRs, a circular setting out further details of the Disposal and
incorporating a notice convening a general meeting (“Circular”) at which Shareholder
approval for the Disposal will be sought, will be dispatched in due course. In accordance with
the LRs, the Circular will incorporate an opinion from independent expert BDO Corporate
Finance Proprietary Limited as to whether the terms and conditions of the Disposal are fair
to Shareholders.
3. Financial effects of the Disposal
Shareholders were advised in the Announcement that the pro forma financial effects of the
Disposal (“Financial Effects”) on Amecor?s basic earnings per share (“EPS”), headline
earnings per share (“HEPS”), fully diluted EPS, fully diluted HEPS, net asset value per share
(“NAVPS”) and net tangible asset value per share (“NTAVPS”) were not material (in terms of
the LRs this is regarded as being less than 3%) and were not disclosed. In preparing the
Circular, it has been established that Financial Effects on HEPS, NAVPS and NTAVPS are
material and details thereof are therefore set out below.
The Financial Effects have been prepared in terms of the LRs and the Guide on Pro Forma
Financial Information issued by the South African Institute of Chartered Accountants.
The Financial Effects have been prepared to illustrate, on a conceptual basis, the impact of
the Disposal on Amecor?s published reviewed results for the year ended 31 March 2014 as
published on 30 June 2014 (“Year End Results”), had the Disposal occurred on 1 April 2013
for consolidated statement of comprehensive income purposes, and on 31 March 2014, for
consolidated statement of financial position purposes. The Financial Effects have been
prepared using accounting policies that comply with International Financial Reporting
Standards and are consistent with those applied in the Year End Results.
The Financial Effects are the responsibility of Amecor?s directors and have been prepared
for illustrative purposes only and, due to their nature, do not fairly present the financial
position, results of operation or cash flows of Amecor after the Disposal.
1 2
Before the Disposal After the Change %
Disposal
HEPS (cents) 27.9 25.0 (10.39)
Diluted HEPS (cents) 27.9 25.0 (10.39)
NAVPS (cents) 261.0 247.91 (5.01)
NTAVPS (cents) 155.76 142.69 (8.39)
Number of ordinary shares in issue at 74 306 74 306 -
31 March 2014 net of 3.7 million
treasury shares ('000)
Weighted average number of shares in 74 306 74 306 -
issue for the period ended 31 March
2014 net of 3.7 million treasury shares
('000)
Fully diluted number of shares in issue 74 306 74 306 -
for the period ended 31 March 2014 net
of 3.7 million treasury shares ('000)
Notes:
1. The “Before the Disposal” column information has been extracted, without
adjustment, from the Year End Results.
2. The “After the Disposal” column information is based on the “Before the Disposal”
column and after the following:
2.1. Prepared on the assumption that the Disposal took place on 1 April 2013 for
purposes of the pro forma statement of comprehensive income and on
31 March 2014 for purposes of the pro forma statement of financial position.
2.2. To take into account the costs of the Disposal of approximately R824 000.
2.3. To take into account the notional interest on other financial assets recognised
at fair value on initial recognition in terms of IAS 39 using a market related
investment rate of 5.1% as well as interest earned on the cash received as
part of the purchase consideration at an interest rate of 5.1%.
2.4. To take into account the tax effects of the Disposal.
2.5. To take into account the profit on Disposal of R2.851 million relating to the
difference between the fair value of the Consideration and the Loan and the
carrying amount of Amecor?s interest in Secequip.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the Announcement in which they were advised that Amecor
had entered into advanced discussions with parties, which if successful would result in
Amecor acquiring 100% of Maxidor SA Proprietary Limited (“Maxidor”). Amecor remains in
discussions with the parties and accordingly, Shareholders are advised to continue
exercising caution when dealing in the Company?s securities until a further announcement
regarding the acquisition of Maxidor is published.
Johannesburg
15 August 2014
Corporate Advisor
Integrated Capital Management Proprietary Limited
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Joint Legal Advisors
Read Hope Phillips Attorneys and Ararat Corporate Advisory Services
Reporting Accountants and Auditors
Mazars Inc.
Independent Expert
BDO Corporate Finance Proprietary Limited
Date: 15/08/2014 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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