| Thu 12 Jul 2007, 12:33 | | YRK - York - Press Release - York Confirms Landmar |
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YRK
YRK
YRK - York - Press Release - York Confirms Landmark Acquisition Of Global Forest
Products
The York Timber Organisation Limited
(Registration number 1916/004890/06)
Share code: YRK
ISIN: ZAE000008108
("York" or "the Company")
YORK CONFIRMS LANDMARK ACQUISITION OF GLOBAL FOREST PRODUCTS
JSE listed timber company, The York Timber Organisation Limited ("York"), has
confirmed its acquisition of Global Forest Products (Pty) Limited and South
African Plywood (Pty) Limited (collectively referred to as GFP) for a purchase
price of R1.695 billion. The transaction is effective retrospective to 30 June
2007.
GFP is an environmentally sustainable, vertically integrated forestry company,
headquartered in Sabie, managing 56 805 hectares of certified plantation
forests. GFP also owns and operates three large sawmills and a plywood plant.
The GFP yield is between 600 000 m3 and 700 000 m3 of pine logs per annum on a
sustainable basis. The company also has 29 101 hectares of land reserved for
conservation, streams, natural heritage sites, roads and access routes.
Making the announcement, York CEO Lance Cooper said that the company had
acquired the shares in and claims against GFP from Global Environmental Fund and
the IDC in one indivisible transaction, having met all suspensive conditions.
This includes approval by the Competition Authorities and shareholder approval
at a general meeting held on 9 July 2007.
The purchase, which is underpinned by the value of GFP`s forests, is being
effected through a rights offer, debt facilities and a vendor consideration
issue of shares in York to the IDC.
Through the rights offer, R350 million cash will be raised, which is fully
underwritten by York`s controlling shareholder Blackstar Investors plc. Pending
implementation of the rights offer at the beginning of August, money raised
through a specific issue for cash and bridging finance has arranged with Rand
Merchant Bank (RMB) will be utilised to settle the purchase consideration
initially.
The remainder of the cash purchase consideration will be discharged through a
series of loans amounting to approximately R845 million, made available to York
in terms of agreements with RMB.
Some R350 million of the IDC aggregate interest of approximately R500 million in
GFP will be settled by way of a vendor consideration issue of York ordinary
shares at R15.00 a share, after completion of the rights offer. The remaining
R150 million of the IDC interest is specifically earmarked to enhance the broad-
based BEE and staff participation in the enlarged York group. The specific
purpose of the BEE and staff transaction will be the upliftment of communities
in the geographic areas in which York and GFP operate.
Commenting on the acquisition, Cooper says that it will result in York boosting
its forestry ownership to levels at which more than 70% of the enlarged group`s
forecast sawmill log input will be internally generated. "This is in line with
York`s strategy to secure the supply of its timber on a long term, sustainable
basis and, more importantly, at competitive input prices," he notes.
The impact of the input cost saving between the spot price and York`s own supply
through GFP and its existing plantations, is expected to enhance the company`s
earnings.
In addition, Cooper says York`s management expects that log recoveries and
efficiencies historically achieved by GFP will be improved to approach levels
currently attained by York`s sawmills. "This should result in further earnings
growth not currently derived by GFP on a stand-alone basis," he says.
"The acquisition will materially enhance York`s saw milling capacity, securing
its position as an important domestic forestry resource company, capable of
supplying a buoyant market that continues to be fuelled by unprecedented
infrastructure and construction growth rates, both locally and abroad," says
Cooper. "York remains the only JSE listed timber company through which
investors are able to gain focused exposure to assets of this nature," he points
out.
Ends
ISSUED FOR: YORK TIMBER ORGANISATION LIMITED: 013 750 8888
CONTACT : Lance Cooper, CEO: 083 227 4700
FAX NO : 013 750 1567
E-MAIL : lance@yorkcor.co.za
WEBSITE : www.yorkcor.co.za
ISSUED BY : Letsema Communications
CONTACT : Tish Stewart 011 442 5536 / 082 443 6399
Jonathan Mahapa 011 325 4195
FAX NO : 011 325 4199
E-MAIL : tish@letsemacom.co.za; jonathan@letsemacom.co.za
DATE : 12 July 2007
Date: 12/07/2007 12:33:01 Produced by the JSE SENS Department.
