| Thu 15 Nov 2007, 13:07 | | WSL - Wescoal Holdings - Acquisition of properties |
|
WSL
WSL
WSL - Wescoal Holdings - Acquisition of properties from Atlantis Coal
Estate CC And Express Technology CC
Wescoal Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
(JSE code: WSL & ISIN: ZAE000069639)
("Wescoal" or "the group")
* ACQUISITION OF THE COAL BUSINESSES OF ATLANTIS COAL ESTATE CC AND
EXPRESS TECHNOLOGY CC
* ACQUISITION OF PROPERTIES FROM ATLANTIS COAL ESTATE CC AND EXPRESS
TECHNOLOGY CC
* WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 24
August 2007 and 24 October 2007.
Chandler Coal (Pty) Limited ("Chandler") a wholly owned subsidiary of
Wescoal has, subject to the conditions precedent set out below,
purchased the business of Atlantis Coal Estate CC ("Atlantis") and
Express Technology CC ("Express") ("the Atlantis/Express businesses")
("the business acquisitions"). The shareholders of Atlantis and Express
are Champatial Dass, Sirjeethlal Dass and Sohanlal Dass ("the vendors").
As part of the acquisition Blanford 006 (Pty) Limited ("Blanford") a
wholly owned subsidiary of Wescoal has agreed to purchase Erf 5688,
Benoni South Ext, Gauteng ("Benoni property") and Portion 129 of FARM
1183, FARM Number 1183, Cape, Western Cape ("Western Cape property")
("the property acquisitions") from Express and Atlantis respectively.
The acquisition of the business acquisitions and the property
acquisitions are referred to hereafter as the "acquisitions".
2. RATIONALE
The acquisition of the Atlantis/Express businesses will enable Wescoal
to gain a geographical footprint in the Western Cape where at present
Wescoal has no operations. There is obvious growth potential in this
region as Atlantis holds a minor market share and the business model of
Atlantis is complimentary to that of Chandler. The acquisition of
Express in Benoni will add an additional depot operation in the East
Rand to those of Chandler situated in Krugersdorp, Middelburg, Witbank
and Belfast. Currently Chandler does not have a depot operation situated
in the East Rand. Additionally, the acquisitions add new coal supply
sources, increase Wescoal`s national competitiveness as well as
providing an additional outlet for the group`s washing operation.
The property acquisitions have been acquired because the
Atlantis/Express businesses operate from these premises.
3. DESCRIPTION OF THE ATLANTIS/EXPRESS BUSINESSES
The Atlantis/Express businesses provide the logistical requirements for
the sourcing, distributing and marketing of coal and allied products for
use in both the domestic and general industrial market. Atlantis
operates mainly in the Western Cape and Express operates from Benoni,
Gauteng.
4. TERMS AND CONDITIONS OF THE ATLANTIS/EXPRESS BUSINESSES ACQUISITION
On 13 November 2007 Chandler concluded an agreement for the purchase of
the Atlantis/Express businesses, (including only the sale assets but
excluding the excluded assets and excluded liabilities) subject to the
fulfilment of the conditions precedent in 6 below, with effect from the
first day after fulfilment of the conditions precedent ("effective
date"). The purchase consideration is R 24 million payable in cash on
the effective date.
The vendors have signed restraint of trade agreements with Chandler.
Chandler has completed a due diligence on the Atlantis/Express
businesses to its satisfaction.
5. TERMS AND CONDITIONS OF THE PROPERTY ACQUISITIONS
5.1 On 14 November 2007 Blanford concluded an agreement to purchase the
Benoni property from Express, subject to the successful conclusion of
the acquisition of the Atlantis/Express businesses, for an amount of R1
300 000. On the same day, Blanford concluded an agreement to purchase
the Western Cape property from Atlantis, subject to the successful
conclusion of the acquisition of the Atlantis/Express businesses for an
amount of R1 700 000.
5.2 The purchase prices are payable on date of transfer of the properties.
6. FUNDING OF THE ACQUISITIONS
The purchase price will be funded through the existing cash resources of
the company and cash raised through a placement of shares.
7. CONDITIONS PRECEDENT TO THE ACQUISITIONS
The acquisition is subject to the fulfilment of the following conditions
precedent:
* Chandler obtaining all the necessary regulatory approvals,
including Competition Commission approval; and
* the Atlantis businesses enter into a sub lease agreement with
Chandler in respect of the main property occupied by the
Atlantis/Express businesses.
8. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects are provided for illustrative
purposes only to provide information about how the acquisition of the
Atlantis/Express businesses may have impacted on Wescoal`s results and
financial position. Due to the nature of the unaudited pro forma
financial information, it may not give a fair presentation of the
group`s results and financial position after the acquisition of the
Atlantis/Express businesses.
The unaudited pro forma financial effects are based on the reviewed
financial information for the six months ended 30 September 2007 as
announced on SENS on 24 October 2007.
The unaudited pro forma financial effects have been included in terms of
the JSE Listings Requirements. The directors of Wescoal are responsible
for the preparation of the unaudited pro forma financial effects.
Reviewed results for Unaudited pro forma % Change
the six months ended after the
30 September 2007 acquisition 30
September 2007
Earnings per share 7.3 8.12 11%
(cents) (1)
Headline earnings 7.1 7.93 12%
per share (cents)
(1)
Fully diluted 7.2 8.08 12%
earnings per share
(cents) (1)
Fully diluted 7.1 7.89 11%
headline earnings
per share (cents)
(1)
Net asset value per 51.11 50.83 (1%)
share (cents) (2)
Net tangible asset 16.46 -2.94 (118%)
value per share
(cents) (2)
Shares in issue 105 931 105 931
(`000)
Weighted average 104 972 104 972
number of shares
(`000)
Fully diluted 105 472 105 472
weighted average
number of shares
(`000)
Notes:
1) The unaudited pro forma financial effects on the results were prepared
on the basis that the acquisition of the Atlantis/Express businesses was
completed on 1 April 2007.
2) The unaudited pro forma financial effects on the financial position were
prepared on the basis that the acquisition of the Atlantis/Express
businesses was completed on 30 September 2007.
3) The "After the Acquisitions" earnings, headline earnings, diluted
earnings and diluted headline earnings per share have been based on 50%
of the unaudited annual financial statements of the Atlantis/Express
businesses for the year ending 28 February 2007.
4) The "After the Acquisitions" net asset value and net tangible asset
value per share have been adjusted to include the assets of the
Atlantis/Express businesses for the year ending 28 February 2007 and the
estimated transaction costs have been written off against share premium.
5) Goodwill of approximately R20 million will arise on the acquisition.
9. FURTHER ANNOUNCEMENT
Shareholders will be notified once the acquisition has become
unconditional.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caution is no longer required to be exercised by shareholders when
dealing in Wescoal`s securities.
Johannesburg
15 November 2007
Designated adviser Exchange Sponsors
Attorneys for Wescoal Kim Warren, Rambau & Associates
Date: 15/11/2007 13:07:45 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
