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PNC
PNC
PNC - Pinnacle - Acquisition by Pinnacle of an additional interest in
Centrafin Pty Ltd from Centratel Group Investments Pty Ltd - a small
related party transaction
Pinnacle Technology Holdings Limited
Registration number 1986/000334/06
Share Code: PNC
ISIN: ZAE000022570
("Pinnacle" or the "Company")
ACQUISITION BY PINNACLE OF AN ADDITIONAL INTEREST IN CENTRAFIN
PROPRIETARY LIMITED ("CENTRAFIN") FROM CENTRATEL GROUP INVESTMENTS
PROPRIETARY LIMITED ("CGI") - A SMALL RELATED PARTY TRANSACTION
1. Introduction
Shareholders are advised that Pinnacle entered into a Sale of
Shares Agreement on 28 July 2011 ("the Agreement"), whereby CGI
will dispose of its 39.2% stake in Centrafin ("the Sale Shares") to
Pinnacle for a total purchase price of R11 350 000 ("the Purchase
Price") subject to the fulfilment of the suspensive condition set
out below ("the Transaction").
The effective date shall be 30 June 2011 ("the Effective Date")
provided that the suspensive condition set out in 4 below is
fulfilled.
The business of Centrafin is the provision of medium term financing
solutions to both commercial and public sector entities for the
acquisition of information and communication technology and allied
products both from the Pinnacle Group and from third parties.
Pinnacle already owns 51% of Centrafin. The remaining 9.8% is
owned by Ms J S Gill, the current Managing Director of Centrafin,
who has waived her pre-emptive right to purchase the Sale Shares.
2. Rationale
Pinnacle wishes to re-engineer the business model of Centrafin in a
manner that may necessitate an additional injection of loan funding
that the outside shareholders are unlikely to match by the
provision of either funds or security. The Board of Pinnacle
believes that the re-engineering plans for the business will better
realise the potential that it sees in this business, particularly
in view of the fact the business is a potential enabler for the
group`s core businesses lines. The Board does not wish to grow
this business while there are outside shareholders in Centrafin who
are not employed in the business and will not either share the
financing burden arising out of such growth with the Group or share
the risks inherent therein.
3. Salient terms
In terms of the Agreement, CGI shall dispose of all 39.2% of the
issued ordinary share capital in Centrafin held by it to Pinnacle
for the Purchase Price. Pinnacle shall make payment of the
Purchase Price to CGI in cash within two business days of when the
suspensive condition detailed in 4 below has been fulfilled.
4. Suspensive condition
All suspensive conditions have been fulfilled, save for the
Transaction still being subject to the fulfilment of the following
unfulfilled suspensive condition:
4.1 Compliance by 31 August 2011, or such later date as the
parties may agree, with the JSE Limited ("JSE") Listings
Requirements and any other regulations issued by the JSE from
time to time, including but not limited to Pinnacle obtaining
a fairness opinion on the Transaction from a JSE approved
service provider in a form acceptable to the JSE.
5. Pro forma financial effects
The pro forma financial effects of the Transaction on Pinnacle`s
financial results for the six months ended 31 December 2010 are not
significant.
6. Independent Opinion
The Pinnacle board of directors has appointed Mazars Corporate
Finance (Pty) Limited, an independent expert to provide the Company
with a fairness opinion on the Transaction. The appointment of the
independent expert has been approved by the JSE the independent
expert has issued a fairness opinion which is currently with the
JSE for their approval.
7. Small related party transaction
CGI is a material shareholder in Centrafin. The Purchase Price is
0.75% of the market capitalisation of Pinnacle calculated as at
close of business on 28 July 2011 and therefore the Transaction is
classified to be a small related party transaction in terms of
Section 10.7 of the Listings Requirements of the JSE.
Midrand
29 July 2011
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
Date: 29/07/2011 10:07:01 Produced by the JSE SENS Department.
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