Offer to acquire Cargo Carriers

CCH wants to buy all the shares it does not already own for about R95 million

CARGO Carriers’ largest shareholder CCH has offered to acquire all the shares in the listed logistics and transportation group that it does not already own for about R95 million which, if successful, would result in the company being delisted from the JSE.

CCH currently holds 61.11 percent of the issued shares of Cargo Carriers.

The group said yesterday that the primary rationale for the proposed transaction was the intention to delist the group to provide it with the flexibility required to introduce sustainable broad-based black economic empowerment (B-BBEE) ownership structures.

It said CCH believed it was unsustainable for Cargo Carriers to maintain its listing on the JSE and delisting would result in substantial cost and management time saving.

The group added that its shares were currently not readily tradeable on the JSE and the proposed transaction would provide a liquidity opportunity for shareholders at an attractive premium.

It said the JSE free float requirements also remained a challenge and the introduction of additional B-BBEE structures would exacerbate this.

Cargo Carriers said the offer would be implemented by means of a scheme of arrangement in terms of the Companies Act or, if the scheme failed, through a general offer by CCH to the holders of the shares it did not already own.

The offer price for the shares is R21 a share, which would be adjusted downwards by the amount of any dividends declared by Cargo Carriers after Tuesday this week and prior to the operative date of the scheme.

The price represents a premium of 82.13 percent to the closing price of Cargo Carrier shares on the JSE on January 31 this year, the last day of business immediately before the group issued its first cautionary announcement.

It also represents a 39.33 percent premium to the closing price of Cargo Carrier shares on the JSE on Monday and an identical premium to the volume weighted average price of the group’s shares for the 30 days up to Monday this week.

The group said it had received irrevocable undertakings from shareholders holding a total of 9.26 percent of Cargo Carriers shares and 42.9 percent of the offer shares to vote in favour of the resolutions required to approve the proposed transaction.

It added that a number of Cargo Carrier directors and other entities that held a 17.31 percent interest in the group were either acting in concert with CCH, held treasury shares, were directors or persons related to CCH.

The offer announcement coincided with the release by Cargo Carriers of its financial results for the six months to August.

Solly Letsoalo, the group’s chief executive, said there had been growth within the business with revenue increasing by 9 percent.

Cargo Carriers shares closed unchanged at R15.02 on the JSE yesterday.