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CNX
CNX
CNX - Conafex - Acquisition of a South African coffee business
CONAFEX HOLDINGS SOCIETE ANONYME
(Incorporated in Luxembourg RC Luxembourg No. B 17789)
("Conafex" or "the company")
Share code: CNX
ISIN: LU0167907293
ACQUISITION OF A SOUTH AFRICAN COFFEE BUSINESS
1 INTRODUCTION
The Board of Directors of Conafex is pleased to announce that the Company`s
wholly owned, South African subsidiary, Global Coffee Exports Limited ("Global")
is acquiring the business of packing and selling branded coffee formerly
conducted by The Coffee, Tea and Chocolate Company (Proprietary) Limited ("CTC")
from Pioneer Foods (Proprietary) Limited ("Pioneer").
2 NATURE OF BUSINESS AND RATIONALE
The purchase of the coffee business and brands from Pioneer will give Global
more throughput as well as immediate and greater access through ownership of
coffee brands listed with the leading retail chains in South Africa. The
acquisition enables Global to achieve a scale which would otherwise take many
years to achieve though organic growth. The consolidation with Global`s
existing roasting business will result in economies of scale in bulk purchasing,
etc. for Global.
3 SALIENT TERMS OF THE ACQUISITION
In terms of the agreement:
- The effective date of the acquisition will be 3rd September 2007.
- Conafex has acquired the coffee division of CTC from Pioneer, a company
incorporated in South Africa. Pioneer is a leading food business in South
Africa.
- The total consideration payable to Pioneer for the acquisition is
R2,300,000 and will be paid in full from the company`s own resources.
- The effect of the acquisition on earnings and net asset value is not
significant.
4 CONDITIONS PRECEDENT
The Agreement between Global and Pioneer is conditional on the receipt of
exchange control approval by Conafex Africa Holdings Limited, a wholly owned
subsidiary of Conafex that in turn wholly owns Global.
CONCLUSION
As the transaction is at arms length it does not require shareholder approval.
In terms of Luxembourg rules, where company has its primary listing, a circular
is not required for this transaction, therefore a circular will not be mailed to
shareholders. This announcement appears for information purposes only.
By order of the Board
City Group P.L.C.
Group Secretaries
Luxembourg
8 August 2007
Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
Date: 08/08/2007 15:00:01 Produced by the JSE SENS Department.
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