| Tue 9 Oct 2007, 15:52 | | HVL - Highveld - Sale of Rand Carbide Division |
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HVL
HVL
HVL - Highveld - Sale of Rand Carbide Division
Highveld Steel and Vanadium Corporation Limited
Registration No. 1960/001900/06
(Incorporated in the Republic of South Africa)
("Highveld" or "the Corporation")
Share code: HVL
ISIN code: ZAE000003422
SALE OF RAND CARBIDE DIVISION
Highveld has entered into a sale and purchase agreement with Silicon Smelters
(Proprietary) Limited, a subsidiary of FerroAtlantica for the sale of its Rand
Carbide division. The effective date of the transaction is expected to be 1
January 2008.
The transaction is dependant upon Competition Authority Approval.
The purchase price is R300 million for the business comprising the fixed
assets, property, consumable stores, contracts and intellectual property ("the
purchase consideration"). The accounts receivable, raw material and finished
goods inventory and creditors of Rand Carbide as at the effective date will
remain with Highveld. The purchase consideration will be satisfied by the
payment of a deposit of R50 million. The balance of the purchase consideration
will be paid on the effective date. The Board of Directors will consider
possible uses of the proceeds and until such time the funds will be invested.
Rand Carbide is a wholly owned, unincorporated and independently managed
division of Highveld. Highveld acquired Rand Carbide during 1978 and it
operated as a division of Highveld. Highveld is listed on the JSE under
"Steel". Evraz Group S.A. has a 80.9 per cent interest in Highveld.
Rand Carbide produces ferrosilicon ("FeSi"), electrically calcined anthracite
("ECA") and char. The products are currently sold to third party customers in
South Africa and internationally as well as to other divisions of Highveld.
Rand Carbide`s share of the South African market is approximately 50 per cent
for FeSi, 10 per cent for ECA and 10 per cent for char. The global market
share of all these products is insignificant.
The Board of Highveld considered the Rand Carbide assets non-core and
consequently agreed to sell.
The table below sets out the pro forma financial effects of the distribution
on the Corporation`s earnings per share ("EPS"), headline earnings per share
("HEPS"), net asset value per share ("NAV") and tangible net asset value per
share ("TNAV").
The pro forma financial effects have been prepared for illustrative purposes
only and, because of their nature, may not give a true reflection of the
Corporation`s financial position, changes in equity, results in operations or
cash flows. The pro forma financial effects are the responsibility of the
Corporation`s directors.
The pro forma financial effects have further been based on the results for the
financial year ended 31 December 2006.
Results as Proforma results Percentage
published adjusted for the change (%)
(cents) impact of the
sale of Rand
Carbide (cents)
EPS 1 122.6 1 333.9 +18.8
HEPS 1 049.0 1 047.5 -0.1
NAV 1 887.1 2 351.0 +24.6
TNAV 2 390.0 2 644.6 +10.7
Note:
1. The after tax profits attributable to the net assets subject to the
transaction were as follows:
R`000 R`000 R`000
2004 2005 2006
Headline earnings 41 564 23 637 20 597
Attributable earnings 41 564 23 637 16 570
2. The pro forma financial effects were calculated based on 99 148 098
ordinary shares in issue as at 31 December 2006.
3. EPS and HEPS impact assumes an effective date of 1 January 2006 whilst
NAV and TNAV impact assumes an effective date of 31 December 2006.
4. The pro forma financial effects assume that:
(a) the proceeds from the disposal were invested at 9 per cent per annum;
(b) the profit, attributable to the net assets subject to the transaction,
for 2006 was not earned; and
(c) the estimated attributable profit on disposal of the net assets subject
to the transaction was earned on 31 December 2006.
Emalahleni
9 October 2007
Sponsor
J.P. Morgan Equities Limited
Registration number 1995/011815/06
Corporate Law Advisors to Highveld Steel and Vanadium Corporation Limited
Tabacks and Associates (Proprietary) Limited
Attorneys to the Silicon Smelters (Proprietary) Limited
Roodt Inc
Date: 09/10/2007 15:52:21 Produced by the JSE SENS Department.
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