The J&J Group has exercised its option to acquire shares in JSE-listed IT solutions and services company Faritec, increasing its direct shareholding in the organisation by 24.4%, this together with the 14.2 million Faritec shares purchased in 2005 takes J&J's shareholding in Faritec to 30%.
In a BEE transaction entered into in July 2003, the J&J Group acquired a 30% stake in Faritec's subsidiary, Faritec (Pty) Ltd.
In turn, Faritec Holdings acquired an equivalent stake in J&J via an investment in J&J preference shares. This vendor-financed transaction gave J&J the option, after a three-year period, to dispose of its shareholding in Faritec (Pty) Ltd to Faritec Holdings Ltd, before 30 June 2007, in exchange for the issue of shares in Faritec Holdings Ltd, and a redemption of the J&J preference shares.
This option has now been exercised, with a purchase price of R103.6 million payable to J&J for its shares in Faritec (Pty) Ltd. This will be settled by the issue of 61 677 485 Faritec Holdings Ltd shares at R1.3669 per share, and a redemption of the J&J preference shares for R19.3 million.
Simon Tomlinson, CEO of Faritec, said: "As can be seen from the financial effects in the SENS announcement, the exercising of the J&J option is earnings-enhancing to Faritec for the remainder of this financial year and the next financial year, due to the fact that since the BEE transaction was concluded with J&J in July 2003, Faritec Holdings has only been recognising 70% of its earnings. The shares issued to J&J represent 24.4% of Faritec's now issued share capital and will therefore have the effect of improving the earnings per share proportionately."
Jayendra Naidoo, CEO of the J&J Group, said: "As value-added investors in Faritec for the past four years, we are happy to confirm our partnership with Faritec. The company has a positive reputation in the marketplace and solid management who are committed to working with us to create value for all shareholders."
The J&J Group, a strategic investment and management company, is pleased with the progress Faritec is making in the market. As is evident in the period since 2003, and this week, the J&J Group is committed to growing its investment in Faritec, thus assisting the company to meet ICT BEE charter requirements.
"Financial transactions need to create value for the shareholders of an organisation. This transaction is proof that the J&J Group is committed to contributing to Faritec's ongoing drive to grow the business to new heights and to help build a truly South African company," concluded Tomlinson.
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Faritec is a leading black empowered IT services and solutions company listed on the JSE Securities Exchange South Africa. Providing the most customer-centric technology solutions, Faritec combines intellectual capital, resources, technology and business processes to provide tailor-made IT solutions with the objective of assisting customers to manage their businesses more effectively.
For more information, please visit www.faritec.com.
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