26 September 2012

 

 

PME AFRICAN INFRASTRUCTURE OPPORTUNITIES PLC

("PME" or the "Group") (AIM: PMEA.L)

 

Interim results for the six months ended 30 June 2012

 

PME African Infrastructure Opportunities plc, an investment company established to invest in sub-Saharan African infrastructure and infrastructure related industries, announces its results for the six months ended 30 June 2012.

 

Key Information:

 

 

·      Operating loss reduced to US$1.6 million (six months ending 30 June 2011: US$1.8 million)

 

·      Net Asset Value increased to US$58.0 million (40 cents per share), 1% up from the US$57.5 million (40 cents per share) as at 31 December 2011

 

·      The Company intends to realise its investments and return capital to Shareholders through a series of tender offers

 

·      Proposed return of approximately US$13m by way of initial tender offer, equivalent to 9c per Ordinary Share to holders on the record as at 25 October 2012

 

·      Circular accompanying Notice of AGM and Initial Tender Offer Document sent to Shareholders today

 

·      Following termination of investment management contract which took effect in July 2012, the Company is now self-managed.

 

 

For further information please contact:

 

 

Smith & Williamson Corporate Finance Limited	Azhic Basirov / Siobhan Sergeant	+44 20 7131 4000
Oriel Securities Limited	Joe Winkley / Neil Winward	+44 20 7710 7600

 

 

Chairmans Statement

 

On behalf of the Board, I am pleased to present the interim results for PME African Infrastructure Opportunities plc ("PME" or "the Company") for the six months to 30 June 2012.

 

Investments

The Company's investments comprise rail assets in South Africa that include the ownership of twelve mainline locomotives for lease by end-users, and the ownership of commercial premises in Dar-es-Salaam, Tanzania.  As previously announced, the Company intends to realise these investments and wind itself up.

 

We have seen greatly improved demand for locomotives, and are encouraged by developments at Sheltam. Two of our C30 locomotives have been involved in an accident in Mozambique, fortunately without loss of life. They are the subject of an insurance claim, and are, in management's view, beyond repair.

 

Financial Results

Our investments in the telecommunications segment were controlling stakes and therefore for accounting purposes their operating losses are required to be consolidated in the financial statements.

 

The operating loss attributable to ordinary shareholders for the period was US$1.6 million (six months ending 30 June 2011: US$1.8 million). This net result includes US$1.8 million (six months ending 30 June 2011: US$1.9 million) of finance income generated by our fleet of twelve C30 railway locomotives and US$0.8 million (six months ending 30 June 2011: US$1.5 million) of revenues from the telecommunications segment.  

 

At 30 June 2012, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$58.0 million (40 cents per share), 1% up from the US$57.5 million (40 cents per share) that was reported as at 31 December 2011.  

 

Post Balance Sheet Events and Return of Capital

As has already been announced, notice of termination was given to PME Infrastructure Managers in July 2011, which took effect in July 2012.  The Company is now self-managed.

 

In the meantime, and following the payment of a dividend of 14 cents per Ordinary Share on 29 July 2011, it is now proposed to return approximately US$13 million by way of tender offer, equivalent to a  further 9 cents per Ordinary Share, in this case to holders on the record as at 25 October 2012.  Further details of these and other proposals are included with the circular and tender offer document dispatched to shareholders at the same time as this report.

 

 

 

David von Simson

Chairman

25 September 2012

 

 

Consolidated Income Statement

 

 

		(Unaudited)  Period from 1 January 2012 to 30 June 2012	(Represented) (Unaudited) Period from 1 January 2011 to 30 June 2011
	Note	US$'000	US$'000
Continuing operations
Revenue		-	-
Investment Manager's fees	4	(357)	(648)
Operating and administration expenses	5	(920)	(1,371)
Foreign exchange loss		(719)	(20)
Operating loss		(1,996)	(2,039)
Finance income	6	2,463	2,366
Share of loss of associate	9.2	-	(1,177)
Profit/(loss) before income tax		467	(850)
Income tax	7	(51)	(68)
Profit/(loss) for the period from continuing operations		416	(918)
Discontinued operations
Loss for the period from discontinued operations	15	(1,951)	(5,968)
Loss for the period		(1,535)	(6,886)
Loss attributable to:
Owners of the parent		(1,590)	(1,802)
Non-controlling interests		55	(5,084)
		(1,535)	(6,886)
Basic and diluted loss per share (cents) from continuing and discontinued operations attributable to the equity holders of the Company during the period
From continuing operations	8	0.29	(0.64)
From discontinued operations		(1.40)	(0.61)
From loss for the period		(1.11)	(1.25)

 

Consolidated Statement of Comprehensive Income

		(Unaudited) Period from 1 January 2012 to 30 June 2012	(Represented) (Unaudited) Period from 1 January 2011 to 30 June 2011
		US$'000	US$'000
Loss for the period		(1,535)	(6,886)
Other comprehensive income/(expense)
Foreign exchange translation differences - continuing operations		(156)	(257)
Foreign exchange translation differences - discontinued operations		2,251	(850)
Other comprehensive income/(expense) for the period		2,095	(1,107)
Total comprehensive income/(expense) for the period		560	(7,993)
Total comprehensive income/(expense) attributable to:
- Owners of the parent		505	(3,064)
- Non-controlling interests		55	(4,929)
		560	(7,993)
Total comprehensive income/(expense) attributable to equity shareholders arises from:
- Continuing operations		260	(1,175)
- Discontinued operations		245	(1,889)
		505	(3,064)

 

 

Consolidated Balance Sheet

	Note	(Unaudited) As at 30 June 2012	(Audited) As at 31 December 2011
		US$'000	US$'000
Assets
Non-current assets
Loan due from associate	9.2	8,212	8,001
Property, plant and equipment	11	21	29
Finance lease receivables	12	22,931	24,317
Total non-current assets		31,164	32,347
Current assets
Finance lease receivables	12	2,716	2,574
Loan due from associate	9.2	6,325	4,946
Trade and other receivables	13	175	219
Cash and cash equivalents	14	12,930	13,180
		22,146	20,919
Assets of disposal group classified as held for sale	15	5,917	13,131
Total current assets		28,063	34,050
Total assets		59,227	66,397
Equity and liabilities
Equity attributable to owners of the parent:
Issued share capital	16	1,438	1,438
Foreign currency translation reserve		(1,190)	(3,285)
Capital redemption reserve		367	367
Retained earnings		57,376	58,966
		57,991	57,486
Non-controlling interests		-	-
Total equity		57,991	57,486
Current liabilities
Trade and other payables	18	200	339
		200	339
Liabilities of disposal group classified as held for sale	15	1,036	8,572
Total current liabilities		1,236	8,911
Total liabilities		1,236	8,911
Total equity and liabilities		59,227	66,397

 

The financial statements on pages 3 to 26 were approved and authorised for issue by the Board of Directors on 25 September 2012 and signed on its behalf by:

 

 

David von Simson                                Paul Macdonald

Director                                                   Director

 

 

Consolidated Statement of Changes in Equity

 

 

	Attributable to owners of the parent
	Share capital	Foreign currency translation reserve	Capital redemption reserve	Retained earnings	Total	Non-controlling interests	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 1 January 2011	1,513	(3,885)	292	104,455	102,375	(9,877)	92,498
Comprehensive income
Loss for the period	-	-	-	(1,802)	(1,802)	(5,084)	(6,886)
Other comprehensive expense
Foreign exchange translation differences	-	(1,262)	-	-	(1,262)	155	(1,107)
Total comprehensive expense for the period	-	(1,262)	-	(1,802)	(3,064)	(4,929)	(7,993)
Balance at 30 June 2011	1,513	(5,147)	292	102,653	99,311	(14,806)	84,505

 

 

Balance at 1 January 2012	1,438	(3,285)	367	58,966	57,486	-	57,486
Comprehensive income
Loss for the period	-	-	-	(1,590)	(1,590)	55	(1,535)
Other comprehensive income
Foreign exchange translation differences	-	2,095	-	-	2,095	-	2,095
Total comprehensive income for the period	-	2,095	-	(1,590)	505	55	560
Transactions with owners
Non-controlling interest settled on disposal	-	-	-	-	-	(55)	(55)
Total transactions with owners	-	-	-	-	-	(55)	(55)
Balance at 30 June 2012	1,438	(1,190)	367	57,376	57,991	-	57,991

 

 

Consolidated Cash Flow Statement

	Note	(Unaudited) Period from 1 January 2012 to 30 June 2012	(Unaudited) Period from 1 January 2011 to 30 June 2011
		US$'000	US$'000
Operating activities
Loss for the period before income tax including discontinued operations		(1,464)	(6,818)
Adjustments for:
Realised losses on sale of property, plant and equipment		-	53
Finance income		(2,463)	(2,366)
Depreciation and amortisation		1,173	1,515
Share of loss of associates		-	1,177
Loss on disposal of subsidiary		103	-
Foreign exchange loss		2,822	19
Operating profit/(loss) before changes in working capital		171	(6,420)
(Increase)/decrease in inventory		(2,580)	287
Decrease in trade and other receivables		47	267
Increase/(decrease) in trade and other payables		1,024	(1,845)
Cash used in operations		(1,338)	(7,711)
Income tax paid		(84)	(170)
Interest received		104	22
Lease rental income received		1,025	2,016
Net cash used in operating activities		(293)	(5,843)
Investing activities
Net cash movement on disposal of subsidiary	21	(32)	-
Loan to associate	9.2, 13	-	(7)
Purchase of property, plant and equipment		-	(404)
Sale of property, plant and equipment		-	35
Cash restricted by bank guarantees		-	(278)
Net cash used in investing activities		(32)	(654)
Net decrease in cash and cash equivalents		(325)	(6,497)
Cash and cash equivalents at beginning of period		13,180	44,883
Foreign exchange gains/(losses) on cash and cash equivalents		75	(371)
Cash and cash equivalents at end of period	14	12,930	38,015

 

 

Notes to the Financial Statements

 

1              General Information

 

PME African Infrastructure Opportunities plc (the "Company") was incorporated and is registered and domiciled in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 19 June 2007 as a public limited company with registered number 120060C. The investment objective of PME African Infrastructure Opportunities plc and its subsidiaries (the "Group") is to achieve significant total return to investors through investing in various infrastructure projects and related opportunities across a range of countries in sub-Saharan Africa.

 

The Company's investment activities were managed by PME Infrastructure Managers Limited (the "Manager") to 6 July 2012. No alternate has been appointed therefore the Board of Directors has assumed responsibility for the management of the Company's remaining assets. The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

 

Pursuant to its AIM admission document dated 6 July 2007, there was an original placing of up to 180,450,000 Ordinary Shares with Warrants attached on the basis of 1 Warrant for every 5 Ordinary Shares. Following the close of the placing on 12 July 2007, 180,450,000 Shares and 36,090,000 Warrants were issued. The Warrants lapsed in July 2012.

 

The Shares of the Company were admitted to trading on AIM, a market of the London Stock Exchange, on 12 July 2007 when dealings also commenced.

 

Financial Year End

The financial year end for the Company is 31 December in each year.

 

Company Profit

The amount of the Company's loss for the period recognised in the Consolidated Income Statement is US$1,110,453 after impairment of intercompany balances amounting to US$309,043 and release of impairment to its investment in subsidiaries amounting to US$184,948 (period ended 30 June 2011: loss US$1,736,892, no impairment of intercompany balances or investments in subsidiaries).

 

2              Summary of Significant Accounting Policies

 

The accounting policies applied by the Group in the preparation of these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 December 2011.

 

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

 

The interim financial statements for the six months ended 30 June 2012 are unaudited. The comparative interim figures for the six months ended 30 June 2011 are also unaudited.

 

3              Segment Information

 

The chief operating decision-makers in the period have been identified as the Board and the Investment Manager. The Board and the Investment Manager review the Group's internal reporting in order to assess performance and allocate resources. They have determined the operating segments based on these reports. The Board and the Investment Manager consider the business on a project by project basis by type of business. The type of business is telecommunications (wireless and broadband services), transport (railway) and leasehold.

 

Six months ended         30 June 2012	Telecommunications		Transport			Leasehold		Other*		Total
	Dovetel	TMP Uganda		Sheltam	PME  Locos		PME Properties
	US$'000	US$'000		US$'000	US$'000		US$'000		US$'000		US$'000
Finance income	-	-		368	2,088		-		7		2,463
Depreciation and amortisation - continuing	-	-		-	(8)		-		-		(8)
Depreciation and amortisation - discontinued	(1,165)	-		-	-		-		-		(1,165)
Profit/(loss) for the period from continuing operations	-	(7)		342	1,311		-		(1,230)		416
Profit/(loss) for the period from discontinued operations	(2,175)	-		-	-		169		-		(2,006)
Segment assets	7	6		8,223	34,647		5,910		10,434		59,227
Segment liabilities	(1)	(2)		(20)	(35)		(1,035)		(143)		(1,236)

 

* Other refers to income and expenses of the Group not specific to any specific sector such as fees of the Investment Manager and income on un-invested funds. Other assets comprise cash and cash equivalents US$10,285,334 (note 14) and other assets US$148,746.

 

Six months ended  30 June 2011	Telecommunications			Transport		Leasehold	Other	Total
(Represented)	Dovetel	Econet	TMP Uganda	Sheltam	PME Locos	PME Properties
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Finance income	-	-	-	386	1,958	-	22	2,366
Depreciation and amortisation - continuing	-	-	-	-	(8)	-	-	(8)
Depreciation and amortisation - discontinued	(1,157)	-	(299)	-	-	(51)	-	(1,507)
Share of loss of associate	-	-	-	(1,177)	-	-	-	(1,177)
Profit/(loss) for the period from continuing operations	-	(36)	(9)	(832)	1,867	-	(1,908)	(918)
Profit/(loss) for the period from discontinued operations	1,126	-	(2,088)	-	-	78	-	(884)
Additions to non-current assets (other than financial instruments)	(313)	-	(91)	-	-	-	-	(404)
Segment assets	13,183	-	5,310	9,205	32,888	2,744	33,665	96,995
Segment liabilities	(6,647)	-	(5,161)	(19)	(36)	(225)	(402)	(12,490)

 

The total of non-current assets other than financial instruments and deferred tax assets is US$20,605 (30 June 2011: US$15,780,539) and all of these are located in other countries outside of the Isle of Man. These are split between three countries as follows:

 

	Period ended 30 June 2012 US$'000	Period ended 30 June 2011 US$'000
Mauritius	21	38
Tanzania	-	12,770
Uganda	-	2,973
	21	15,781

 

4              Investment Manager's Fees

 

Annual fees

The Investment Manager receives a management fee of 1.25% per annum of the gross asset value of the Group from Admission, payable quarterly in advance and subject to a cap of 3% per annum of the net asset value of the Group. On 6 July 2011, the Company served formal notice on the Investment Manager to terminate the Management agreement dated 6 July 2007 between the Company and the Investment Manager, to take effect on 6 July 2012.

 

The Investment Manager is entitled to recharge to the Group all and any costs and disbursements reasonably incurred by it in the performance of its duties including costs of travel save to the extent that such costs are staff costs or other internal costs of the Investment Manager. Accordingly, the Group is responsible for paying all the fees and expenses of all valuers, surveyors, legal advisers and other external advisers to the Group in connection with any investments made on its behalf. All amounts payable to the Investment Manager by the Group are paid together with any value added tax, if applicable. Management fees payable for the period ended 30 June 2012 amounted to US$357,326 (30 June 2011: US$648,381).

Performance fees

The Investment Manager is entitled to a performance fee of 20% of the net income and capital cash returns to the Company or any subsidiary in respect of the sale or partial sale, refinancing or restructuring of an investment in an infrastructure project ("relevant investment") provided that the "Project test" has been passed. For these purposes, the Project test will be passed if the Company or any subsidiary has received in cash the return of all its cash invested in a relevant investment and a return equivalent to an internal rate of return of 12% on such cash.

 

80% of the performance fee calculated will be payable to the Investment Manager within 30 days of the receipt of the relevant returns by the Company. The balance will be paid at the same time into an escrow account invested in money market deposits.

 

At the end of each financial year the Total Return will be calculated and the total performance fee will be calculated as 20% of the Total Return multiplied by the weighted average number of Ordinary Shares in issue during the year. This is provided that the Total Return exceeds the NAV test, being the proceeds of the Placing Shares increased at a rate of 12% per annum on an annual compound basis from the date of Admission to the Relevant End Date. Total Return is the difference between the net asset value per Ordinary Share as at the last business day of the relevant financial year and the net proceeds of the Placing Shares divided by the number of Placing Shares.

 

Performance fees payable for the period ended 30 June 2012 amounted to US$nil (30 June 2011: US$nil).

 

5              Operating and Administration Expenses

 

	Period ended 30 June 2012 US$'000	(Represented) Period ended 30 June 2011 US$'000
Administration expenses	83	110
Administrator and Registrar fees (note 20)	70	143
Audit fees	82	65
Custodian fees	-	1
Depreciation	8	8
Directors' fees	121	190
Professional fees	423	582
Travel	8	70
Other	125	202
Operating and administration expenses	920	1,371

 

Administrator and Registrar fees

The Administrator receives a fee of 10 basis points per annum of the net assets of the Company between £0 and £50 million; 8.5 basis points per annum of the net assets of the Company between £50 and £100 million and 7 basis points per annum of the net assets of the Company in excess of £100 million, subject to a minimum monthly fee of £4,000 and a maximum monthly fee of £12,500 payable quarterly in arrears.

 

Administration fees payable by the Company for the period ended 30 June 2012 amounted to US$42,955 (30 June 2011: US$90,062).

 

The Administrator provides general secretarial services to the Company, for which it receives a minimum annual fee of £5,000. Additional fees, based on time and charges, will apply where the number of Board meetings exceeds four per annum. For attendance at meetings not held in the Isle of Man, an attendance fee of £750 per day or part thereof will be charged. The fees payable by the Company for general secretarial services for the period ended 30 June 2012 amounted to US$11,534 (30 June 2011: US$4,818).

 

The Administrator oversees the administration of the Mauritian subsidiaries. The minimum annual fee for each of these companies is £5,000 per annum. Administration fees of the Mauritian subsidiaries for the period ended 30 June 2012 amounted to US$26,932 (30 June 2011: US$73,521). 

 

Custodian fees

The Custodian received a fixed monthly fee of £875 payable quarterly in arrears. The Company terminated the custodian agreement between the Company and the Custodian with effect from 19 January 2011. The fee payable for the period ended 30 June 2012 amounted to US$nil (30 June 2011: US$1,037).

 

Directors' Remuneration

The maximum amount of basic remuneration payable to the Directors permitted under the Articles of Association is £200,000 per annum. The Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The non-executive (excluding the Chairman) Directors are entitled to receive an annual fee of £30,000 each and the Chairman £35,000.  

 

The Directors' fees payable by the Company for the period ended 30 June 2012 amounted to US$120,834 (30 June 2011: US$189,534) and Directors' insurance cover payable amounted to US$15,393 (30 June 2011: US$15,621). Directors' fees for the period ended 30 June 2011 included £37,500 payable to the Chairman in respect of identified sale transactions.

 

6              Finance Income

 

	Period ended  30 June 2012 US$'000	Period ended      30 June 2011 US$'000
Interest income on loans to associates (note 9.2)	642	386
Finance lease income (note 20)	1,814	1,933
Interest income	7	47
Finance income	2,463	2,366

 

7              Income Tax Expense

 

Group	Period ended 30 June 2012 US$'000	Period ended 30 June 2011 US$'000
Current tax	51	68
Tax expense	51	68

 

The tax on the Group's profit/(loss) before tax is higher than the standard rate of income tax in the Isle of Man of zero %. The differences are explained below:

 

Group	Period ended 30 June 2012 US$'000	(Represented) Period ended 30 June 2011 US$'000
Profit/(loss) before tax	467	(850)
Tax calculated at domestic tax rates applicable in the Isle of Man (0%)	-	-
Effect of higher tax rates in Mauritius (15%)	51	68
Tax expense	51	68

 

8              Basic and Diluted Loss per Share

 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.

 

	Period ended 30 June 2012	(Represented) Period ended 30 June 2011
Profit/(loss) from continuing operations attributable to equity holders of the Company (US$'000)	416	(918)
Loss from discontinued operations attributable to equity holders of the Company (US$'000)	(2,006)	(884)
Total	(1,590)	(1,802)
Weighted average number of ordinary shares in issue (thousands)	143,745	143,745
Basic profit/(loss) per share (cents) from continuing operations	0.29	(0.64)
Basic loss per share (cents) from discontinued operations	(1.40)	(0.61)
Basic loss per share (cents) from loss for the period	(1.11)	(1.25)

 

There is no difference between basic and diluted Ordinary Shares in issue as the Warrants are not dilutive in 2012 or 2011.

 

 

9              Investments in Subsidiaries and Associates

 

9.1           Investments in Subsidiaries

 

The direct and indirect subsidiaries held by the Company are as follows:

 

	Country of incorporation	Percentage of share held
PME Locomotives (Mauritius) Limited	Mauritius	100%
PME RSACO (Mauritius) Limited	Mauritius	100%
PME Tanco (Mauritius) Limited	Mauritius	100%
PME TZ Property (Mauritius) Limited	Mauritius	100%
PME Uganco (Mauritius) Limited	Mauritius	100%
PME Properties Limited	Tanzania	100%
TMP Uganda Limited *	Uganda	96.8%

* a liquidator was appointed on 19 December 2011

 

In June 2012 the Group disposed of its 65% holding in Dovetel Tanzania Limited for total consideration of US$1. This resulted in a loss on disposal of US$102,556.

 

The Company invested in its direct subsidiaries as follows:

 

	30 June 2012	31 December 2011
	US$'000	US$'000
Start of the period/year	41,473	92,365
Increase in investment	-	-
Return of capital	-	-
Impairment	185	(50,892)
End of the period/year	41,658	41,473

 

9.2           Investments in Associate

 

Group	30 June 2012	31 December 2011
	US$'000	US$'000
Start of the period/year	-	1,227
Foreign exchange loss	-	(109)
Impairment	-	-
Share of loss of associate	-	(1,118)
End of the period/year	-	-

 

The Group's share of the results of its principal associate, which is unlisted, and its share of the aggregate assets (including goodwill) and liabilities, is as follows:

 

Period ended 30 June 2012	Percentage of shares held	Assets	Liabilities	Revenues	Loss
Name		US$'000	US$'000	US$'000	US$'000
Sheltam Holdings	50%	24,887	(24,887)	10,418	-

 

Year ended 31 December 2011	Percentage of shares held	Assets	Liabilities	Revenues	Loss
Name		US$'000	US$'000	US$'000	US$'000
Sheltam Holdings	50%	24,715	(24,715)	16,588	(1,118)

 

The Group's share of losses made by its associate not recognised in the financial statements as the carrying value of the investment is US$nil, is as follows:

 

	30 June 2012	31 December 2011
	US$'000	US$'000
Start of the period/year	3,700	-
Losses for the period/year	851	3,700
End of period/year	4,551	3,700

 

Loans due from associate

	30 June 2012	31 December 2011
	US$'000	US$'000
Start of the period/year	12,947	9,103
Repayment of loans to associate	(97)	-
Increase due to rescheduled debt agreement	1,404	5,254
Interest income (included in finance income)	642	915
Exchange differences	(359)	(2,325)
Loans due from associate	14,537	12,947

 

The loans due from associate are as follows:

 

			30 June 2012
Name	Term	Interest Rate	US$'000
Sheltam Holdings	*	South African Prime	8,212
Sheltam Holdings **	31 March 2012	South African Prime	6,325
			14,537

* shareholder loan repayable to PME RSACO (Mauritius) Limited, unsecured and has no fixed repayment terms.

** rescheduled debt agreement repayable to PME Locomotives (Mauritius) Limited in relation to the finance lease arrears amounts to 30 June 2011 plus lease payments outstanding up to 31 March 2012. 

 

The fair value of these loans approximates their carrying value.

 

10            Intangible assets

 

Group		Goodwill	Telecommunication licences	Software licences	Total
Cost		US$'000	US$'000	US$'000	US$'000
At 1 January & 30 June 2012		-	-	-	-
Amortisation
At 1 January & 30 June 2012		-	-	-	-
Net book value
At 30 June 2012		-	-	-	-

 

Group		Goodwill	Telecommunication licences	Software licences	Total
Cost		US$'000	US$'000	US$'000	US$'000
At 1 January 2011		1,415	870	784	3,069
Reallocated to disposal group classified as held for sale (note 15)		(1,329)	(769)	(746)	(2,844)
Reallocated due to loss of control *		-	(57)	-	(57)
Exchange differences		(86)	(44)	(38)	(168)
At 31 December 2011		-	-	-	-
Amortisation
At 1 January 2011		-	(116)	(209)	(325)
Reallocated to disposal group classified as held for sale (note 15)		-	105	199	304
Reallocated due to loss of control *		-	5	-	5
Exchange differences		-	6	10	16
At 31 December 2011		-	-	-	-
Net book value
At 31 December 2011		-	-	-	-

* loss of control was due to the appointment of a liquidator (see note 15)

 

Amortisation of licences is calculated using the straight-line method to allocate the cost of licences over their estimated useful lives. The useful lives and renewal periods of licences are determined primarily with reference to the unexpired licence period.

 

11            Property, Plant and Equipment

 

Group	Properties	Capital  WIP	Network Infrastructure & Equipment	Other	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Cost
At 1 January 2012	-	-	-	86	86
Additions	-	-	-	-	-
At 30 June 2012	-	-	-	86	86
Accumulated depreciation
At 1 January 2012	-	-	-	(57)	(57)
Charge for the period	-	-	-	(8)	(8)
At 30 June 2012				(65)	(65)
Net Book Value
At 30 June 2012	-	-	-	21	21

 

 

Group	Properties	Capital  WIP	Network Infrastructure & Equipment	Other	Total
	US$'000	US$'000	US$'000	US$'000	US$'000
Cost
At 1 January 2011	2,579	340	14,517	1,973	19,409
Reclassification of WIP	-	(324)	324	-	-
Reallocated to disposal group classified as held for sale (note 15)	(2,453)	-	(11,045)	(1,262)	(14,760)
Reallocated due to loss of control *	-	-	(3,024)	(521)	(3,545)
Exchange differences	(126)	(16)	(772)	(104)	(1,018)
At 31 December 2011	-	-	-	86	86
Accumulated depreciation
At 1 January 2011	-	-	(3,314)	(577)	(3,891)
Reallocated to disposal group classified as held for sale (note 15)	-	-	2,576	340	2,916
Reallocated due to loss of control *	-	-	573	165	738
Charge for the year	-	-	-	(17)	(17)
Exchange differences	-	-	165	32	197
At 31 December 2011	-	-	-	(57)	(57)
Net Book Value
At 31 December 2011	-	-	-	29	29

* loss of control was due to the appointment of a liquidator (see note 15)

 

12            Finance Lease Receivables

 

Group	30 June 2012 US$'000	31 December 2011 US$'000
Amounts receivable under finance leases:
Within one year	6,132	6,149
In the second to fifth years inclusive	24,545	24,545
Beyond five years	10,349	13,389
	41,026	44,083
Less: unearned finance income	(15,379)	(17,192)
Present value of minimum lease payments receivable	25,647	26,891

 

The present value of the lease payments is receivable as follows:

 

	30 June 2012 US$'000	31 December 2011 US$'000
Within one year	2,716	2,574
After one year	22,931	24,317
	25,647	26,891

 

The Group has entered into finance leasing arrangements with Sheltam Holdings (Pty) Limited, an associated company, for twelve locomotives (six in December 2008 and another six in June 2009). The average term of finance leases entered into is ten years. The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate contracted approximates to 16.30% (2011: 16.30%). The fair value of the Group's finance lease receivables at 30 June 2012 is estimated at US$25,647,039 (31 December 2011: US$26,890,605). The lease receivables are secured on the related assets.

 

13            Trade and Other Receivables

 

Group	30 June 2012 US$'000	31 December 2011 US$'000
Receivables due from associate company	75	77
Prepayments	100	142
Trade and other receivables	175	219

 

Company	30 June 2012 US$'000	31 December 2011 US$'000
Loans and receivables due from subsidiary companies
Start of the period/year	48	10,182
Payment of loan and receivables	72	4,886
Impairment of loans and receivables	(309)	(15,448)
Interest income	244	404
Expense recharges	41	24
End of period/year	96	48

 

A total of US$21,200 was drawn down by PME Tanco during the six months ended 30 June 2012 in respect of its intercompany loan facility provided by the Company. Interest of US$123,288 was accrued on this facility over the period. The balance at 30 June 2012 has been impaired by US$140,458.

 

A total of US$9,400 was drawn down by PME Uganco during the six months ended 30 June 2012 in respect of its intercompany loan facility provided by the Company. Interest of US$120,414 was accrued on this facility over the period. The balance at 30 June 2012 has been impaired by US$127,733.

 

Both loan facilities bear interest at the US prime rate, are unsecured and repayable on demand.

 

PME TZ Property and PME RSACO were lent US$14,000 and US$27,800 respectively to cover operational expenditure. These balances are interest free, unsecured and repayable on demand.

 

Company	30 June 2012 US$'000	31 December 2011 US$'000
Receivables due from associate company
Start of the period/year	77	86
Expense recharges	-	7
Exchange differences	(2)	(16)
End of the period/year	75	77
Prepayments	73	133
Sundry debtors	-	-
Trade and other receivables	73	133

 

14            Cash and Cash Equivalents

 

Group	30 June 2012 US$'000	31 December 2011 US$'000
Bank balances	2,673	1,657
Deposit balances	10,257	11,523
Cash and cash equivalents	12,930	13,180

 

Company	30 June 2012 US$'000	31 December 2011 US$'000
Bank balances	28	52
Deposit balances	10,257	11,523
Cash and cash equivalents	10,285	11,575

 

15            Non-Current Assets Held for Sale and Discontinued Operations

 

The assets and liabilities of PME Tanco (Mauritius) Limited, Dovetel Tanzania Limited, PME TZ Property (Mauritius) Limited and PME Properties Limited have been presented as held for sale following the approval by the Group's management to sell or close these companies. The results for these companies are therefore included under discontinued operations.

 

Additionally, TMP Uganda appointed a liquidator on 19 December 2011 and its results are therefore also included under discontinued operations.

 

On 25 June 2012 the Company received written approval from the High Court for the sale of PME's shareholding in Dovetel Tanzania Limited for a nominal consideration of US$1 in cash. Following the sale which completed 28 June 2012, the Company had no further funding requirements or obligations with regard to Dovetel.

 

Group	30 June 2012 US$'000	30 June 2011 US$'000
Operating cash flows	(170)	-
Investing cash flows	3	-
Financing cash flows	-	-
Total cash flows	(167)	-

 

(a) Assets of disposal group classified as held for sale

 

Group	30 June 2012 US$'000	31 December 2011 US$'000
Intangible assets	-	1,028
Property, plant and equipment	5,001	12,348
Inventory	-	319
Other current assets	916	2,290
	5,917	15,985
Impair to realisable value	-	(2,854)
Total	5,917	13,131

 

 

(b) Liabilities of disposal group classified as held for sale

 

Group	30 June 2012 US$'000	31 December 2011 US$'000
Trade and other payables	-	849
ZTE loan	-	6,710
Other current liabilities	1,036	1,013
Total	1,036	8,572

 

ZTE Corporation of China was the supplier of the core network equipment to Dovetel. The loans were unsecured and interest free.

 

(c) Cumulative income or expense recognised in other comprehensive income relating to disposal group classified as held for sale

 

Group	30 June 2012 US$'000	30 June 2011 US$'000
Foreign exchange translation adjustments	2,251	(850)
Total	2,251	(850)

 

Analysis of the result of discontinued operations, and the result recognised on the re-measurement of assets of disposal group, is as follows:

 

Group	30 June 2012 US$'000	30 June 2011 US$'000
Revenue - rental income	381	223
Revenue - telecommunications	832	1,508
Realised losses on sale of property, plant & equipment	-	(53)
Operating and administration expenses (see below)	(3,792)	(7,647)
Foreign exchange (loss)/gain	(2,103)	1
Loss on disposal of subsidiary (see note 21)	(103)	-
Release of impairment of assets to realisable value	2,854	-
Loss before tax of discontinued operations	(1,931)	(5,968)
Tax	(20)	-
Total	(1,951)	(5,968)

 

Group	30 June 2012 US$'000	30 June 2011 US$'000
Loss for the period from discontinued operations
- Owners of the parent	(2,006)	(884)
- Non-controlling interests	55	(5,084)
	(1,951)	(5,968)