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AER
AER
AER - Amalgamated Electronic Corporation Limited - Cautionary Announcement
AMALGAMATED ELECTRONIC CORPORATION LIMITED
("AMECOR")
(Incorporated in the Republic of South Africa)
(Registration number 1997/010036/06)
Share code: AER ISIN: ZAE000070587
("Amecor" or "the Company" or "the Group")
CAUTIONARY ANNOUNCEMENT
Disputes with Rabie Van der Merwe
The Company announced the resignation of founder director of the FSK group Mr
Rabie Van der Merwe on 15 November 2006. Mr Van der Merwe, with whom the company
is in dispute, has since emigrated to Australia. In addition Mr Van der Merwe is
in disputes with respect to his alleged claim for further shares in the company.
Mr Van der Merwe is currently a holder of 16 345 900 shares in Amecor and
represents approximately 85% of the contingent claim in respect of the disputed
contingently issuable shares. The remaining 15% of the claim in respect of the
contingently issuable shares is theoretically due to FSK founder shareholder and
currently director Mr Keith Vieira. Mr Vieira has advised that he will not be
pursuing the claim jointly with Mr Van der Merwe. The Board and management of
the company believes Mr Van der Merwe`s claim to be ill advised and without
merit or foundation. Mr Vieira will be standing for election as Technical
Director at the Amecor AGM which will be held in September 2007.
Shareholders are referred to the audited results announcement of 31 March 2007
issued on 30 May 2007 in which it was announced that:
"The purchase price payable for the acquisition of the FSK Group in 2005 was a
minimum of R 45 million which was fully discharged in 2006. Subject to the
achievement of certain excess profits, up to a further 5 250 000 ordinary Amecor
shares were to be made available for issue to the vendors (as set out in
paragraph 3.3.2 of the circular of 19 July 2005), the outcome of which is
subject to a dispute resolution arbitration process provided for in the vendor
agreements, which it is envisaged will occur during the last quarter of 2007,
and which will determine the quantum (if any) of additional shares to be
awarded."
Potential offer
Subsequent to invoking the dispute clause of the FSK agreement Mr Van der Merwe
has commenced negotiations with non-executive director Mochele Noge and has
requested Mr Noge to assemble a purchasing consortium to formulate a composite
offer for all of his shares, claims and other contingent claims in Amecor.
Mr Noge, Management and the Board are currently taking advice on reaching an
offer acceptable to all parties to acquire Mr Van der Merwe`s shares, claims and
contingent claims against Amecor in their entirety and in this respect merchant
bankers are being appointed to advise on a fair and reasonable offer price,
mechanism and structure. Amecor is desirous that this opportunity will enable,
inter alia, a meaningful BEE shareholding participation in Amecor going forward.
Commentary
Trading results for the first quarter of financial year 2008 have been reported
to Amecor management and pursuant thereto the Board remains optimistic about the
prospects of the group in terms of a healthy order book for its products and
services and a continued steady growth in profitability. The Group will report
its results for the six months ending 30 September 2007 at or around the end of
October 2007 and expects them to be in line with its budgets and the outlook and
steady trends already reported.
Current Amecor management and directors are committed to the company and have
not disposed of any of their shares in the past twelve months and have no
intention of doing so in the foreseeable future.
Shareholders are accordingly advised to exercise caution in their share dealings
until further notice.
Johannesburg
26 July 2007
On behalf of the Board
D Alexander
Chief Executive
Rivonia
Sponsor
Sansara Financial Services (Pty) Ltd
Date: 26/07/2007 15:18:01 Produced by the JSE SENS Department.
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