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Posting of circular notice of general meeting in respect of related party transaction and change of name
AUSTRO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
JSE share code: ASO ISIN: ZAE000090882
(“Austro” or “the company”)
POSTING OF CIRCULAR AND NOTICE OF GENERAL MEETING IN RESPECT OF A RELATED PARTY TRANSACTION AND
CHANGE OF NAME OF THE COMPANY
1. POSTING OF CIRCULAR
Shareholders are referred to the announcement released on SENS on 13 August 2014 wherein shareholders
were advised that Austro had entered into an agreement with Ricophase Proprietary Limited (“Ricophase”),
Tapson Sadiki, Tebogo Desiree Kukama, Aobakwe Reginald Koketso Kukama (collectively the “Friedshelf
shareholders”), the Horatio Share Trust (the “Hinckley Trust”) and Grant Hinckley pursuant to which,
subject to the fulfilment of the conditions precedent, Austro will acquire, with effect from 1 March 2014, an
effective 100% of the equity in Centlube Holdings Proprietary Limited (“the Centlube acquisition”). The
purchase consideration payable by Austro for the Centlube acquisition is R64 million, provided that if the
Centlube group is appointed as the licensee and/or distributor for a certain global oil major and significant
player in the lubricants industry on or before 31 December 2015, the purchase consideration will be increased
by R16 million (the “additional payment”) to R80 million.
The Centlube acquisition is a Category 2 transaction in terms of the JSE Listings Requirements. The Centlube
acquisition is also an acquisition from a related party as Ricophase is a shareholder of Friedshelf 1320
Proprietary Limited (and one of the vendors in terms of the Centlube acquisition) and Ricophase is also a
material shareholder of Austro. Accordingly, the implementation of the Centlube acquisition is conditional on
securing shareholder approval of an independent majority of Austro shareholders.
In addition, the board proposes changing the name of the company from “Austro Group Limited” to “enX
Group Limited”.
Shareholders are advised that a circular, incorporating a notice of general meeting, was posted to shareholders
on 30 October 2014. A general meeting of Austro shareholders will be held at 10:00 on Monday, 1 December
2014 at the offices of Austro (30 – 38 Jacoba Street, Alberton North) to consider and, if deemed fit, pass with or
without modification, the resolutions contained in the notice of general meeting attached to the circular. A copy
of the circular is also available on the company’s website (www.austrogrouplimited.com). Due to the ongoing
postal strike, delays are expected in receiving the circular and accordingly, shareholders are encouraged to view
the circular on the company’s website or request a copy directly from the company by contacting Joleen Bowes
on 010 216 2600 to arrange for the collection of a copy of the circular at the company’s offices.
2. FINANCIAL INFORMATION
The pro forma financial effects of the Centlube acquisition on Austro’s net asset value per share, tangible net
asset value per share, earnings per share, diluted earnings per share, headline earnings per share and diluted
headline earnings per share for the 6 months ended 28 February 2014 are set out below. The pro forma financial
effects are the responsibility of the directors of Austro and have been prepared for illustrative purposes only, to
provide information on how the Centlube acquisition may have impacted on the historical financial results of
Austro for the 6 months ended 28 February 2014. Due to its nature, the pro forma financial effects may not give
a fair reflection of Austro’s financial position, changes in equity, results of operations and cash flows
subsequent to the Centlube acquisition.
The pro forma financial effects in respect of the Centlube acquisition that was published in the announcement
released on SENS on 13 August 2014 has been updated as per the table below. Grant Thornton (JHB) Inc, the
reporting accountants of Austro, have issued an assurance report in respect of the pro forma financial
information set out in the circular and below. A copy of their assurance report is included in the circular.
The table below reflects the pro forma financial effects of the Centlube acquisition on Austro shareholders:
Before the After the
transaction transaction
(cents) (cents) % change
Net asset value per share 95.34 98.80 3.63
Tangible net asset value per share 71.17 63.61 (10.62)
Earnings per share 3.03 0.68 (77.48)
Diluted earnings per share 3.03 0.68 (77.48)
Headline earnings per share 3.02 3.00 (0.58)
Diluted headline earnings per share 3.02 3.00 (0.58)
Notes and assumptions:
1. The figures set out in the “Before the transaction” column for Austro have been extracted from the unaudited interim results of Austro for the
6 months ended 28 February 2014.
2. The Centlube financial information applied in the pro forma financial information has been extracted from the audited monthly management
accounts of the Centlube group for the 6 months ended 28 February 2014.
3. The figures set out in the “After the transaction” column above reflect the pro forma effects on the interim results of Austro resulting from the
Centlube acquisition of an effective 100% shareholding in Centlube Holdings.
4. The following adjustments have been applied and are reflected in the pro forma financial effects:
- The Centlube acquisition is assumed to have been implemented on 1 September 2013 for earnings per share, diluted earnings per share,
headline earnings per share and diluted headline earnings per share purposes and on 28 February 2014 for net asset value per share and
tangible net asset value per share purposes.
- It is assumed that the Centlube group has been appointed as the licensee for a certain global oil major, R8 million of the additional payment is
discharged by the allotment and issue of Austro shares to the Friedshelf shareholders and R8 million of the additional payment is paid in cash
to the Hinckley Trust.
- The Centlube figures have been adjusted so as to exclude the after tax impact of interest accrued on shareholder loans in Centlube Holdings.
- The cash component of the purchase consideration is funded out of Austro’s available cash resources and credit facilities. Interest on cash
balances is foregone at an after tax rate of 3.1% and interest on facilities utilised is paid at an after tax rate of 6.7%.
- Transaction costs of R667 000 have been expensed. The expensing of the transaction costs will result in a tax saving of R186 760.
- A 5% discount to Austro’s closing price of R1.88 on 12 August 2014 has been used as the assumed price at which the shares in relation to the
additional payment are issued. This price results in a total of 26 355 145 new Austro shares being issued.
- The excess of the purchase consideration over Centlube Holdings’ tangible net asset value has been allocated to goodwill and intangible
assets in the ratio of 40% and 60% respectively.
- Intangible assets arising from the Centlube acquisition are amortised over a period of 5 years. A deferred tax liability is recognised to take
into account the difference in tax base arising as a result of the intangible assets recognised on acquisition.
- That portion of goodwill arising from the difference between the assumed Austro share price at issue date and the share price of R1.45 per
share as per the Centlube acquisition agreement is immediately impaired. The reason for this assumption is that the value placed on the
Centlube acquisition as a result of the application of IFRS does not reflect the value placed on Centlube Holdings by management and the
board at the date of concluding the transaction. The management of Austro and the board wish to reflect the fair market value of the business
on Austro’s statement of financial position.
5. All adjustments are directly attributable to the Centlube acquisition, and other than transaction costs, are expected to have a continuing effect on
Austro.
3. SALIENT DATES AND TIMES
The salient dates and times for the general meeting and change of name are set out below:
Record date in order to receive the circular Friday, 24 October 2014
Circular posted to Austro shareholders and announcement relating to the
issue of the circular and notice convening the general meeting released on
SENS on Thursday, 30 October 2014
Announcement relating to the issue of the circular and notice convening the
general meeting published in the press on Friday, 31 October 2014
Last day to trade in Austro shares in order to be recorded in the register on
the voting record date (see note 2 below) on Friday, 14 November 2014
Record date to vote at the general meeting (“voting record date”) being
17:00 on Friday, 21 November 2014
Last day for receipt of proxies for the Austro shareholders’ general meeting
by 10:00 (see note 3 below) on Thursday, 27 November 2014
Austro shareholders’ general meeting to be held at 10:00 on Monday, 1 December 2014
Results of general meeting released on SENS on Monday, 1 December 2014
Resolution in respect of the change of name submitted to CIPC on Tuesday, 2 December 2014
Resolution in respect of change of name expected to be registered by CIPC
by no later than Thursday, 8 January 2015
Expected publication of finalisation announcement on SENS Friday, 9 January 2015
Expected last day to trade in existing shares on the JSE prior to the change
of name Friday, 16 January 2015
Expected trading in the new name of enX Group Limited on the JSE under
the JSE Code “ENX” and ISIN ZAE000195723 commences on Monday, 19 January 2015
Expected record date in respect of the change of name Friday, 23 January 2015
Expected date of issue of new replacement share certificates, provided that
the old share certificates have been lodged by 12:00 on Friday, 23 January
2015, on or about (share certificates received after this time will be posted
within 5 business days of receipt) Monday, 26 January 2015
CSDP and broker accounts of dematerialised shareholders expected to be
updated on Monday, 26 January 2015
Notes:
1. All dates and times in this circular are local times in South Africa. The above dates and times are subject to change. Any changes will be released
on SENS and, if required, published in the press.
2. Austro shareholders should note that, as transactions in shares are settled in the electronic settlement system used by Strate, settlement of trades
takes place five business days after such trade. Therefore persons who acquire Austro shares after the voting last day to trade will not be eligible
to vote at the general meeting.
3. If a form of proxy is not received by the time and date shown above or not less than 48 hours before recommencement of any adjourned or
postponed meeting, it may be handed to the Chairman of the general meeting not later than ten minutes before the general meeting is due to
commence or recommence.
4. Share certificates in the name of Austro Group Limited may not be dematerialised or rematerialised after Friday, 16 January 2015.
30 October 2014
Corporate advisor, legal advisor and sponsor to Austro Reporting accountants
Java Capital Grant Thornton
Date: 30/10/2014 05:43:00 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.
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