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LETSHEGO HOLDINGS LIMITED - Announcement regarding the Related Party Transaction

Release Date: 06/11/2015 09:00
Code(s): LHL13 LHL01 LHL02 LHL03     PDF:  
Wrap Text
Announcement regarding the Related Party Transaction

     Letshego Holdings Limited
     Incorporated in the Republic of Botswana
     Registration number 98/442
     Instrument   code: LHL01    ISIN: ZAG000101908
     Instrument   code: LHL02    ISIN: ZAG000101916
     Instrument   code: LHL03    ISIN: ZAG000101924
     Instrument   code: LHL13    ISIN: ZAG000129719
     (“Letshego   Holdings” or   “the Company”)

     This announcement is being released on the Johannesburg Stock
     Exchange for information purposes only in respect of Letshego
     Holdings Limited’s Note Programme

     ANNOUNCEMENT REGARDING THE RELATED PARTY TRANSACTION

     This announcement is published in accordance with BSE Listing
     Requirements and contains salient features of the proposed
     related party transaction to be implemented subsequent to the
     Shareholders of Letshego approving same. Details of this will be
     set out in the Notice of the Extraordinary General Meeting as
     set out in paragraph 8 below.

1.   INTRODUCTION
     The Directors of Letshego are pleased to announce an intention
     by the Company to seek Shareholders’ approval to purchase the
     remaining 13% shares in Letshego Tanzania from the minority
     shareholders (‘the Sellers’) following the Sellers informing
     Letshego of their intension to sell their shares. Letshego
     already owns 87% of the shares in Letshego Tanzania and intends
     to exercise its pre-emption rights by acquiring the remaining
     13% shares from the Sellers, two of whom are former directors of
     Letshego Tanzania and the third being an independent third
     party.

     The Listing Requirements require that Letshego obtains prior
     approval from the Shareholders regarding this transaction as it
     constitutes a Related Party transaction in terms of the BSE
     Listing Requirements.

2.   DETAILS OF THE RELATED PARTY TRANSACTION
     The Board of Letshego has agreed to acquire the Sellers 13%
     shares in Letshego Tanzania. Letshego intends to exercise its
     pre-emption rights by acquiring the shares as it already owns
     87% of the shares in Letshego Tanzania. The Sellers and Related
     Parties are the minority shareholders of Letshego Tanzania.
     These are:-

     -   Dr Hassy Kitine who holds 6% in Letshego Tanzania and was up
         to 29 August 2015 a non-executive director and chairman of
         Letshego Tanzania. He was previously a non-executive director
         of Letshego during 2007-2009;
     -   Joseph Rugumyamheko was a non-executive director of Letshego
         Tanzania from 2009 to 2014 and holds 2% shares; and
     -   Ambassador Paul Rapia who owns 5% and never served on the
         board of Letshego Tanzania or Letshego.


3.   CONSIDERATION
     The Board of Letshego has agreed to acquire the Sellersshares
     for a consideration of Tanzania Shillings 10.4 billion
     (approximately BWP 50 million) in aggregate for their combined
     13% shares in Letshego Tanzania which has been agreed by the
     Sellers. The Consideration was based on the net asset value of
     Letshego Tanzania as at 31st December 2014 per the audited
     financial statements plus the budgeted profit after tax for the
     year ended 31st December 2015.

     Based on a closing date of 30 November 2015, and the estimated
     financial performance of Letshego Tanzania for the period to 30
     November 2015, this would represent a premium of 8% over the net
     asset value of Letshego Tanzania.

4.   NET ASSET VALUE
     The related party transaction will not adversely affect the cash
     flow of Letshego.

     The impact of this Related Party transaction on the net assets
     of the Company will not be material and is estimated to be BWP50
     million. There is no impact on earnings per share. The audited
     net asset value at 30th June 2015 was BWP4.1 billion.

5.   NET PROFIT AFTER TAX

     This Related Party transaction will have no impact on profit
     after tax or earnings per share as calculated before the impact
     of non-controlling interests. The audited earnings per share for
     the half year ended 30th June 2015 were18.5 thebe per share.
6.   BENEFITS

     The opportunity presented to buy 194,278 shares representing 13%
     of the issued share capital in Letshego Tanzania is attractive
     because it will allow Letshego to become the 100% owner of
     Letshego Tanzania and benefit fully from the future prospects of
     this business which has been trading successfully since 2006.
     Over time, it will facilitate the integration and cooperation
     between Letshego’s two businesses in Tanzania.

7.   RATIONALE
     The Directors of Letshego are of the view that the Related Party
     transaction will be in the best interest of the Company and its
     Shareholders for the reasons set out in the circular to be
     dispatched on or about 06th November 2015.

8.   NOTICE TO THE EGM
     The Notice of the Extraordinary General Meeting shall be
     despatched to Shareholders on or about the 06th November 2015
     which will set out further information on the proposed Related
     Party Transaction. A Circular to shareholders setting out the
     full details of the transaction will be dispatched to
     Shareholders on or about the 6th of November 2015 and convening
     an extraordinary general meeting of the Shareholders to be held
     on or about the 27th of November 2015 for purposes of approving
     the transaction.

9.   IMPORTANT DATES
     Announcement                        06 November 2015

     Notice of the EGM dispatched to     06 November 2015
     Shareholders



     J A Burbidge                        A C M Low
     Group Chairman                      Group Managing Director


     GABORONE, Friday, 6 November 2015

     Debt sponsor in South Africa
     The Standard Bank of South Africa Limited, acting through its
     Corporate and Investment Banking division

     Sponsoring broker in Botswana
     Stockbrokers Botswana Limited

     Legal Advisor
     Armstrongs

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