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Pinnacle - concludes B-BBEE transaction
Shareholders are referred to the announcement on SENS on 27 June 2016 (“First Announcement”). Unless indicated otherwise below, the defined terms in the First Announcement shall bear the same meaning in this announcement.
In terms of the First Announcement, shareholders were inter alia advised that:
- the board resolved to pursue a B-BBEE ownership transaction, which includes a group restructure through its wholly-owned subsidiary DCT Holdings (“Group Restructure”) prior to the implementation of the Proposed B-BBEE Transaction (“B-BBEE Transaction”); and
- a broad-based trust to be known as the Pinnacle Foundation Trust will, through its wholly-owned subsidiary being the Pinnacle Foundation (RF) Pty) Ltd., act as the B-BBEE partner to the B-BBEE Transaction and will subscribe for 29,9% of the ordinary issued shares in DCT Holdings (“B-BBEE Shares”).
Conclusion of transaction agreements and fulfilment of conditions precedent
Further to the above, the board is pleased to advise that:
- Pinnacle acted as founder (“Founder”) for the establishment of the Pinnacle Foundation Trust and that the Pinnacle Foundation Trust has been duly established and registered at the Master’s Office with registration number IT 001920/2016(T) (“Pinnacle Foundation Trust”);
- Pinnacle Foundation (RF) Pty) Ltd. has been duly incorporated with the Companies and Intellectual Property Commission (“CIPC”) with registration number 2016/307601/07 (“Pinnacle Foundation (RF) Pty) Ltd.”);
- Confirmation was received from CIPC that DCT Holdings has adopted a new memorandum of incorporation which was required to facilitate the Preference Share Subscription and the B-BBEE Subscription as detailed below; and
- the appropriate agreements relating to the Group Restructure, the Preference Share Subscription and the B-BBEE Subscription were duly concluded and have become unconditional.
Objectives
The B-BBEE Transaction has been structured to meet the following objectives:
- pursue real and sustainable empowerment aimed at empowering previously disadvantaged stakeholders with a focus on broad-based groupings;
- create a sustainable and non-*complex funding structure which is not reliant on external bank funding, share price appreciation or dividend payments;
- materially improve DCT Holdings and its subsidiaries’ (“DCT Holdings Group”) B-BBEE ownership credentials;
- complement existing B-BBEE initiatives; and
- preserve existing value for current shareholders.
Financial effects of the B-BBEE Transaction
Any distributions by the Pinnacle Foundation Trust to its beneficiaries shall be included in the consolidated earnings of Pinnacle for the purposes of calculating basic earnings per share (“EPS”) in terms of IAS 33 Earnings Per Share. Other than fees paid to the professional advisors and related transaction costs, there will be no further impact on EPS or HEPS in the consolidated financial statements of Pinnacle arising from the B-BBEE Transaction on the current earnings.
Pinnacle will consolidate the 29,9% ordinary shares indirectly held by the Pinnacle Foundation Trust given that, as the Founder, it has the responsibility to appoint the trustees.
The Preference Share Subscription and Special Distribution will eliminate on the consolidation of Pinnacle as these are inter* group transactions.
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