| Thu 3 Apr 2008, 13:31 | | PPE - Purple Capital Limited - Update |
|
PPE
PPE
PPE - Purple Capital Limited - Update
Purple Capital Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE & ISIN: ZAE000071411
("Purple Capital" or "the Company")
PURPLE CAPITAL UPDATE
In light of the high volatility of the Purple Capital share price in a thinly
traded market, the Directors of Purple Capital are concerned that shareholders
may be making decisions in the absence of sufficient information. The purpose of
this announcement is to reassure shareholders that the potential loss of the
entire Global Trader Europe ("GTE") operations has:
- not had a significant impact on Global Trader`s South African business; and
- had absolutely no effect on the remaining operations of Purple Capital.
The GTE operations are independently held in a limited liability company, hence
the remainder of the Global Trader and Purple Capital groups are unaffected
economically or legally by the circumstances of GTE. As a result of the demise
of the GTE business, Purple Capital will be required to write down the carrying
value of its investment in the Global Trader Group from R315 million to R252
million (based on our estimate that GTE comprised 20% of the Global Trader Group
earnings), translating into an income statement (non-cash flow) loss of R63
million. The Purple Capital Group has no further exposure to the GTE situation
and expects no other losses to arise. In anticipation of the loss of the GTE
business, Purple Capital has initiated claims against the vendors, including a
claim against the escrow retained out of the purchase price, which currently
stands at R52 million - if this claim is successful the net loss would decrease
to R11 million.
The outlook for the Global Trader South African operations ("GTSA") remains
highly positive with GTSA continuing to post strong financial results every
month and contribute significant positive cash flows to the group despite the
prevailing economic and market conditions. In addition to the South African
business it is expected that Global Trader`s Canadian operations ("GTC") will be
able to resume business within the next quarter. This separate legal entity has
contributed significantly to group income over the last 18 months and only
stopped business on the basis that it was no longer able to act as agent of GTE.
It is our intention for GTC to operate as agent of GTSA in the near future.
The remainder of Purple Capital`s significant investments are performing at or
exceeding our expectations. The most recent results released by Cape Empowerment
Trust ("CET") and Spanjaard, our two listed investments, were very encouraging,
both showing significant growth compared to the prior period. Our interim
results will reflect the anticipated impairment of the GTE investment, a mark to
market write down in respect of CET (mainly reflective of weaker equity market
conditions as a whole), transaction funding costs and amortisation of intangible
assets recognised on the acquisition of the Global Trader Group. We are however
confident that all of our investments will continue to increase in value going
forward.
Shareholders are again urged to exercise caution when dealing in the Company`s
shares until further information is furnished relating to our claims against the
vendors and the results of the administrators meeting with clients of GTE which
should be complete by no later than 7 May 2008, when our interim results are
expected to be published.
Johannesburg
3 April 2008
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 03/04/2008 13:31:01 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.
