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Pro Forma Financial Effects relating to the Transaction and Withdrawal of Cautionary Announcement
EOH HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/014669/06)
Share code: EOH ISIN: ZAE000071072
(“EOH” or the “Company”)
PRO FORMA FINANCIAL EFFECTS RELATING TO THE TRANSACTION AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Unless otherwise defined, capitalised words and terms contained in this announcement shall bear the
meanings ascribed thereto in the announcements published on SENS on 12 March 2018 and 30 July 2018.
1. INTRODUCTION
Shareholders are referred to the announcements published on SENS on 12 March 2018,
26 April 2018, 11 June 2018, 15 June 2018, 24 July 2018, 30 July 2018 and 10 August 2018
relating to the proposed strategic partnership and BEE transaction to be concluded between EOH
and Lebashe (the “Transaction”).
2. PRO FORMA FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the Transaction and the Capitalisation
Share Issue on EOH’s basic earnings per share (“EPS”), headline EPS, diluted EPS, diluted
headline EPS, net asset value per share (“NAV”) and net tangible asset value per share (“TNAV”),
(the “Pro Forma Financial Effects”).
The Pro Forma Financial Effects have been prepared to illustrate the effect of the Transaction and
the Capitalisation Share Issue on the published, unaudited consolidated financial statements of
EOH for the six month period ended 31 January 2018, had the Transaction and Capitalisation
Share Issue been implemented on 1 August 2017 for EPS, headline EPS, diluted EPS and diluted
headline EPS purposes and on 31 January 2018 for NAV and TNAV purposes.
The Pro Forma Financial Effects are provided for illustrative purposes only and because of their
nature, may not fairly represent the financial performance and position of EOH after the
implementation of the Transaction and the Capitalisation Share Issue.
The Pro Forma Financial Effects illustrate the assumption that the Subscription Undertaking is
implemented in full on the Implementation Date, however the actual transaction in relation to the
Subscription Undertaking will only be recorded in the period in which Lebashe subscribes for the
various tranches of EOH Shares pursuant to the Subscription Undertaking, which may occur over
several future financial reporting periods.
The Pro Forma Financial Effects have been compiled using the accounting policies that comply
with International Financial Reporting Standards (“IFRS”) and that are consistent with those applied
in the published, audited consolidated annual financial statements of EOH for the year ended
31 July 2017.
The Pro Forma Financial Effects are the responsibility of the directors of EOH and have been
extracted from the complete pro forma financial information, on which Mazars (Gauteng) Inc. has
issued an independent reporting accountants’ reasonable assurance report (“RA Report”). The
complete pro forma financial information and the RA Report will be included in the Transaction
circular to be distributed to Shareholders in due course.
Before - for the
six month After the
period ended / After A Share Transaction
as at Issue and and
31 January Initial After the Capitalisation
2018 Subscription Transaction Share Issue
Actual Pro forma Pro forma Pro forma
Notes 1 2 3 4
Earnings per share - from continuing operations
Basic EPS (cents) 320 116 99 101
Diluted EPS (cents) 310 113 97 98
Headline EPS (cents) 314 110 94 96
Diluted headline EPS (cents) 304 107 92 94
Earnings per share - from total operations (including discontinued operations)
Basic EPS (cents) 47 (142) (122) (108)
Diluted EPS (cents) 45 (138) (119) (106)
Headline EPS (cents) 319 115 98 100
Diluted headline EPS (cents) 309 112 96 98
NAV (cents) 5 708 5 532 5 150 4 876
TNAV (cents) 1 869 1 898 2 043 1 935
Total number of EOH Shares 144 023 152 131 177 987 187 987
in issue (000’s)
Weighted average number of 143 765 151 873 177 729 187 729
EOH Shares in issue (000’s)
Diluted weighted average 148 349 156 457 182 313 192 313
number of EOH Shares in
issue (000’s)
Notes:
1. The “Before” financial information has been extracted without adjustment and / or derived from the
published, unaudited consolidated financial statements of EOH for the six month period ended
31 January 2018.
2. The “After A Share Issue and Initial Subscription” financial information has been derived from the
published, unaudited consolidated financial statements of EOH for the six month period ended
31 January 2018 and adjusted for:
a. The issue of 8.1 million Subscription EOH Shares to Lebashe at a subscription price of R30.83 per
EOH Share, being the 60 day VWAP on 20 July 2018 less 10%, for an aggregate cash subscription
price of R250 million, pursuant to the implementation of the Initial Subscription. This adjustment is
expected to have a continuing effect.
b. The issue of 40 million A Shares for a nominal aggregate subscription price of R1.00, pursuant to
the implementation of the A Share Issue, is anti-dilutive, for purposes of determining diluted EPS
and diluted headline EPS, based on the 30 day VWAP of R65.76 of an EOH Share on
31 January 2018 and a dividend of R2.15 per EOH Share for the six month period ended
31 January 2018. This adjustment is expected to have a continuing effect.
c. The recognition of a once-off BEE share-based payment charge of approximately R215 million in
terms of IFRS 2: Share-Based Payments in relation to the A Shares. The share-based payment
charge on the A Shares is determined using an option pricing model based on the 30 day VWAP
of R32.23 per EOH Share on 20 July 2018. In addition, the share-based payment charge includes
the present value of anticipated future dividends of the A Shares, utilising the assumptions in the
option pricing model. The share-based payment charge is recognised as an equity settled share-
based payment with no vesting period and the full expense of approximately R215 million is
recognised upon implementation of the Transaction.
d. The payment of costs amounting to approximately R55 million, relating to the implementation of
the Transaction and matters related thereto.
3. The “After the Transaction” financial information has been derived from the published, unaudited
consolidated financial statements of EOH for the six month period ended 31 January 2018 and adjusted
for those adjustments included in note 2 above and for the issue of 25.9 million EOH Shares to Lebashe
at a subscription price of R29.01 per EOH Share, being the 30 day VWAP on 20 July 2018 less 10%, for
an aggregate cash subscription price of R750 million, pursuant to the implementation of the Subscription
Undertaking. In the event that EOH obtains the right to early redeem all or a portion of the A Shares, this
right provides EOH with an asset. This adjustment is expected to have a continuing effect.
4. The “After the Transaction and Capitalisation Share Issue” financial information has been derived from
the published, unaudited consolidated financial statements of EOH for the six month period ended
31 January 2018 and adjusted for those adjustments included in notes 2 and 3 above and for:
a. The issue of 10 million EOH Shares (“Capitalisation Shares”), pursuant to the implementation of
the Capitalisation Share Issue. The issue of 10 million Capitalisation Shares is based on the
assumptions that Lebashe holds 40 million A Shares on the Maturity Date, no dividend is declared
and paid by EOH in respect of an EOH Share for the duration of the Transaction Term and a 30
day VWAP of R120.00 per EOH Share on the Maturity Date. This adjustment is expected to have
a continuing effect.
- Holding all assumptions the same, if the 30 day VWAP of an EOH Share on the Maturity Date
is R90.00, there will be nil Capitalisation Shares issued on the Maturity Date. The pro forma
financial effects of nil Capitalisation Shares issued on the basic EPS, headline EPS, diluted
EPS, diluted headline EPS from continuing and including discontinued operations per EOH
Share are negligible.
- Holding all assumptions the same, if the 30 day VWAP of an EOH Share on the Maturity Date
is R150.00, there will be 16 million Capitalisation Shares issued on the Maturity Date. The pro
forma financial effects of 16 million Capitalisation Shares issued on the basic EPS, headline
EPS, diluted EPS, diluted headline EPS from continuing and including discontinued
operations per EOH Share will decrease the loss per EOH Share.
b. The redemption of the 40 million A Shares held by Lebashe for a nominal aggregate consideration
of R1.00, assuming Lebashe holds 40 million A Shares on the Maturity Date. As stated above, the
issue of the 40 million A Shares on implementation of the Transaction is anti-dilutive and therefore
the redemption of such A Shares would therefore not require an adjustment to the number of EOH
Shares in issue or the weighted average or diluted weighted average number of EOH Shares in
issue.
5. The adjustments in respect of the Transaction costs (including the BEE share-based payment charge)
and the redemption of the A Shares are once-off adjustments.
3. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that as a result of the publication of the Pro Forma Financial Effects,
caution is no longer required to be exercised by Shareholders when dealing in the Company’s
securities.
Further details regarding the Transaction, the Transaction circular and the related salient dates and
times pertaining to the Transaction will be published on SENS in due course.
Johannesburg
16 August 2018
Corporate Advisor and Transaction Sponsor to EOH on the Transaction
One Capital
Attorneys to EOH on the Transaction
Cliffe Dekker Hofmeyr Inc.
Independent Auditors and Reporting Accountants to EOH on the Transaction
Mazars (Gauteng) Inc.
Date: 16/08/2018 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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