JSE EQS
BIEQS EQS
EQS/EQS01/EQS02/EQS04 - Eqstra Holdings Limited - Sale of Eqstra Mining
Services Business (Including The Bucyrus Distributorship Rights of Eqstra) and
withdrawal of cautionary announcement
EQSTRA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/011672/06)
ISIN: ZAE000117123
JSE share code: EQS, EQS01, EQS02, EQS04
("Eqstra" or "the Company")
SALE OF EQSTRA MINING SERVICES BUSINESS (INCLUDING THE BUCYRUS DISTRIBUTORSHIP
RIGHTS OF EQSTRA) AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements dated 17 October 2011, 28
November 2011, 12 January 2012 and 23 February 2012, shareholders are
advised that Eqstra has concluded an agreement with Caterpillar Global
Mining LLC ("Caterpillar") to sell its Eqstra Mining Services business
units in South Africa and Botswana, which are responsible for the Bucyrus
International Inc. ("Bucyrus") distributorship, to Bucyrus Africa
Underground (Proprietary) Limited and Bucyrus Botswana (Proprietary)
Limited(collectively "the Purchaser") as going concerns (collectively
"the Disposal").
2. RATIONALE
Eqstra, through a wholly owned subsidiary, entered into a seven year
distributorship agreement in December 2006 with Terex Corporation
Inc.("Terex"). The Terex mining equipment division was subsequently sold
to Bucyrus and rebranded. (It must be noted that this sale does not
include the Terex Rigid trucks, articulated dump trucks (ADT`s) or Terex
Cranes as these will continue to be distributed by Eqstra).
In July 2011 Caterpillar completed its acquisition of Bucyrus.
Caterpillar has an existing distribution infrastructure within South
Africa and Caterpillar and Eqstra agreed that it would be in both their
interests to effect the Disposal.
3. TERMS OF THE DISPOSAL
i) The Disposal comprises:
- the transfer of all maintenance and repair contracts and services
contracts relating to the Bucyrus equipment;
- all Bucyrus inventories, equipment and tooling, including work in
progress; and
- all related leases and other physical and tangible assets used or
comprised in the business.
ii) Conditions precedent
The Disposal is subject to, inter alia, the fulfillment of the following
conditions precedent:
- all and any approvals required in terms of the Competition Act from
the Competition Authorities, both in South Africa and Botswana, for
the implementation of the Disposal are granted;
- a stock-take be undertaken and the inventory schedules are signed by
both parties.
iii) Effective date
The effective date of the Disposal ("effective date") is expected to be
29 June 2012, upon the fulfillment of the above conditions precedent.
iv) The purchase price
The purchase price payable by the Purchaser to Eqstra for the Disposal,
against delivery of the business will be R475 000 000.00 (four hundred
seventy-five million Rand) based on June 2011 inventory values, being the
values stated in the sales contracts and is subject to inventory
adjustments at the effective date.
4. PRO FORMA FINANCIAL INFORMATION
The table below sets out the unaudited pro forma financial effects of the
Disposal on the unaudited Eqstra interim results for the six months ended
31 December 2011. The unaudited pro forma financial effects have been
prepared in accordance with the Listings Requirements, the Guide on Pro
Forma Financial Information issued by SAICA and the measurement and
recognition requirements of International Financial Reporting Standards
(IFRS). The accounting policies used to prepare the unaudited pro forma
financial effects are consistent with those applied in the preparation of
the interim results for the six months ended 31 December 2011.
The unaudited pro forma financial effects have been prepared for
illustrative purposes only, in order to provide information on how the
Disposal may have affected the financial results and position of a Eqstra
shareholder and, because of their nature, may not give a true reflection
of the actual financial effects of the Disposal. The unaudited pro forma
financial effects are the responsibility of the directors.
Per Eqstra share Before the After the Change Notes
Disposal Disposal (%)
(cents)1 (cents)2
Basic earnings 47.1 45.6 (3.2%) 3, 4
Diluted basic earnings 45.7 44.3 (3.2%) 3, 4
Headline earnings 36.8 35.3 (4.1%) 3, 4
Diluted headline 35.7 34.2 (4.1%) 3, 4
earnings
Net asset value 641.2 678.6 5.8%
Tangible net asset 635.6 673.0 5.9%
value
Number of shares in 428.7 428.7
issue
Weighted average number 420.1 420.1
of share in issue
(million)
Diluted weighted 433.0 433.0
average number of
shares in issue
(million)
Notes to the unaudited pro forma financial effects:
1. The "Before the Disposal" column reflects:
- the basic earnings, diluted basic earnings, headline earnings and
diluted headline earnings per Eqstra share for the six months ended
31 December 2011 based on a weighted average number of shares of 420
059 435 and a diluted weighted average number of shares of 432 919
041; and
- the net asset value and the tangible net asset value per Eqstra
share as at 31 December 2011 based on the total number of shares in
issue of 428 668 392.
2. The "After the Disposal" column is based on the assumption that a
purchase price of R572 million is received and net assets of R412
million, based on 31 December 2011 published results, is disposed of with
effect from 1 July 2011 for earnings per share and with effect from 31
December 2011 for net asset value and tangible net asset value per share
purposes.
3. Earnings have been adjusted to remove the profit after tax of the
business unit of R24 million and increased by the net finance charges
assumed in respect of the Disposal of R18 million (after taxation of 28%)
which are based on an assumed interest rate of 8.6%. This effect is
expected to be of a continuing nature.
4. Once-off net transaction costs assumed in respect of the Disposal have
not been taken into account as this is assessed as immaterial.
The directors are not aware of any subsequent events post 31 December
2011 that are likely to have a significant impact on the above financial
effects.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
As all the terms of the Disposal are contained herein, caution is no
longer required to be exercised by shareholders when dealing in their
Eqstra shares.
Kempton Park
14 March 2012
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 14/03/2012 09:50:01 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.
Recommend:
