adminthat one condition precedent to the transaction being implemented remained unfulfilled.
Cambria offered to buy out Celsys minorities, in line with the provisions of the Companies Act, after buying LonZim to become controlling owners with a 60 percent stake, allowing it to rename LonZim Cambria Africa.
The AIM-listed firm said on Friday the High Court had sanctioned the scheme of arrangement for the buyout.
When completed Celsys, shareholders would get one Cambria ordinary share for 636 shares in Celsys or US$0,03 cents per share. Cambria wants to buy out minorities for the 100 percent it needs to provide equity-based funding.
“The directors of Celsys Limited wish to advise shareholders that on June 6, 2012 the High Court of Zimbabwe duly sanctioned a scheme of arrangement,” said Celsys.
“At the present time, one condition precedent is outstanding, which is delaying the scheme being implemented.” .
Cambria said that the scheme would only become effective after the fulfilment of all conditions precedent and after the order of the High Court scheme document had been filed with the Registrar of Companies.
Other conditions precedent included approval by three quarters of minorities, granted by members at a meeting held last month, and receipt of all regulatory approvals.
Upon all the conditions being met, Celsys would be renamed Cambria and assume Celsys listing on the ZSE, which would become the AIM-listed firm’s secondary listing.
The directors of Celsys believed that the ZSE-listed firm required significant capital injection, estimated to be in excess of US$5 million in the medium to long term.
The funding is required for Celsys to continue with its expansion plans as well as to consolidate its market position and thereby earn commensurate returns for shareholders.
Cambria Africa, through a shareholder loan of approximately US$4,5 million, which remains payable to date, primarily funded the firm’s initial expansion plans.
Given the local capital market conditions and historical trends, Cambria, a major shareholder in Celsys, is of the view that any equity-based funding would result in the unfair dilution of the minority shareholders. In addition, minority shareholders may not want to have additional exposure and risks associated with any debt funding structure. Similarly to minorities, Cambria Africa was not prepared to accept the increased risks associated with providing meaningful additional debt to the company in its current ownership form.
Accordingly, to reduce the potential dilution of minorities and the risks associated with current and future debt structure, Cambria proposed a Scheme of Arrangement.
The scheme is expected to allow the minorities to realise the value of their investment by becoming part of an enlarged diversified company, reduce their debt- associated risks in Celsys and enjoy the attendant benefits.
Celsys is in the business of printing security documents such as cheque books, share certificates and deposit books for most financial institutions in Zimbabwe.
It also provides Automated Teller Machines and Point of Sale devices on a transaction-based model to the banking sector.
Online Reporter