| Wed 31 Oct 2007, 11:00 | | BEL - Bell - Announcement Of Bell Equipment Limite |
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BEL
BEL
BEL - Bell - Announcement Of Bell Equipment Limited Broad Based Black
Economic Empowerment Transaction
BELL EQUIPMENT LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1968/013656/06
Share Code: BEL & ISIN: ZAE000028304
(`Bell` or `the Company`)
ANNOUNCEMENT OF BELL EQUIPMENT LIMITED Broad Based Black Economic
Empowerment transaction
In line with a Board strategy formalized in 2004, the Directors of Bell are
pleased to announce a BBBEE deal which will result in 27% BBBEE ownership
in our South African Sales and Customer Service Operations, including the
local Wesbank Finance joint venture. As this is the first deal amongst the
larger earthmoving equipment companies it is of particular importance to
our South African customers.
After an extensive search, evaluation, interaction, due diligence and
negotiation the Board selected to partner with Kagiso Strategic Investments
lll (Pty) Ltd (`KSI`), a wholly owned subsidiary of Kagiso Trust
Investments (Pty) Ltd. KSI will subscribe for 22.5% of the shares of a
newly incorporated Bell group subsidiary, Bell Equipment Sales South Africa
Limited, (`BESSA`) for R79.5 million, in line with an independent
professional valuation. Subject to final legal agreements and regulatory
approval, the transaction will be effective 1 January 2008.
In addition, Bell South Africa employees will subscribe for 7.5% of the
shares in BESSA. They will own the shares in own name rather than via a
trust which the company feels is more in line with the spirit of true
empowerment. The company will finance the employees` purchase, repayable
from dividends and/or shareholder loan repayments.
To maximise the benefit from these transactions, all Bell South Africa
operations have embarked on transformation programmes to optimise their
BBBEE scores across all seven elements of the Department of Trade and
Industry scorecard. This should result in Bell customers qualifying for 80%
of their purchases as BEE spend from 2008 and in due course 100%. This is
especially relevant for the mining and construction customers (and their
contractors and plant hire suppliers) who are dependent on licenses and
contracts from government. It will allow the group to maximise the benefits
flowing from the long term positive outlook for mining, infrastructure and
construction.
BESSA will be headed up by Bokkie Coertze, currently the Managing Director
of the Bell SA Sales and Distribution Operations, and will have a majority
of black Directors.
The effect of this transaction on NAV in 2008 will be an increase of 9
cents, while EPS will drop by 23 cents with the decrease in 2009 being
envisaged to increase from 23 cents to 28 cents.
Richards Bay
31 October 2007
INVESTEC BANK LIMITED
SPONSORS
Date: 31/10/2007 11:00:59 Produced by the JSE SENS Department.
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