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YRK - York - Pro forma financial effects and withdrawal of cautionary
announcement
The York Timber Organisation Limited
(Registration number 1916/004890/06)
Share code: YRK
ISIN: ZAE000008108
("York" or "the Company")
PRO FORMA FINANCIAL EFFECTS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the terms announcement released on SENS on 2 April 2007
whereby York will acquire 100% of Global Forest Products (Proprietary)
Limited ("GFP") and South African Plywood (Proprietary) Limited
("Plywood") with effect from 30 June 2007 in one indivisible transaction
for R1,694,747,439 ("the purchase consideration"), subject to all the
required approvals being obtained ("the Acquisition"), the directors
advise of the pro forma financial effects of the Acquisition below.
2. CONDITIONS PRECEDENT
The Acquisition remains subject to conditions precedent as detailed in
the announcement dated 2 April 2007.
3. PRO FORMA FINANCIAL EFFECTS
Set out in the table below are the pro forma financial effects of the
Acquisition, which have been prepared for illustrative purposes only, to
provide information about how the Acquisition might have affected the
financial information of York as presented. The pro forma financial
effects are the responsibility of the directors. Due to their nature, the
pro forma financial effects may not give a fair reflection of the balance
sheet and results of operations of York after the Acquisition.
Before the After the Percentage
Acquisition Acquisition change (%)
(cents per (cents per
share) share)
Earnings 283.64(i) 296.13(ii) 4.40
Headline earnings 263.25(i) 440.10(ii) 67.18(v)
Net asset value 941.14(iii) 1,403.85(iv) 49.17
Tangible net asset 941.14(iii) 373.21(iv) (60.34)
value
Notes:
i) The earnings and headline earnings per ordinary share of York ("York
share"), as set out in the "Before" column of the table, are based
upon the audited financial results of York for the twelve months
ended 31 December 2006 and 11,040,597 weighted average number of
York shares in issue.
ii) The earnings and headline earnings per York share, as set out in the
"After" column of the table, are based upon the audited financial
results of York for the twelve months ended 31 December 2006
including the adjusted annualised reviewed results of GFP and
Plywood for the six months ended 31 December 2006, and 67,707,264
weighted average number of York shares in issue and the assumptions
that:
- the purchase consideration was settled on 1 January 2006 with
R844,747,000 loan capital, R 350 million raised in terms of a
rights offer, which is fully underwritten, at R15 per York
share and the issue of 23,333,333 York shares to the IDC and
10,000,000 York shares to a BEE SPV to be funded by the IDC at
an issue price of R15 per York share as consideration for the
IDC`s 30% in GFP and Plywood;the purchase acquisition includes
goodwill of R697,823;
- the loan capital was borrowed at an interest rate of prime plus
1%;
- the effective tax rate is 29%; and
- there were no additional costs incurred relating to the
acquisition.
iii) The net asset value and tangible net asset value per York share, as
set out in the "Before" column of the table, are based upon the
audited balance sheet of York as at 31 December 2006 and 11,040,597
weighted average number of York shares in issue.
iv) The net asset value and tangible net asset value per York share, as
set out in the "After" column of the table, are based upon the
audited balance sheet of York as at 31 December 2006 including the
reviewed balance sheet of GFP and Plywood as at 31 December 2006,
67,707,264 weighted average number of York shares in issue and the
assumptions that:
- the Acquisition was effective 31 December 2006;
- the purchase consideration was settled on 31 December 2006 with
R844,747,000 loan capital, R 350 million raised in terms of a
rights offer, which is fully underwritten, at R15 per York
share and the issue of 23,333,333 York shares to the IDC and
10,000,000 York shares to a BEE SPV to be funded by the IDC at
an issue price of R 15 per York share as consideration for the
IDC`s 30% in GFP and Plywood;
- the purchase acquisition includes goodwill of R697,823; and
there were no additional costs incurred relating to the
Acquisition.
v) The difference between earnings and headline earnings is mostly
attributable to the impairment of goodwill and property, plant and
equipment in the reviewed interim results of Plywood for the six
months ended 31 December 2006. A full reconciliation of the
difference will be provided in the circular to shareholders (refer
paragraph 4 below).
4. CIRCULAR TO SHAREHOLDERS
A circular to shareholders of York ("York shareholders") will be
issued and an announcement containing the salient dates and times
pertaining to the Acquisition will be released in due course.
Shareholders should note that, as the acquisition constitutes a
revised listing in terms of the Listing Requirements of the JSE
Limited ("JSE"), the continued listing of York is contingent upon
the JSE`s assessment of the suitability of such continued listing
subsequent to the implementation of the Acquisition.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
York shareholders are advised that caution is no longer required to
be exercised by York shareholders when dealing in their securities.
Pretoria
11 May 2007
Corporate Advisor and Sponsor
Metier
Transaction Arranger and Equity Underwriter
Blackstar
Equity Participant and BEE Funder
Industrial Development Corporation of South Africa Limited
Attorneys
Edward Nathan Sonnenbergs Inc.
Competition Law Advisors
Webber Wentzel Bowens
Debt Arrangers and Underwriters
Rand Merchant Bank (a division of FirstRand Limited)
Tax Advisors
Deloitte & Touche
Reporting accountants and auditors
KPMG
Date: 11/05/2007 17:06:01 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.