|From:||"Cristine Kerr" <firstname.lastname@example.org>|
|Date:||Thu, 15 Apr 2004 09:06:07 +1000|
CBD Energy Update
I recently spoke with one of the Directors as I was concerned with the time frames quoted: I was assured (verbally, I admit) the placement and director options would occur before the 50:1 consolidation and that Directors will do everything possible to ensure share value is not compromised. (Not surprising considering their personal holdings.)
Also must apologise - I accidentally left out important info from my earlier post - See Item 3 which has been added below.
Good news all round.
1) Good News: CBD has signed a contract to purchase O.P. Industries for $7.5M which represents an annual multiple of 2.4 times EBITDA and 2.7 times EBIT - in the opinion of the board the purchase price is fair and reasonable - represents a natural extension of current business activities - greater visibility with major corporates, developers and builders (NB hence notice of capital raising).
Mr Earl Sakareassean has agreed to continue in his role as MD of O.P. Industries (for the next 3 years) and has been invited to join the board of CBD as Executive Director.
Mr Sakareassean - "... Long identified as an area offering growth, CBDE will provide the products, services and knowledge necessary for O.P. Industries to credibly approach their existing and prospective clients with energy saving possibilities. Certainly we are seeing the demand. Tenders are increasingly seeking energy efficient alternatives ... '
Mr Wayne Rudland, CBDE's Chief Operating Officer - " ... complementary and overlapped skills ... far better market coverage ... vertical integration possibilities ... cost advantages - fabrication capability ... "
O.P. Industies have operations in Melbourne, Sydney, Wangaratta, Albury and Ballarat with each providing a 24/7 service support capability - 220 employees - major supplier to hospitals - approved tender for mechanical services to Safeway/Woolworths, Melbourne Univ, Telstra - significant works for other corps including Aust Post, The Age, RMIT, Coles/Myer, GMH, Toll Logistics, Visy, and Pfizer. Top clients over past 5 years (>$20M of business include Probuild Constructions, Multiplex, Telstra, Leighton Contractors, and Hooker Cockram. Settlement for the acquisition is scheduled for 14.5.04.
2) Re 50:1 share consolidation - More Good News - Shares acquired/owned by Bay Terrace Pty Ltd and Directors are subject to the same escrow restrictions as set out in CBD's ASX Announcement dated 30.6.03, namely voluntary escrow until 30 June 2005.
Broadly, the escrow restrictions preclude directors of CBD Energy Limited from selling any shares in the company on market (other than by way of special crossings), and directors must provide the Chairman with at least 3 business days written notice of any intention to sell shares off market (including special crossing).
A) Non-Exec Director: Nick Kephala - continued to acquire late 2003
- holding 142,480,823
B) Non-Exec Director: David Hood - has acquired 4,132,333 (direct) & 750,000 (indirect) in total
C) Major Shareholder: Bay Terrace Holdings Pty Ltd - holding 919,845,892 (45.6% control of voting power)
D) Chief Financial Officer: Robert Edis - new - nil holding to-date
E) Non-Exec Chairman - Gerry McGowan (assoc TRW Holdings Pty Ltd) - new - nil holding to-date
3) Re Share Issue to raise $10M - Again, Good News:
A) ' ... Directors have agreed that the capital raised may only be utilised to fund acquisitions that result in positive earnings per share for the Company as a whole. ... '
B) ' ... It is envisaged that the funds will be raised by placements to institutions and sophisticated investor clients of stockbrokers once a proposed acquisition is nearing completion. The company is only raising funds for acquisition purposes. ... '
C) ' ... at an issue price of at least 90% of the weighted average market price of the Company's fully paid ordinary shares over the preceding 5 trading days before the day on which the issue is made, and in any event, not less than $0.011 per share[U]. ... '