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Release Date: 31/01/2014 13:24
Code(s): TTO     PDF:  
Wrap Text
Specific repurchase

Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX Share Code: TUC
JSE Share Code: TTO
ISIN Number: NA000A0RF067
(“Trustco” or “the Company”)


1.   Introduction

Shareholders are referred to the Trustco circular posted to shareholders on
15 December 2011, relating to an agreement with Renaissance Africa Master
Fund ("Rencap") dated 21 October 2011("the Rencap agreement"), in terms
whereof, inter alia, Trustco was granted a call option to acquire Rencap’s
entire shareholding in Trustco, being 74 331 920 Trustco shares at a strike
price of 110 cents per Trustco share upon written notice to Rencap (“Rencap

A circular to Trustco shareholders, containing full details of the Rencap
agreement, was posted on 15 December 2011 and at a special general meeting
of the Company, held on 19 January 2012, the Rencap agreement and the
potential Rencap repurchase envisaged in terms of the call option contained
therein, was approved by the requisite majority of Trustco shareholders.

2.   Exercise of the call option and amendment of strike price

In a letter dated 13 November 2013 Trustco gave Rencap notice that it would
exercise the call option, however Rencap and Trustco have agreed that the
strike price of 110 cents will be reduced to 91 cents, subject to the
approval of Trustco shareholders in general meeting as required in terms of
the Listings Requirements of the JSE Limited (“the Rencap amendment”). The
closing share price of Trustco shares on the JSE on 14 November 2013 was 96
cents per share.

The Rencap amendment represents an opportunity for the Company to acquire
its shares at a discount to market price, to increase its net asset value
and to create value for its existing shareholders and will result in a
substantial saving for the Company.

In terms of the Rencap repurchase 74 331 920 Trustco shares will be
repurchased and will be held as treasury shares by subsidiaries of the
Company to the extent allowed in terms of the Namibian Companies Act 2004,
Act 28 of 2004 (“the Act”). This will result in the Trustco group holding
not more than 10% of its shares in issue through subsidiary companies as
treasury shares, the maximum extent permissible in terms of the Act.
3.       Financial effects

 The pro forma financial effects of the Rencap amendment are set out below,
 are based on the unaudited, unreviewed, published results of Trustco for
 the six months ended 30 September 2013, are the responsibility of the
 directors, are presented in a manner consistent with the basis on which the
 historical financial information has been prepared and in terms of
 Trustco’s accounting policies and have been prepared for illustrative
 purposes only and, because of its nature, may not fairly present Trustco’s
 financial position, changes in equity, results of operations or cash flows.

                                                                                                  Pro forma
                                                                                Pro forma           financial
                                                              Published     adjustments -       information
                                                               financial   exercise of call   after exercise
                                                        information - 30      option @ 91     of call option         %
                                                        September 2013              cents        @ 91 cents     change
 EPS (cents)(ii, iii, iv, vi)                                      8.59              0.77               9.36    8.96%
 Diluted EPS (cents)(ii, iii, iv, vi)                              8.53              0.76               9.29    8.91%
 HEPS (cents)(ii, iii, iv, vi)                                     3.02              0.16               3.18    5.30%
 Diluted HEPS (cents)(ii, iii, iv, vi)                             3.00              0.16               3.16    5.33%
 NAV per share (cents)(v, vii)                                    138.13             12.50             150.63    9.05%
 TNAV per share (cents) (v, vii)                                   97.44              8.16             105.60    8.37%
 Ordinary shares in issue (‘000)                              772 142 090                   -     772 142 090    0.00%
 Ordinary shares in issue (‘000) (excl.
                                                              771 095 918       (74 331 920)      696 763 998     -9.64%
 treasury shares)(iv, v)
 Weighted average number of ordinary
 shares in issue (‘000) (excl. treasury                     757 559 000       (74 331 920)      683 227 080     -9.81%
 shares)(iv, v)
 Diluted weighted average number of
 ordinary shares in issue (‘000) (excl.                     762 481 000       (74 331 920)      688 149 080     -9.75%
 treasury shares)(iv, v)


  i.      The “Before” financial information has been extracted without
          adjustment from the unaudited, unreviewed, published results of
          Trustco for the six months ended 30 September 2013.
 ii.      Interest income foregone (calculated using an interest rate of 5%
          per annum) on the cash utilised to settle the Rencap call option
          purchase consideration of N$67 642 047.20, this adjustment will not
          have a continuing effect;
iii.      Reduction in taxation paid as a result of note ii above (calculated
          using a corporate tax rate of 34%), this adjustment will not have a
          continuing effect;
 iv.      Repurchase of 74 331 920 Trustco shares from Rencap, this adjustment
          will have a continuing effect;
  v.      Payment of N$67 642 047 in cash for the repurchase of 74 331 920
          Trustco shares at 91 cents each from Rencap;
 vi.      The Basic earnings, Diluted earnings, Headline earnings and Diluted
          headline earnings per share were calculated based on the assumption
          that the Rencap Repurchase took place on 1 April 2013; and
vii.      The NAV and NTAV per share were calculated as if the Rencap
          Repurchase took place on 30 September 2013.

The terms of the Rencap amendment are included in a circular which was
posted to shareholders today and will be submitted for shareholder approval
at a general meeting convened to be held at Trustco's registered office, 2
Keller Street, Windhoek, at 10am on 28 February 2014 in terms of such

By order of the Board.

DJ Steyn

Company Secretary

31 January 2013

JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

NSX Sponsor
IJG Securities (Pty) Limited

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