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AFRIMAT LIMITED - Pro Forma Financial Effects Of The Scheme and Withdrawal Of Cautionary Announcement

Release Date: 04/08/2020 15:30
Code(s): AFT UCP     PDF:  
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Pro Forma Financial Effects Of The Scheme and Withdrawal Of Cautionary Announcement

UNICORN CAPITAL PARTNERS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: UCP
ISIN: ZAE000244745
(“UCP” or “the Company”)

AFRIMAT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/022534/06) 
Share code: AFT
ISIN: ZAE000086302
("Afrimat")

PRO FORMA FINANCIAL EFFECTS OF THE SCHEME AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT

1.     INTRODUCTION

1.1.     UCP shareholders are referred to the joint SENS announcement dated 22 July 2020 (“Firm
         Intention Announcement”) by the Company and Afrimat, advising that UCP’s board of
         directors had received a firm intention from Afrimat to make an offer to acquire all the ordinary
         shares in UCP not already held by Afrimat (or by its subsidiaries) or by subsidiaries of UCP,
         by way of a scheme of arrangement (“the Scheme”) in terms of section 114 of the Companies
         Act, No. 71 of 2008 (“Firm Intention Offer”). Should the Scheme become operative, UCP
         shareholders will receive 1 Afrimat ordinary share for every 280 UCP ordinary shares
         disposed of, with no cash alternative.

1.2.     As the pro forma financial effects of the Scheme were not yet available at the time of the Firm
         Intention Announcement, they were not included in that announcement and the Company
         renewed its previous cautionary announcement, pending publication of the such pro forma
         financial effects. The pro forma effects of the Scheme on earnings and asset value per UCP
         ordinary share (“UCP Share”) are now set out below, in terms of Regulation 101(7)(b)(iv) of
         the Companies Regulations, 2011.

2.     PRO FORMA FINANCIAL EFFECTS OF THE SCHEME

2.1.     The summarised pro forma financial effects, showing the position following implementation of
         the Scheme, are presented below in a manner consistent with the basis on which the
         consolidated historical financial information of Afrimat has been prepared in terms of Afrimat’s
         accounting policies, which are similar to the accounting policies of UCP. The pro forma
         financial effects have been presented for illustrative purposes only and, because of their
         nature, may not fairly present Afrimat’s financial position, changes in equity, results of
         operations or cash flows post the implementation of the Scheme.

2.2.     The pro forma financial effects have been prepared in accordance with International Financial
         Reporting Standards, the Guide on Pro Forma Financial Information issued by the South
         African Institute of Chartered Accountants and the JSE Limited Listings Requirements.

2.3.     Due to the year end of UCP being 30 June each year and the year end of Afrimat being 28
         February each year, the summarised pro forma financial information of UCP after the Scheme
         has been prepared based on the condensed consolidated statement of profit or loss of UCP
         for the rolling 12-month period ended 31 December 2019 (“12-month Profit or Loss
         Statement”), and on the assumption that the Scheme took place with effect from 1 March
         2019 (being the commencement of Afrimat’s last reported financial year), for purposes of the
         pro forma consolidated statement of profit or loss for the rolling 12-month period, and on 29
         February 2020, for purposes of the pro forma consolidated statement of financial position.

2.4.     The 12-month Profit or Loss Statement will be disclosed in the Scheme circular to be
         distributed to UCP shareholders in due course, together with the pro forma financial effects of
         the Scheme on Afrimat ordinary shares.

                                                                               Pro forma after
                                                                   Before       implementation
                                                        implementation of      of the Scheme3     Change
                                                       the Scheme (cents)             (cents)        (%)
                                                            (1 UCP share)    (equivalent of 1
                                                                                    UCP share
            Net asset value per UCP Share1                             52                  4.6    (91.1%)
            Tangible net asset value per UCP
                                                                       33                  4.0    (87.8%)
            Share1
            Headline earnings per UCP share2
            Continuing operations                                   (5.61)                1.05     118.6%
            Discontinued operations                                 (2.33)              (0.07)      97.0%
            Earnings per UCP share2
            Continuing operations                                   (6.64)                1.04     115.6%
            Discontinued operations                                 (3.33)              (0.07)      97.9%

        Notes and Assumptions

        1)  Net asset value per UCP Share and tangible net asset value per UCP Share were extracted from
            the balance sheet, without adjustment, in the interim results of UCP for the six months ended 31
            December 2019.
        2)  Headline earnings per UCP Share and earnings per UCP Share were extracted from the 12-month
            Profit or Loss Statement, calculated as the annual restated audited results for the year ended 30
            June 2019, minus interim restated unaudited results for the six months ended 31 December 2018,
            adding the interim unaudited results for the six months ended 31 December 2019. The UCP results
            were restated to reflect the reclassification of the Nkomati Mine from discontinued to continuing
            operations.
        3)  The financial effects shown reflect Afrimat’s pro forma asset and earnings ratios, considering the
            acquisition of 100% of UCP in terms of the Scheme divided by 280 to show the equivalent of 1 UCP
            share.

3.     INDEPENDENT BOARD RESPONSIBILITY STATEMENT

       The independent board of UCP directors, constituted in relation to the Firm Intention Offer and
       the Scheme, accepts responsibility for the information contained in this announcement which
       relates to UCP and confirms that, to the best of its knowledge and belief, such information which
       relates to UCP is true and this announcement does not omit anything likely to affect the
       importance of such information.


4.     AFRIMAT BOARD RESPONSIBILITY STATEMENT

       The board of directors of Afrimat accepts responsibility for the information contained in this
       announcement which relates to Afrimat and confirms that, to the best of its knowledge and belief,
       such information which relates to Afrimat is true and this announcement does not omit anything
       likely to affect the importance of such information.

5.     WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

       As the pro forma financial effects of the Scheme have now been announced, the Company
       advises that the cautionary announcement dated 25 May 2020, as renewed on 7 July 2020 and
       in the Firm Intention Announcement dated 22 July 2020, is hereby withdrawn and that,
       accordingly, caution is no longer required to be exercised by UCP shareholders when dealing in
       their securities.

4 August 2020

Sponsor and Transaction Advisor to Afrimat              Transaction Advisor to UCP
PSG Capital                                             AcaciaCap Advisors Proprietary Limited

Sponsor to UCP
Questco Corporate Advisory Proprietary Limited

Date: 04-08-2020 03:30:00
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