Category 2 Acquisition Announcement
(Incorporated in the Republic of South Africa)
(Registration Number: 1967/006783/06)
Share Code: COM
(“Comair” or “the Company”)
CATEGORY 2 ACQUISITION ANNOUNCEMENT
Shareholders are advised that on 30 May 2019, the Company, entered into an agreement
(“Agreement”) with Sundrops Investments Proprietary Limited, Smashing Star
Investments Proprietary Limited and Marcel Liebenberg (“Sellers”), in terms of which the
Company will purchase the shares and claims of Star Air Maintenance Proprietary Limited
(“SAM”) and Star Air Cargo Proprietary Limited (“SAC”) (collectively, the “Assets”) from
the Sellers for a purchase consideration of R75 million plus the Profit Share Payments,
as set out more fully in paragraph 4 below (“Purchase Consideration”) (“Acquisition”).
2. DESCRIPTION OF THE ASSETS
SAC has a Part 121 Domestic and International Aircraft Operating Certificate. It
specializes in the wet, dry or damp leasing on short to medium term leases to airlines in
SAM provides aircraft maintenance requirements for its own fleet as well as for third party
3. RATIONALE FOR THE ACQUISITION
Comair has acquired the Assets to extend its diversification strategy into the leasing of
aircraft, while also providing Comair with the expertise and systems to establish a base
for heavy maintenance checks on its fleet of 737-800 aircraft.
4. PURCHASE CONSIDERATION
The Purchase Consideration is R75 million plus profit share payments, the sum of which
are capped at R250 million. The R75 million shall be paid as follows:
- R30 million within five business days of the fulfilment of all Conditions Precedent
- R22.5 million on the first anniversary of the Completion Date; and
- R22.5 million on the second anniversary of the Completion Date, subject to the
aggregate net profit after tax (“NPAT”) of SAM and SAC, as determined by their
auditors, being positive for the twelve months preceding 30 June 2021 as stated in
their annual financial statements, failing which none of the R22.5 million is payable.
The Company shall also pay the Sellers an amount equal to 83% of the NPAT as stated in the
annual financial statements of SAC and SAM for the financial years commencing on 1 July
2019 (“Accounting Date”), calculated in aggregate for SAC and SAM within three months of
each anniversary of the Accounting Date up to and including the third anniversary of the
Accounting Date, unless the Company exercises the option set out below.
Within 30 days following each anniversary of the Accounting Date, the Company shall have
the right to elect to pay a once-off settlement price being the aggregate amount of R150 million
less all amounts of the Purchase Consideration that the Company has already paid to the
Sellers prior to the date on which the Company elects to pay this settlement price.
5. CONDITIONS PRECEDENT
The Acquisition is subject to the fulfilment of the following outstanding conditions
precedent (“Conditions Precedent”):
5.1 by no later than 30 June 2019 the Company providing the Sellers with a copy of a
board resolution unconditionally approving the terms of the Agreement;
5.2 by no later than 30 June 2019 the Sellers providing the Company with a copy of board
resolutions unconditionally approving the terms of the Agreement;
5.3 by no later than 30 June 2019, each of SAM and SAC delivering to the Company
copies of special resolutions from their respective shareholders in terms of section
112(2) read with section 115(2)(a) of the Companies Act, 71 of 2008, as amended
(“the Act”), approving the disposals by the Sellers as contemplated in the Agreement;
5.4 by no later than 30 September 2019 or such later date as required, the unconditional
approval of the Acquisition by the Competition Authorities, or if such approval is
granted on a conditional basis, each of the Sellers and the Company upon which
conditions are imposed having approved such conditions in writing;
5.5 by no later than 31 July 2019, any other applicable approvals required in terms of the
Act by the Takeover Regulation Panel.
The Conditions Precedent must be fulfilled, or waived to the extent possible by not later
than the dates set out above. Should the conditions precedent set out in clauses 5.4 and
5.5 above not be fulfilled by their required dates either the Sellers or the Company may
extend the date of fulfilment by up to 180 days, which date may be extended by the parties
6. EFFECTIVE DATE OF THE ACQUISITION
Delivery and payment on the portion of the Purchase Consideration in respect of the
Assets will take place on the Completion Date.
The effective date of the Acquisition is 1 July 2019, or any other date agreed to by the
7. FINANCIAL INFORMATION
The value of the net assets comprising the Assets as at 28 February 2018, being the date
of the last audited annual financial statements, was R52.6 million.
The audited profits after tax attributable to the Assets for the period ended 28 February
2018, was R23.0 million, based on the audited annual financial statements of SAM and
SAC for the year ending 28 February 2018, which were prepared in terms of IFRS.
8. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains representations and warranties by the Sellers in favour of the
Company which are standard for a transaction of this nature.
9. CLASSIFICATION OF THE ACQUISITION
The Acquisition constitutes a category 2 transaction in terms of the JSE Limited Listings
The Company confirms, for purposes of paragraph 9.16 of the JSE Limited Listings
Requirements, that nothing in the constitutional documents of SAM or SAC will, in any
way, frustrate or relieve the Company from compliance with the JSE Limited Listings
31 May 2019
IMPORTANT NOTICE TO FOREIGN SHAREHOLDERS AND PROSPECTIVE INVESTORS
FOREIGN SHAREHOLDERS AND PROSPECTIVE INVESTORS IN COMAIR LIMITED (“COMAIR”) SHOULD
NOTE THAT, IN ORDER TO ENABLE COMAIR (AS A LICENSED AIR SERVICES OPERATOR IN SOUTH
AFRICA) TO REMAIN COMPLIANT WITH THE FOREIGN OWNERNSHIP RESTRICTION CONTAINED IN
SECTIONS 16 (4) ( c ) AND 19(a) OF THE AIR SERVICES LICENSING ACT, NO. 115 OF 1990, THE VOTING
RIGHTS OF SHAREHOLDERS MAY BE DECREASAED PROPORTIONATELY SUCH THAT THE VOTING
RIGHTS OF FOREIGN SHAREHOLDERS DO NOT, IN AGGREGATE, EXCEED 24.99%. FOREIGN
SHAREHOLDERS AND PROSPECTIVE INVESTORS ARE REFERRED TO COMAIR’S MEMORANDUM OF
INCORPORATION AND WEBSITE (www.comair.co.za) FOR FURTHER DETAIL. IF FOREIGN
SHAREHOLDERS OR PROSPECTIVE INVESTORS ARE IN ANY DOUNT AS TO WHAT ACTION TO TAKE
THEY SHOULD SEE ADVICE FROM THEIR BROKER, ATTORNEY OR OTHER PROFESSIONAL ADVISER.
Date: 31/05/2019 02:00:00 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.
Email this JSE Sens Item to a Friend.