ZXSWB - Share Announcement

11-03-2019

Name of Issuer Senwesbel Limited
Country of Incorporation ZA
Registration Number 1996/017629/06
ISIN Number ZAEZ00000026
Share Code ZXSWB

FURTHER ANNOUNCEMENT OF A FIRM INTENTION BY SENWESBEL TO MAKE A GENERAL OFFER TO ACQUIRE ALL OF THE ISSUED ORDINARY SHARES OF KLK LANDBOU LIMITED (“KLK”) AND REVISION OF THE SENWES OFFER

Shareholders are referred to the firm intention by the Senwes Group to make an offer to KLK Shareholders, as described in that announcement (“Senwes Offer”) including the financial effects thereof published on 21 December 2018. Senwesbel hereby gives notice of a revision of the Offer and the financial effects thereof on Senwesbel shares.

The Senwes Group has -

  1. Obtained approval from the Takeover Regulation Panel (“Panel”), in terms of regulation 104 of the Companies Regulations, 2011, to increase the consideration payable in terms of the Senwes Offer to a cash consideration of R19.50 per KLK share (previously R18.50), alternatively 1.5 Senwes shares for each KLK share and/or 2 Senwesbel shares for each KLK share (previously 1.4 and 1.8 respectively)
  2. Provided the Panel with a revised guarantee from Absa Bank Limited for the full increased cash consideration which could become payable in terms of the Senwes Offer.
  3. Exercised their right to waive the previously imposed condition that at least 20% of the KLK Shareholders must accept the Senwes Offer before it becomes binding and, accordingly, such condition no longer applies and the only remaining suspensive condition to the Senwes Group is the obtaining of the requisite regulatory approvals.

The pro-forma financial effects are based on the assumption of an acceptance of a 100% Cash consideration by KLK shareholders payable by Senwes as announced by Senwes on 14 December 2018, and the subsequent effects thereof on Senwesbel.

The financial effects are the responsibility of the directors of Senwesbel and have been prepared for illustrative purposes only to provide Senwesbel shareholders with information about the impact of the KLK acquisition on the financial position and financial performance of Senwesbel. Due to the nature of the Offers and the consideration to be paid, the financial effects may not fairly present Senwesbel’s statement of comprehensive income, statement of financial position, statement of changes in equity and statement of cash flows subsequent to the implementation of the KLK acquisition.

TThe financial effects are presented in accordance with ZAR X’s, Listings Requirements and the guide on pro–forma financial information issued by the South African Institute of Chartered Accountants (SAICA).

The financial effects have been prepared using Senwesbel’s accounting policies and are consistent with International Financial Reporting Statements (“IFRS”) with the basis on which historical information has been prepared in terms of the accounting policies as at 30 April 2018.

The pro-forma financial effects are based on the assumption of an acceptance of a 100% Cash consideration by KLK shareholders payable by Senwes as announced by Senwes on 14 December 2018, and the subsequent effects thereof on Senwesbel.

Financial effect:

Rand per Senwesbel share
Before the acquisition After the acquisition % change
NAV 13.23 12.60 (4.8)
EPS 1.41 1.49 5.7
HEPS 1.45 1.52 4.8

Notes and assumptions:

  1. Senwesbel’s figures set out in the “After the acquisition” column above is based on Senwes acquiring a 100% shareholding in KLK against a 100% payment of the Cash Consideration of R19.50 per KLK share.
  2. NAV per share “After the acquisition” column above, reflects the financial effects on the assumptions that the acquisition was implemented on 30 April 2018 and after incorporating the following adjustments:
    • The acquisition constitutes a Business Combination and IFRS3 principles were applied. The assumption was made that all the assets and liabilities obtained are at fair value which is equal to the carrying value.
    • Issued ordinary shares of 113.7 million shares was used for the basis of the pro forma effect.
  3. EPS and HEPS as set out in the “After the acquisition” column reflects the financial effects on the assumption that the acquisition was implemented on 1 May 2017 and after incorporating the following adjustments made to Senwes:
    • KLK’s profit of R46m after tax and after minorities share of profits were excluded;
    • Interest payable on the purchase price at a prime linked interest rate;
    • Gain on bargain purchase was included, but excluded for purposes of calculation of HEPS;
    • KLK’s depreciation policy differs from that of Senwes. KLK applies the diminishing balance method while Senwes applies the straight line method which leads to an increase in depreciation of KLK
    • An once off acquisition cost was taken into account, but excluded for purposes of the HEPS calculation;
    • Weighted average issued ordinary shares of 116.3 million was used.

The figures set out in the “Before acquisition” column above have been extracted from Senwesbel’s audited Annual Financial Statements for the year ended 30 April 2018. All of the effects for Senwesbel, as set out above, were calculated on Senwesbel’s shareholding in Senwes of 52.56%.

By order of the Board of Directors.

Appointed Advisor:EM Joynt (Mrs)

Place: Klerksdorp

Date:11-08-2019