MB Technologies to issue shares for cash

By Iain Scott for MB Technologies

Johannesburg, 19 Jul 2001

MB Technologies is planning to issue new shares for cash in a bid to increase its shareholder spread to meet revised JSE regulations.

In terms of the JSE`s rules, which were revised in October last year, at least 20% of listed companies` equity must be held by the public, and there must be at least 500 public shareholders.

MB Technologies` shares have been very tightly held, with the company`s directors holding 61%.

"MB Technologies is planning to issue new shares for cash, which are expected to be placed at a premium to the current market price," the company says.

The share was trading at 140c on the JSE this morning.

The group says its founder shareholders have committed to offer a limited number of shares at the same price to help it meet the free float requirements in terms of the regulations.

"Discussions are currently underway with selected investors at a price which represents a premium to the current market price," the group says.

"This is considered appropriate in view of the group`s historic earnings growth, forecast earnings projections, limited tradability of the shares and the concurrent LiveTechnology licensing announcement."

It adds that the founder shareholders` share will fall to acceptable levels in the medium-term as a result of the placement offer and share issue.

The cash raised by the share issue will be used to fund acquisitions and future growth initiatives.

The group has drawn shareholders` attention to two analyst reports which contain earnings forecasts for the 2001 financial year, and says that "the group`s internal strategic planning process supports the analysts` forecasts".

A report by Credit Suisse First Boston affiliate AMB-DLJ Securities forecasts a 35% increase in headline earnings per share for the full year, while a Wipcapital report forecasts headline earnings per share of 16c, versus 12c previously.