Sekunjalo subscribes for up to 25% shareholding in SAAB SA


Wednesday, 16 June 2010 20:02 Sekunjalo subscribes for up to 25% shareholding in SAAB SA

Sekunjalo subscribes for up to 25% shareholding in SAAB SA and completes new strategic agreement with SAAB AB with strong focus on the defence sector in sub-Saharan Africa and withdrawal of cautionary announcements

 

1. INTRODUCTION

Shareholders are hereby advised that Sekunjalo has concluded an agreement (“the agreement”), on 27 May 2010, with Saab AB and Saab SA (“the parties”), whereby the parties agreed to form a strategic relationship in relation to the defence and civil security business performed by Saab SA and in terms of which Sekunjalo will become a shareholder of Saab SA (hereinafter referred to as “the transaction”).

2. SALIENT TERMS OF THE TRANSACTION

In terms of the aforesaid agreement Sekunjalo shall acquire an upfront equity interest in Saab SA entitling Sekunjalo to 25% voting rights and 5% economic entitlement. Sekunjalo will be entitled to increase its economic interest to a maximum of 25%  which is based on the performance of Saab SA over the 5 year period. Such economic interest will entitle Sekunjalo to participate in the distribution of assets or capital of Saab SA (including, inter alia, dividends, payments and other distributions), as determined in accordance with a predetermined formula in terms of the agreement.

Due to the focus of the transaction being in the defence sector, Sekunjalo’s investment in Saab SA excludes any entitlement to participate in profits of or any distribution of the assets or capital and/or vote in any matters related to the subsidiaries of Saab SA, Saab Grintek Technologies (Pty) Limited, and Fullinput (Pty) Limited.

Sekunjalo will also be entitled to appoint 2 directors to the board of directors of Saab SA.

3. BUSINESS OF SAAB SA

Saab SA is a subsidiary of Saab AB, a listed company in Sweden, and serves the global market with world leading products, services and solutions ranging from defence to civil security. Saab AB is desirous to improve its global market position and more specifically in South Africa and the Sub-Saharan region. Saab’s key offerings include command and control solutions, tactical communication systems and products, aerospace, surveillance and sensor systems, and a wide range of civil security applications including disaster management solutions and integrated security solutions for the protection of national key points.  

4. RATIONALE FOR THE TRANSACTION

Sekunjalo is firmly established as the pre-eminent black empowerment group continuously looking for strategic opportunities. This relationship with Saab AB is in line with the company strategy to becoming a partner of choice to multinationals. The company’s World Economic Forum Global status provides a network platform with the international business community which brings strategic partners and opportunities to the Sekunjalo Group. This transaction reflects Sekunjalo’s value of job creation, alleviating poverty and finding solutions in Africa and this also reinforces Saab AB’s commitment to industrial growth and future prosperity of South Africa.

5. PURCHASE CONSIDERATION

The purchase consideration for the transaction is a nominal amount for the 372 subscription shares.

6. EFFECTIVE DATE

The effective date is the last date of the calendar month during which all of the conditions precedent to the transaction has been fulfilled. The transaction is subject to conditions normal for a transaction of this nature.

7. OTHER INFORMATION TO SHAREHOLDERS

To the extent required by the JSE , shareholders will be advised in due course of any action that may be required of them in terms of the transaction.

8. PRO FORMA FINANCIAL EFFECTS

The unaudited pro forma financial effects of the transaction are presented for illustrative purposes only and because of their nature may not give a fair reflection of Sekunjalo’s financial position nor of the effect on future earnings after the transaction. Set out below are the unaudited pro forma financial effects of the transaction based on Sekunjalo’s unaudited interim results for the 6 months ended 28 February 2010, The directors of Sekunjalo are responsible for the preparation of the unaudited pro forma financial effects.

 


Audited before transaction (1) Unaudited after transaction (2)(3)(4) % change
EPS (cents) 0.71 5.06 610.76%
HEPS(cents) 0.23 4.58 1900.45%
NAV per share (cents) 81.26 85.63 5.38%
NTAV per share (cents) 64.56 68.91 6.74%

Shares in issue (‘000) 489 339 489 339 -
Weighted average number of shares in issue (‘000) 489 339 489 339 -

Notes:
Extracted from Sekunjalo’s unaudited interim results for the period ended 28 February 2010;
The unaudited pro forma financial effects after the transaction has been calculated based on the assumption that the transaction was effected on 1 September 2009 for the purposes of calculating the earnings per share (“EPS”) and headline earnings per share (“HEPS”) effects and based on the assumption that the transaction was effected on 28 February 2010 for purposes of calculating the net asset value (“NAV”) per share and net tangible asset value (“NTAV”) per share;
The deferred tax is calculated at an effective tax rate of 14%; and
The investment in Saab SA is accounted as a financial investment at fair value through profit and loss based on the directors’ valuation of Saab SA at transaction date.

9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

Sekunjalo shareholders are referred to the cautionary announcement dated 11 May 2010, and caution is no longer required to be exercised by shareholders when dealing in their securities.

Cape Town
3 June 2010

Sponsor to Sekunjalo
PSG Capital (Pty) Limited

Investment Bank to Saab SA
Investec Corporate Finance

ited pro forma financial effects of the transaction are presented for illustrative purposes only and because of their nature may not give a fair reflection of Sekunjalo’s financial position nor of the effect on future earnings after the transaction. Set out below are the unaudited pro forma financial effects of the transaction based on Sekunjalo’s unaudited interim results for the 6 months ended 28 February 2010, The directors of Sekunjalo are responsible for the preparation of the unaudited pro forma financial effects.

 


Audited before transaction (1) Unaudited after transaction (2)(3)(4) % change
EPS (cents) 0.71 5.06 610.76%
HEPS(cents) 0.23 4.58 1900.45%
NAV per share (cents) 81.26 85.63 5.38%
NTAV per share (cents) 64.56 68.91 6.74%

Shares in issue (‘000) 489 339 489 339 -
Weighted average number of shares in issue (‘000) 489 339 489 339 -

Notes:
Extracted from Sekunjalo’s unaudited interim results for the period ended 28 February 2010;
The unaudited pro forma financial effects after the transaction has been calculated based on the assumption that the transaction was effected on 1 September 2009 for the purposes of calculating the earnings per share (“EPS”) and headline earnings per share (“HEPS”) effects and based on the assumption that the transaction was effected on 28 February 2010 for purposes of calculating the net asset value (“NAV”) per share and net tangible asset value (“NTAV”) per share;
The deferred tax is calculated at an effective tax rate of 14%; and
The investment in Saab SA is accounted as a financial investment at fair value through profit and loss based on the directors’ valuation of Saab SA at transaction date.

9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

Sekunjalo shareholders are referred to the cautionary announcement dated 11 May 2010, and caution is no longer required to be exercised by shareholders when dealing in their securities.

Cape Town
3 June 2010

Sponsor to Sekunjalo
PSG Capital (Pty) Limited

Investment Bank to Saab SA
Investec Corporate Finance

Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/006093/06)
Share code: SKJ & ISIN: ZAE000017893
("Sekunjalo" or “the company”)