- March 15, 2010
- Posted by: admin
- Category: SENS Announcements
HCI owns indirectly through various 100% owned subsidiaries (collectively “HCI and Immediate Holdco”), the following investment in Clover Industries Limited (“Clover”):
* 30 881 374 million ordinary shares in the capital of Clover (“Clover Ordinary Shares”), owned by HCI Food & Beverage Investments (Proprietary) Limited,
* 38 057 908 million participating preferences shares in the capital of Clover (“Clover Preference Shares”), owned collectively by Sagewise 118 (Proprietary) Limited and Move On Up 104 (Proprietary) Limited.
HCI has entered into an agreement with Clover Industries Limited for the disposal of its ordinary shares to Clover and a restructuring of the existing preference shares presently issued by Clover.
HCI believes it would be opportune to realise its investment in Clover.
3 Particulars of the transaction
Shareholders of HCI are advised that HCI and Intermediate Holdco have entered into a binding transaction with Clover Industries Limited (“Clover”) pursuant to which:
* Clover will repurchase from HCI and Intermediate Holdco all of the Clover ordinary shares (“Sale shares”) held by HCI and Intermediate Holdco, being 34,99% of the issued ordinary shares of Clover, for an aggregate purchase price of R 337,4 million, to be applied against the reserves of Clover and such shares to be cancelled and restored to the status of authorised share capital in Clover (“the Buy-Back Transaction”), and
* Clover will pay a special dividend to all holders of Clover Preference Shares of R4.10 per Clover Preference Share (“the Special Dividend”). HCI will receive an amount of R156 million as a special dividend, and
* the rights attaching to the preference shares shall will be amended such that the Clover Preference Shares cease to participate in Clover beyond a fixed dividend (calculated at 90% of the Prime rate of ABSA Bank Limited) and such that the Clover Preference Shares shall be redeemed by Clover after three years and one day from the date of such amendment (“the Preference Share Amendment”). HCI`s remaining investment in Clover will be an amount of R110 million in the form of preference shares, which Clover will be obliged to redeem at a fixed date in three years time. (collectively “the Proposed Transactions”).
A further transaction has been proposed pursuant to which certain employees of Clover will acquire 30% of the Clover Ordinary Shares (“the Management Transaction”). HCI and intermediate Holdco are not parties to the Management Transaction.
4 Conditions Precedent
The transaction is subject to the fulfilment of the following conditions precedent:
* The Buy-Back Transaction, the Special Dividend, the Preference Share Amendment and the Management Transaction are inter-conditional such that none of them will be implemented unless the others become unconditional, and
* The Proposed Transactions and The Management Transaction are conditional on, inter alia, required shareholder and regulatory approvals being obtained by not later than 30 April 2010 or such later date as may be agreed between HCI and Intermediate Holdco and Clover.
5 Sale consideration
The sale consideration for the Sale Shares is the sum of R337,4 million.
6 Financial effects The pro forma financial effects of the Transaction on HCI`S earnings per share, headline earnings per share, net asset value per share and net tangible asset value per share for the six months ended 30 September 2009 are not significant (i.e. are less than 3%), and have therefore not been disclosed.