RNS Number : 0545P
PME African Infrastructure Opps PLC
27 September 2013
 



27 September 2013

 

PME African Infrastructure Opportunities plc

 

("PME" or the "Company")

 

(AIM: PMEA.L)

 

Interim Results for the six months ended 30 June 2013

 

PME African Infrastructure Opportunities plc, an investment company established to invest in sub-Saharan African infrastructure and infrastructure related industries, announces its unaudited results for the six months ended 30 June 2013.

 

Financial Summary  

 

•    US$8.7 million of cash on the balance sheet

 

•    Net Asset Value of US$38.4 million (31 December 2012: US$39.5m)

 

•    NAV per share of US$0.37 (31 December 2012: US$0.39)

 

•    Operating profit attributable to shareholders for the period ended 30 June 2013 was US$0.1 million (2012: loss of US$1.6 million)

 

•    Basic and diluted profit per share of US$0.09 (2012: loss per share of US$1.11)

 

•    Basic and diluted loss per share from continuing operations of US$0.73 (2012: US$0.92)

 

Operational Summary

 

•    The Company continues to work towards the realisation of its investments, return cash to shareholders and then effect a voluntary winding up

 

•    Efforts to sell the Rail Assets have not been successful to date and the Directors are considering a reorganisation of the Rail Assets to facilitate a sale

 

•    Peninsula House in Dar-es-Salaam continues to be fully let and a local agent has been appointed to sell the business

 

•    The Rail Assets continue to perform and operate profitably

 

With effect from 30 September 2013, the Company will fall within the regulation of the UK's Takeover Code.

 

 

For further information please contact:

 

Smith & Williamson Corporate Finance Limited

 

Azhic Basirov / Siobhan Sergeant

+44 20 7131 4000

Oriel Securities Limited

Neil Winward

+44 20 7710 7600




 

 

Chairman's 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 ended 30 June 2013.

 

Investments and Valuations

 

The Company currently owns rail assets in South Africa (10 mainline locomotives and 50% of Sheltam Holdings (Pty) Limited ("Sheltam") and its subsidiaries, the group to which these locomotives are leased) (the "Rail Assets") and commercial premises in Dar-es-Salaam, Tanzania (the "Dar-es-Salaam property"). As previously announced, the Company intends to realise its investments, return cash to shareholders and then effect a voluntary winding up.

 

The Rail Assets have continued to perform and operate profitably. There has been a weakening in demand for locomotives but at the same time there are a number of enquiries that bode well for the future. The two C30 locomotives that were involved in an accident in Mozambique were the subject of an insurance claim. Sheltam agreed a settlement of ZAR 40.25m for the two locomotives involved in the accident. This settlement amount included VAT and the Company received the net amount of ZAR 35.3m on 30 May 2013.

 

In September 2012, PSG Capital (Pty) Limited ("PSG Capital") was appointed to assist the Company with the disposal of the Rail Assets. PSG Capital subsequently prepared a high level valuation of the Rail Assets and initiated a sale process on behalf of the Company. A number of potential bidders were approached and a number of parties submitted preliminary non-binding expressions of interest in the Rail Assets. Unfortunately it has not been possible to reach agreement with any of the potential bidders at a level which the Directors consider acceptable.

 

In order to address some of the issues that arose during the sale negotiations, the Board is investigating a reorganisation of the Rail Assets which would result in additional cash being released for PME shareholders early next year and also assist in finding a buyer for the PME shareholding in Sheltam.  In addition, and in the meantime, Sheltam continues to trade profitably and we expect the Sheltam investment to continue to provide cash flow to PME through its lease obligations.  The Directors will continue to consider any reasonable bid for the Rail Assets that comes along.

 

The Dar-es-Salaam property, which is managed by a local managing agent, is fully let and is trading profitably. The person and company that acquired Dovetel, the Company's former telecommunication interest in Tanzania, have registered a caveat on the building on 10 June 2013, requiring their consent prior to any sale of the building. This caveat was accepted by the Land Registry in spite of the terms of the share purchase agreement of Dovetel under which all rights to the building were waived. Dovetel also continues to rent a part of the Dar-es-Salaam property but unfortunately has not been paying its rent. PME is in the process of applying for leave of the court to evict Dovetel and to have the caveat removed. A local agent has been appointed to sell the building and has attracted some good interest to date.

 

As part of the sale agreement in respect of PME's former holding in Dovetel, Dovetel owes PME approximately US$245K.  In addition, as set out above, Dovetel is in arrears on its rental payments in respect its tenancy of part of the Dar-es-Salaam property.  PME accordingly served a winding-up petition on Dovetel as a result of which Dovetel was once again placed into administration in late April 2013. On 15 May 2013, PME's winding up petition was stayed pending appeals against the administration order. PME will continue to press for a repayment of its debts through the winding-up petition alongside the eviction process set out above.  The Directors do not anticipate that there will be any financial implications for the Company other than the necessary legal and court costs to protect PME's interest.

 

The executive Directors of the Company are overseeing the operational aspects of the investments and are managing the disposal programme. They are being supported by local personnel who are operating on a short term contractual basis.

 

Financial Results

 

The profit attributable to ordinary shareholders for the six months ended 30 June 2013 was US$0.1 million (2012: loss US$1.6 million), representing US$0.09 per Ordinary Share (2012: loss per share US$1.11).

 

The Directors have considered the valuation of assets and, based on recent negotiations, are of the opinion that the Rail Assets and the Dar-es-Salaam property are reflected in the balance sheet at realistic values.  Accordingly neither of the assets has been impaired.

 

As at 30 June 2013, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$38.4 million (US$0.37 per share), 2.8% down from the US$39.5 million (US$0.39 per share) that was reported as at 31 December 2012.

 

Return of Cash and Outlook

 

Last year the Company made an offer to acquire 30% of its issued ordinary share capital at a price of US$0.30 per share. 41,283,992 ordinary shares, comprising 28.72% of the Company's issued ordinary share capital, were tendered and redeemed on 31 October 2012. The Company returned US$12.4 million to shareholders through the share buyback.

 

The remaining investments are performing profitably. The Company's cash balances increased to US$8.7m as at 30 June 2013. However, the Company has not been able to find a buyer for the Rail Assets. It is anticipated that a reorganisation at Sheltam will result in additional cash being released for PME shareholders early next year.  There is good interest in the property in Dar-es-Salaam, which is in a prime location in the City, and the action being taken in the Courts should enhance the realisable value of the property.

 

Pending any further realisations, the Directors are proposing to return the Company's excess cash to shareholders by way of a further tender offer later this year and the Company expects to make an announcement shortly. Provided the Company is successful in its endeavours to reorganise Sheltam and to sell the building in Dar-es-Salaam, the Directors are hopeful a further distribution may take place in the first half of 2014. 

 

Takeover Code

 

The Panel on Takeovers and Mergers (the "Panel") is an independent body, whose main functions are to issue and administer the City Code on Takeovers and Mergers (the "Takeover Code") and to supervise and regulate takeovers and other matters to which the Takeover Code applies. Its self-stated objective is to ensure fair treatment for all shareholders in takeover bids. Following the implementation of the Takeovers Directive (2004/25/EC) by means of Part 28 of the United Kingdom Companies Act 2006, the rules set out have a statutory basis in the United Kingdom.

 

The Panel will from 30 September 2013 widen the categories of companies it regulates by, inter alia, partially removing the residency test for companies admitted to trading on AIM which have their registered offices in the UK, the Channel Islands or the Isle of Man in respect of the Takeover Code. This is a significant change since AIM quoted companies with registered offices in the Isle of Man will now automatically fall within the regulation of the Takeover Code. As a result, the Company will fall within the regulation of the Takeover Code from 30 September 2013.

 

I welcome this change as it will offer more protection to the Company's shareholders on a consistent basis.

 

 

Paul Macdonald

Chairman

26 September 2013

 

 

Consolidated Income Statement

 



 

(Unaudited)
Period from 1 January 2013 to 30 June 2013

(Represented)

(Unaudited)
Period from 1 January 2012 to 30 June 2012


Note

US$'000

US$'000

Continuing operations




Revenue


-

-





Investment manager's fees

5

193

(357)

Operating and administration expenses

6

(1,159)

(911)

Foreign exchange loss


(5)

(12)

Operating loss


(971)

(1,280)





Finance income

7

2

7

Loss before income tax


(969)

(1,273)





Income tax

8

(29)

(51)

Loss for the period from continuing operations


(998)

(1,324)

Discontinued operations




Profit/(loss) for the period from discontinued operations

15

1,132

(211)

Profit/(loss) for the period


134

(1,535)





Profit/(loss) attributable to:




Owners of the parent


134

(1,590)

Non-controlling interests


-

55



134

(1,535)

Basic and diluted profit/(loss) per share (cents) from continuing and discontinued operations attributable to the equity holders of the Company during the period




From continuing operations

9

(0.73)

(0.92)

From discontinued operations

9

0.82

(0.19)

Profit/(loss) for the period

9

0.09

(1.11)

 

 

Consolidated Statement of Comprehensive Income



 

(Unaudited)
Period from 1 January 2013 to 30 June 2013

(Represented)

(Unaudited)
Period from 1 January 2012 to 30 June 2012



US$'000

US$'000





Profit/(loss) for the period


134

(1,535)

Other comprehensive (expense)/income

Items that may be reclassified subsequently to profit or loss:




Foreign exchange translation differences - continuing operations


(1,274)

47

Foreign exchange translation differences - discontinued operations


-

2,048

Other comprehensive (expense)/income for the period that may be reclassified to profit or loss


(1,274)

2,095





Total comprehensive (expense)/income for the period


(1,140)

560





Total comprehensive (expense)/income attributable to:




- Owners of the parent


(1,140)

505

- Non-controlling interests


-

55



(1,140)

560

Total comprehensive (expense)/income attributable to equity shareholders arises from:




- Continuing operations


4,052

260

- Discontinued operations


(2,912)

245



(1,140)

505

 

 

Consolidated Balance Sheet


Note

(Unaudited)
As at 30 June 2013

(Audited)
As at 31 December 2012



US$'000

US$'000

Assets




Current assets




Trade and other receivables

13

202

221

Cash and cash equivalents

14

8,734

3,695



8,936

3,916

Assets of disposal group classified as held for sale

15

30,587

36,624

Total current assets


39,523

40,540

Total assets


39,523

40,540

Equity and liabilities




Equity attributable to owners of the parent:




Issued share capital

16

1,025

1,025

Foreign currency translation reserve


(2,695)

(1,421)

Capital redemption reserve


780

780

Retained earnings


39,292

39,158



38,402

39,542

Non-controlling interests


-

-

Total equity


38,402

39,542

Current liabilities




Trade and other payables

18

304

287



304

287

Liabilities of disposal group classified as held for sale

15

817

711

Total current liabilities


1,121

998

Total liabilities


1,121

998

Total equity and liabilities


39,523

40,540

 

 

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 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

 

 

Balance at 1 January 2013

1,025

(1,421)

780

39,158

39,542

-

39,542

Comprehensive income








Profit for the period

-

-

-

134

134

-

134

Other comprehensive income








Foreign exchange translation differences

-

(1,274)

-

-

(1,274)

-

(1,274)

Total comprehensive loss for the period

-

(1,274)

-

134

(1,140)

-

(1,140)

Transactions with owners








Non-controlling interest settled on disposal

-

-

-

-

-

-

-

Total transactions with owners

-

-

-

-

-

-

-

Balance at 30 June 2013

1,025

(2,695)

780

39,292

38,402

-

38,402

 

 

Consolidated Cash Flow Statement


Note

(Unaudited)
Period from 1 January
2013 to 30 June 2013

(Unaudited)
Period from 1 January 2012 to 30 June 2012



US$'000

US$'000

Operating activities




Profit(loss) for the period before income tax including discontinued operations


146

(1,464)

Adjustments for:




  Finance income


(2,244)

(2,463)

  Depreciation and amortisation


8

1,173

  Loss on disposal of subsidiary


-

103

  Foreign exchange loss


1,224

2,822

Operating (loss)/profit before changes in working capital


(866)

171

Increase in inventory


-

(2,580)

Decrease in trade and other receivables


-

47

Increase in trade and other payables


4,024

1,024

Cash generated by/used in operations

3,158

(1,338)

Income tax paid


(58)

(84)

Interest received


163

104

Lease rental income received


2,033

1,025

Net cash generated by/used in operating activities


5,296

(293)

Investing activities




Net cash movement on disposal of subsidiary

21

-

(32)

Loan to associate

10.2

(36)

-

Net cash used in investing activities


(36)

(32)





Net increase/(decrease) in cash and cash equivalents


5,260

(325)

Cash and cash equivalents at beginning of period


3,695

13,180

Foreign exchange (losses)/gains on cash and cash equivalents


(221)

75

Cash and cash equivalents at end of period

14

8,734

12,930

 

 

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 Loss

The amount of the Company's loss for the period recognised in the Consolidated Income Statement is US$18,232,651 after impairment of intercompany balances amounting to US$nil and release of impairment to its investment in subsidiaries amounting to US$nil (period ended 30 June 2012: loss 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).

 

Going concern

In assessing the going concern basis of preparation of the interim financial statements for the period ended 30 June 2013, the Directors have taken into account the status of current negotiations on the realisation of the remaining assets. The Directors consider that the Group has sufficient facilities for its ongoing operations and therefore have continued to adopt the going concern basis in preparing these interim financial statements.

 

2          Summary of Significant Accounting Policies

 

2.1        Basis of preparation

 

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 2012, except as described below.

 

-     The Group has adopted IFRS 13 'Fair Value Measurement'.  IFRS 13 measurement and disclosure requirements are applicable for the 31 December 2013 year end.  The Group has included the disclosures required by IAS 34 paragraph 16A(j) in note 3.

-     The Group has also adopted the amendment to IAS 1 'Presentation of Financial Statements' issued in June 2011, requiring items recognised outside profit or loss in other comprehensive income to be grouped according to whether they may subsequently be reclassifiable to profit or loss.

 

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 2012, 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 2013 are unaudited. The comparative interim figures for the six months ended 30 June 2012 are also unaudited.

 

2.2        Critical accounting estimates

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are addressed below:

 

Loan to Associate

The Group tests semi-annually whether the investment and loans to its associate have suffered any impairment. In assessing this, the Group determines the recoverable amount of the CGU determined based on discounted cash flows. The Group also takes into account the associate's (see note 10) progress compared to its business plan.  In addition, the Directors have considered the valuation of the associate as at 30 June 2013 and have concluded there are no indicators of impairment in the period to 30 June 2013 (year to 31 December 2012: impairment of US$7,064,424) with respect to its loans to associate (see note 15).

 

3          Risk Management

 

The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The financial risks relate to the following financial instruments: loans and receivables, cash and cash equivalents and trade and other payables.  There has been no material change in the market, credit or liquidity risk profile since the year ended 31 December 2012.

 

There have been no changes in risk management policies or responsibilities since the year end.  Risk management was carried out by the Investment Manager until its termination on 6 July 2012, under policies approved by the Board of Directors. The risk management is now being carried out by the executive Directors.

 

These interim financial statements do not include all financial risk management information and disclosures 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 2012.

 

The fair value of trade and other receivables, cash and cash equivalents and trade and other payables (including those within the held-for-sale disposal group) are considered to approximate their carrying amounts.

 

4          Segment Information

 

Until July 2012, the chief operating decision-makers were identified as the Board of Directors and the Investment Manager.  After this time, the Board of Directors assumed the responsibilities of the Investment Manager and the Board has undertaken all operating decisions since then.  The Board reviews the Group's internal reporting in order to assess performance and allocate resources. The Board has determined the operating segments based on these reports. The Board considers 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 2013

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

-

-

-

-

-

2

2

Depreciation and amortisation - discontinued

-

-

-

-

-

-

-

Profit/(loss) for the period from continuing operations

-

-

(25)

(841)

(193)

83

(976)

Profit/(loss) for the period from discontinued operations

-

-

324

692

116

-

1,132

Segment assets

-

-

3,982

28,618

4,615

2,308

39,523

Segment liabilities

-

-

(18)

(18)

(817)

(268)

(1,121)

 

* Other refers to income and expenses of the Group not specific to any specific sector such as income on un-invested funds. Other assets comprise cash and cash equivalents of US$2,158,088 (note 14) and other assets US$150,219.

 

Six months ended

30 June 2012 (represented)

 

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

-

-

-

-

-

7

7

Depreciation and amortisation - discontinued

(1,165)

-

-

(8)

-

-

(1,173)

Profit/(loss) for the period from continuing operations

-

(7)

(26)

(61)

-

(1,230)

(1,324)

Profit/(loss) for the period from discontinued operations

(2,175)

-

368

1,372

169

-

(266)

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 of US$10,285,334 and other assets US$148,746.

 

The total of non-current assets other than financial instruments and deferred tax assets is US$nil (30 June 2012: US$20,605) and all of these were located in Mauritius.

 

5          Investment Manager's Fees

 

Annual fees

The Investment Manager received 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 was 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 were paid together with any value added tax, if applicable. During the period ended 30 June 2013 the Group received a refund of management fees previously incurred, amounting to US$193,339 (30 June 2012: charge of US$357,326).

 

Performance fees

The Investment Manager was 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 was passed if the Company or any subsidiary had 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.

 

At the end of each financial year (or at date of termination) 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 2013 amounted to US$nil (30 June 2012: US$nil).

 

6          Operating and Administration Expenses

 


 Period ended
30 June 2013

US$'000

(Represented)

Period ended
30 June 2012

US$'000

Administration expenses

94

83

Administrator and Registrar fees (note 20)

89

70

Audit fees

82

82

Directors' fees

154

121

Professional fees

667

423

Travel

4

8

Other

69

124

Operating and administration expenses

1,159

911

 

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 million 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 2013 amounted to US$52,507 (30 June 2012: US$42,955).

 

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, 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 is charged. The fees payable by the Company for general secretarial services for the period ended 30 June 2013 amounted to US$4,612 (30 June 2012: US$11,534).

 

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 2013 amounted to US$34,864 (30 June 2012: US$26,932). 

 

Directors' Remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Non-executive 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 Directors are entitled to receive an annual fee of £30,000 each and the Non-executive Chairman £35,000. At the time of termination of the Investment Manager three of the directors became Executive Directors: David von Simson, Paul Macdonald and Lawrence Kearns.

 

The Executive Directors are entitled to receive annual basic salaries of £75,000.

 

Total fees and basic remuneration (including VAT where applicable) and expenses payable by the Company for the year ended 31 December 2012 amounted to US$373,459 (31 December 2011: US$219,393) and was split as below. 

 


Period ended
30 June 2013

US$'000

Period ended
30 June 2012

US$'000

David von Simson*

-

27

Paul Macdonald

60

23

Lawrence Kearns

61

23

Graca Machel

23

23

Expense reimbursement

10

25


154

121

* David von Simson died on 11 November 2012

 

7          Finance Income


 

Period ended
30 June 2013 US$'000

(Represented)

Period ended
30 June 2012 US$'000

Interest income

2

7

Finance income

2

7

 

8          Income Tax Expense

 

Group

Period ended
30 June 2013 US$'000

Period ended
30 June 2012 US$'000

Current tax

29

51

Tax expense

29

51

 

The tax on the Group's result 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 2013 US$'000

(Represented)

Period ended
30 June 2012 US$'000

Loss before tax

(969)

(1,273)




Tax calculated at domestic tax rates applicable in the Isle of Man (0%)

-

-

Effect of higher tax rates in Mauritius (15%)

29

51

Tax expense

29

51

 

9          Basic and Diluted Profit/(Loss) per Share

 

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

 


 

Period ended

30 June 2013

(Represented)

Period ended
30 June 2012




Loss from continuing operations attributable to equity holders of the Company (US$'000)

(998)

(1,324)

Profit/(loss) from discontinued operations attributable to equity holders of the Company (US$'000)

1,132

(266)

Total

134

(1,590)

Weighted average number of ordinary shares in issue (thousands)

136,751

143,745

Basic loss per share (cents) from continuing operations

(0.73)

(0.92)

Basic profit/(loss) per share (cents) from discontinued operations

0.82

(0.19)

Basic profit/(loss) per share (cents) from loss for the period

0.09

(1.11)

 

There is no difference between basic and diluted Ordinary Shares in issue as the Warrants are not dilutive in 2013 or 2012.

 

10         Investments in Subsidiaries and Associates

 

10.1      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%

* a liquidator was appointed in May 2013

 

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 (see note 21).

 

The Company invested in its direct subsidiaries as follows:

 


30 June 2013

31 December 2012


US$'000

US$'000

Start of the period/year

34,707

41,473

Impairment

(18,500)

(6,766)

End of the period/year

16,207

34,707

 

10.2      Investments in Associate

 

Group

30 June 2013

 31 December 2012


US$'000

US$'000

Start of the period/year

-

-

End of the period/year

-

-

 

Loans due from associate


30 June 2013

31 December 2012


US$'000

US$'000

Start of the year

-

12,947

Increase due to rescheduled debt agreement

-

1,564

Interest income (included in finance income) (note 15(c))

-

1,232

Transfer to assets held for sale (note 15(a))

-

(7,983)

Impairment provision

-

(7,064)

Exchange differences

-

(696)

Loans due from associate

-

-

 

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 2013

-

-

-

-

-

At 30 June 2013

-

-

-

-

-

Accumulated depreciation






At 1 January 2013

-

-

-

-

-

At 30 June 2013

-

-

-

-

-

Net Book Value






At 30 June 2013

-

-

-

-

-

 

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

Reallocated to disposal group classified as held for sale (note 15)

-

-

-

(86)

(86)

At 31 December 2012

-

-

-

-

-

Accumulated depreciation






At 1 January 2012

-

-

-

(57)

(57)

Reallocated to disposal group classified as held for sale (note 15)

-

-

-

57

57

At 31 December 2012

-

-

-

-

-

Net Book Value






At 31 December 2012

-

-

-

-

-

 

12         Finance Lease Receivables

 

The Group 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). During the year to 31 December 2012 two of the leased locomotives were damaged in an incident when they collided with each other.  During the period to 30 June 2013 the insurers agreed to write off the damaged locomotives and have paid out an amount of ZAR 35.3m (US$ 3.9m) in full and final settlement.

 

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% (2012: 16.30%). The lease receivables are secured on the related assets.

 

The finance lease receivables were transferred to assets held for sale in 2012 (note 15).

 

13         Trade and Other Receivables

 

Group

30 June 2013

US$'000

31 December 2012

US$'000




Receivables due from associate company

121

85

Prepayments

47

117

Sundry debtors

34

19

Trade and other receivables

202

221

 

Company

30 June 2013

US$'000

31 December 2012

US$'000

Loans and receivables due from subsidiary companies



Start of the period/year (net of impairment)

75

48

Payment of loan and receivables

40

71

Impairment of loans and receivables

-

(332)

Interest income

127

248

Expense recharges

-

40

End of period/year

242

75

 

A total of US$9,400 was drawn down by PME Tanco during the six months ended 30 June 2013 (six months ended 30 June 2012: US$21,200) in respect of its intercompany loan facility provided by the Company. Interest of US$126,965 was accrued on this facility over the period (period to 30 June 2012: US$123,288). The balance at 30 June 2013 has been impaired by US$nil (at 30 June 2012: US$140,458).  The loan facility bears interest at the US prime rate, is unsecured and repayable on demand.

 

A total of US$nil was drawn down by PME Uganco during the six months ended 30 June 2013 (six months ended 30 June 2012: US$9,400) in respect of its intercompany loan facility provided by the Company. Interest of US$nil was accrued on this facility over the period (period to 30 June 2012: US$120,414) as the balance was fully written off during the year to 31 December 2012 due to PME Uganco being placed in administration. The balance at 30 June 2013 has been impaired by US$nil (at 30 June 2012: US$127,733).

 

PME TZ Property and PME RSACO were lent US$nil and US$30,946 respectively during the six months ended 30 June 2013 to cover operational expenditure. These subsidiary balances are interest free, unsecured and repayable on demand.

 

Company

30 June 2013

US$'000

31 December 2012

US$'000

Receivables due from associate company



Start of the period/year

85

77

Expense recharges

40

11

Exchange differences

(8)

(3)

End of the period/year

117

85




Prepayments

30

104

Trade and other receivables

30

104

 

14         Cash and Cash Equivalents

 

Group

30 June 2013

US$'000

31 December 2012

US$'000




Bank balances

8,734

3,695

Cash and cash equivalents

8,734

3,695

 

Company

30 June 2013

US$'000

31 December 2012

US$'000




Bank balances

2,158

1,929

Cash and cash equivalents

2,158

1,929

 

15         Non-Current Assets Held for Sale and Discontinued Operations

 

The property and associated liabilities of PME Properties Limited, the investment in associate and loan to associate of PME RSACO (Mauritius) Limited and the finance lease and loan to associate of PME Locomotives (Mauritius) Limited have been presented as held for sale at 30 June 2013 and 31 December 2012 following the approval by the Board to sell or close these assets/companies. The results associated with these assets and for these companies are therefore included under discontinued operations (six months ended 30 June 2012: the results of PME Tanco (Mauritius) Limited, Dovetel Tanzania Limited and PME TZ Property (Mauritius) Limited in addition to the above).

 

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 on 28 June 2012, the Company had no further funding requirements or obligations with regard to Dovetel.

 

Group

30 June 2013

US$'000

30 June 2012

US$'000




Operating cash flows

306

(170)

Investing cash flows

-

3

Financing cash flows

-

-

Total cash flows

306

(167)

 

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

 

Group

30 June 2013

US$'000

31 December 2012

US$'000




Loans due from associate

6,946

7,983

Property, plant and equipment

4,193

4,282

Finance lease receivables

19,406

24,317

Other current assets

42

42

Total

30,587

36,624

 

The Group owns 50% of the ordinary share capital in its associate, Sheltam Holdings (Pty) Limited, which is unlisted.

 

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

 

Group

30 June 2013

US$'000

31 December 2012

US$'000




Other current liabilities

817

711

Total

817

711

 

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

 

Group

30 June 2013

US$'000

30 June 2012

US$'000




Foreign exchange translation adjustments

-

2,251

Total

-

2,251

 

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 2013

US$'000

(Represented)

30 June 2012

US$'000




Revenue - rental income

362

381

Revenue - telecommunications

-

832

Realised gains on sale of property, plant & equipment

116

-

Operating and administration expenses (see below)

(271)

(3,801)

Foreign exchange (loss)/gain

(1,220)

(708)

Interest income on loans to associate

565

642

Finance lease income

1,563

1,814

Loss on disposal of subsidiary (see note 21)

-

(103)

Release of impairment of assets to realisable value

-

752

Loss before tax of discontinued operations

1,115

(191)

Tax

17

(20)

Total

1,132

(211)

 

Group

30 June 2013

US$'000

30 June 2012

US$'000

Profit/(loss) for the period from discontinued operations



- Owners of the parent

1,132

(2,006)

- Non-controlling interests

-

55


1,132

(1,951)

 

 

(d)        Operating and administration expenses


 Period ended
30 June 2013

US$'000

Period ended
30 June 2012

US$'000

Administration expenses

-

1

Administrator and Registrar fees (note 20)

-

11

Amortisation of intangible assets

-

92

Audit fees

-

17

Bad debt expense

85

-

Depreciation

8

1,082

Employee costs

-

732

Retirement benefits

-

47

Management fees - TMP (note 20)

-

(3)

Management fees - other

-

2

Marketing costs

-

305

Network and direct costs

-

1,172

Professional fees

2

123

Property and utilities

76

116

Travel

-

6

Other

100

98

Operating and administration expenses for discontinued operations

271

3,801

 

16         Share Capital

 

Ordinary Shares of US$0.01 each

31 December 2012 and 30 June 2013

Number

31 December 2012 and 30 June 2013

US$'000

Authorised

500,000,000

5,000

 

C Shares of US$1 each

31 December 2012 and 30 June 2013 Number

31 December 2012 and 30 June 2013 US$'000

Authorised

5,000,000

5,000

Issued

-

-

 

Ordinary Shares of US$0.01 each

30 June 2013
US$'000

31 December 2012 US$'000

102,460,760 (31 December 2012: 102,460,760) Ordinary Shares in issue, with full voting rights

 

1,025

 

1,025


1,025

1,025

 

At incorporation the authorised share capital of the Company was US$10,000,000 divided into 500,000,000 Ordinary Shares of US$0.01 each and 5,000,000 C Shares of US$1.00 each. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

 

The holders of C Shares would be entitled to one vote per share at the meetings of the Company. The C Shares can be converted into Ordinary Shares on the approval of the Directors. On conversion each C share would be sub-divided into 100 C Shares of US$0.01 each and will be automatically converted into New Ordinary Shares of US$0.01 each.

 

On 12 July 2007, the Company raised a gross amount of US$180,450,000 following the admission of the Company's Ordinary Shares to AIM. The Company placed 180,450,000 Ordinary Shares of US$0.01 par value, at an issue price of US$1.00 per share, and 36,090,000 Warrants on a 1 Warrant per 5 Ordinary Shares basis.

 

A registered holder of a Warrant had the right to subscribe for Ordinary Shares of US$0.01 each in the Company in cash on 30 April in any of the years 2008 to 2012 for a price of US$1.21 each (adjusted from US$1.25 effective from 11.59pm on 23 February 2010, and an additional 1,193,042 Warrants were issued). The subscription price was adjusted from US$1.21 to US$1.00 effective from 11.59pm on 21 September 2010, and an additional 7,829,424 Warrants were issued. The subscription price was further adjusted from US$1.00 to US$0.72 effective from 11.59pm on 22 July 2011, and an additional 17,543,718 Warrants were issued taking the total number of Warrants in issue to 62,656,184. The Warrants lapsed in July 2012. No subscription rights were exercised prior to the Warrants lapsing.

 

17         Net Asset Value per Share

 

Group

As at

30 June 2013

As at

31 December 2012




Net assets attributable to equity holders of the Company (US$'000)

38,402

39,542

Shares in issue (thousands)

102,461

102,461

NAV per share (US$)

0.37

0.39

 

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Group by the number of Ordinary Shares in issue.

 

18         Trade and Other Payables

 

Group

30 June 2013

US$'000

31 December 2012

US$'000




Administration fees payable

40

40

Audit fee payable

106

143

CREST service provider fee payable

4

4

Directors' fees payable

25

7

Income tax payable

(40)

26

Other sundry creditors

169

67


304

287

 

Company

30 June 2013

US$'000

31 December 2012

US$'000

Loans and receivables due to subsidiary companies



Start of the period/year

-

-

Expense recharges

-

125

Payment of loans and receivables

-

(125)

End of period/year

-

-

 

PME Locomotives (Mauritius) Limited recharged US$124,841 to the Company during the year to 31 December 2012 which was fully repaid during the year. This balance was interest free, unsecured and repayable on demand.

 

Company

30 June 2013

US$'000

31 December 2012

US$'000




Administration fees payable

22

29

Audit fee payable

65

109

CREST service provider fee payable

4

4

Directors' fees payable

23

7

Other sundry creditors

150

29


264

178

 

The fair value of the above financial liabilities approximates their carrying amounts.

 

19         Contingent Liabilities and Commitments

 

The following guarantees are in place as a result of the acquisition of 50% of the Ordinary Share capital of Sheltam Holdings (Pty) Limited:

 

(i)       FirstRand Bank suretyship in the amount of US$0.7m (ZAR 6m) in connection with a US$1.8m (ZAR 12m) working capital facility.

 

(ii)      Rand Merchant Bank letter of support in the amount of US$0.6m (ZAR 5.5m) in connection with aircraft finance lease obligations.

 

PME Properties Limited has entered into a number of operating lease agreements in respect of properties. The lease terms are between one and ten years and the majority of the lease agreements are renewable at the end of the lease period at market rates.  

 

The Group's future aggregate minimum lease payments under operating leases are as follows:

 


30 June 2013

US$'000

31 December 2012

US$'000

Amounts payable under operating leases:



Within one year

65

65

In the second to fifth years inclusive

198

210

Beyond five years

1,400

1,400


1,663

1,675

 

The Directors do not expect any of these guarantees to result in significant loss to the Group.

 

20         Related Party Transactions

 

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions. Key management is made up of the Board of Directors.

 

Group

Management fees of US$193,339 were refunded by TMP Management A.S. (30 June 2012: US$3,069).

 

Sheltam Holdings (Pty) Limited, an associate, had the following positions/transactions with Group companies:

 

-     The outstanding finance lease liability owing to PME Locomotives (Mauritius) Limited as at 30 June 2013 was US$19,406,344 (31 December 2012: US$24,316,796), see note 12.

-     Net finance lease interest expense due to PME Locomotives (Mauritius) Limited during the period ended 30 June 2013 amounted to US$1,563,186 (period ended 30 June 2012: US$1,814,034).

-     The loans payable to PME RSACO (Mauritius) Limited and PME Locomotives (Mauritius) Limited are disclosed in note 15.

 

The Directors of the Company are considered to be related parties by virtue of their influence over making operational decisions. Directors' remuneration is disclosed in note 6.

 

Lawrence Kearns, a director of the Company, was a non-executive director of the Administrator until 31 July 2012. Fees payable to the Administrator are disclosed in note 6.

 

Company

Intercompany transactions with subsidiaries and associates are disclosed in note 13.

 

21         Loss on Disposal of Subsidiary

 

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 as follows:

 


US$'000

Intangible assets

950

Property, plant & equipment

6,434

Inventory

276

Trade and other receivables

1,247

Cash

32

Trade and other payables

(1,888)

ZTE loan

(6,789)

Other sundry creditors

(104)

Total identifiable net assets

158

Non-controlling interest

(55)

Loss on disposal

103

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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IR DQLFLXKFBBBB