| Wed 2 Jul 2008, 14:43 | | CKS - Crookes Brothers Limited - The acquisition, Diposal and futher cautionary |
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CKS
CKS
CKS - Crookes Brothers Limited - The acquisition, Diposal and futher cautionary
announcement
CROOKES BROTHERS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1913/000290/06)
SHARE CODE: CKS ISIN: ZAE000001434
("CROOKES" OR "THE COMPANY")
* THE ACQUISITION OF THE FARM VYEBOOM
* THE DISPOSAL OF THE DOORNKOP FARMS IN TERMS OF THE RESTITUTION ACT
* FURTHER CAUTIONARY ANNOUNCEMENT
1. THE ACQUISITION OF THE FARM VYEBOOM
1.1. Introduction and terms
The company has reached an agreement with Vyeboom Boerdery (Proprietary) Limited
and Pierre De Wet Trust, both represented by Mr De Wet ("the vendor") for the
acquisition of the vendor`s farming enterprise together with its movable and
immovable property, as a going concern ("Vyeboom farm"), for a consideration of
R52.0 million ("the Vyeboom consideration").
The effective date of the acquisition will be the date of registration of
transfer of the property. In terms of the acquisition agreements, a portion of
the Vyeboom farm, being 10 hectares, including immovable property and movable
assets, has been on sold to Two-A-Day Group Limited for a purchase consideration
of R10 million, payable in cash on registration of transfer of the property. The
net consideration payable by Crookes is therefore R42.0 million.
The Vyeboom consideration of R52.0 million, will be settled as follows:
* An amount of R10,4 million payable in cash 10 days after signature date;
and
* The balance of the consideration is payable, in cash, upon registration of
transfer of the Vyeboom farm.
1.2. Description of the farming enterprise
The property is described as Remainder of the Farm Vygeboom No.86, in the
Province of Western Cape, measuring 425,6073 hectares. The Vyeboom farm is used
for the cultivation of deciduous fruit which is sold on both the international
and local markets. The Vyeboom farm is being acquired free of all liabilities.
The value attributed to the acquisition is equal to the valuation made by the
company based on the current market prices of similar farms in the area ruling
at the time, where there is a willing buyer willing seller.
1.3. Rationale for the acquisition
Crookes wishes to expand its deciduous fruit operations and this acquisition
will increase the company`s deciduous holdings to some 530 hectares, enabling
the company to achieve the benefits of critical mass and making the company a
significant player in the industry.
2. THE DISPOSAL OF THE DOORNKOP FARMS IN TERMS OF THE RESTITUTION ACT
2.1. Introduction and terms
Shareholders are advised that an agreement has been reached between the Board of
Crookes and the National Department of the Land Affairs ("the purchaser"), on
behalf of the KwaCele Community, for the disposal of the Doornkop farms in term
of the Restitution of Land Rights Acts 22 of 1994 ("the Doornkop Farms"), for a
purchase consideration of R49 million ("the Doornkop consideration")
(collectively, "the disposal").
The effective date of the disposal will be the date of registration of transfer
of the properties.
The consideration of R49 million, will be settled as follows:
* An amount of R24,5 million payable in cash within 30 days after signature
date; and
* The balance of the consideration is payable, in cash, within 5 days upon
registration of transfer of the properties.
The proceeds of the disposal will be utilised to partially fund the company`s
Vyeboom acquisition and to fund other expansion opportunities.
2.2. Description of the Doornkop Farms
The Doornkop farms total 1963,2406 hectares in extent, 1636 of which are under
sugar cane cultivation.
The Doornkop farms are being sold free of all liabilities.
2.3. Rationale for the disposal
As mentioned in previous Annual Reports, various claims on the company`s
properties had been lodged over a period of time. The company has participated
in numerous discussions with the Land Claims Commission and this is the second
settlement that has been finalised.
3. Financial effects
The pro forma financial effects of the acquisition and the disposal are set out
below. The pro forma financial effects have been prepared for illustrative
purposes only to provide information on how the acquisition and the disposal may
have impacted on the results and financial position of Crookes. Preparation of
the pro forma financial effects is the responsibility of the directors. Because
of their nature, the pro forma financial effects may not fairly present
Crookes`s financial position after the acquisition and the disposal or the
effects on future earnings:
Before the After the After the
transactions Vyeboom Doornkop
12 months acquisition disposal Combined
ended Pro forma Pro forma change
31 March
2008
Earnings per share 338.8 338.8 574.9 70%
(cents)
Headline earnings 305.1 305.1 326.5 7%
per share (cents)
Net asset value and 2329 2544 9%
net tangible asset 2329
value (cents per
share)
Number of shares in 12,382,000 12,382,000 12,382,000 -
issue
Weighted average 12,376,056 12,376,056 12,376,056 -
number of
share in issue
Notes and assumptions:
(1) Pro forma earnings and headline earnings are based on Crookes`s published
audited year end results of Crookes for the 12 months ended 31 March 2008
after taking into account the following adjustments:
- an average interest rate on call deposits of 9.375% and average interest on
borrowings of 12,1%; and
- a company tax rate of 29%.
(2) The pro forma earnings figures illustrate the possible financial effects if
the acquisition and the disposal had been implemented on 1 April 2007.
(3) The net asset value and net tangible asset figures are based on the
assumption that the disposal happened on 31 March 2008.
4. Conditions precedent
The acquisition and the disposal are subject to conditions that are considered
normal for transactions of this nature, of which the following remain
outstanding:
- regulatory approvals, where necessary; and
- the registration of transfer of the properties, both sold and acquired.
5. Categorisation of the transactions
Each of the acquisition and the disposal is categorised as a Category 2
transaction in terms of the JSE Limited Listings Requirements.
6. Further cautionary announcement
Further to the cautionary announcement dated 21 May 2008, shareholders are
advised that negotiations referred to therein, are still progress.
If these negotiations are successfully concluded, they may have a material
effect on the trading price of the company`s securities. Accordingly,
shareholders are advised to continue exercising caution when dealing in the
company`s securities until a further announcement is made.
Renishaw
2 July 2008
Sponsor: Sasfin Capital
A division of Sasfin Bank Limited
Legal Advisor:
Livingston Leandy Inc.
Date: 02/07/2008 14:43:01 Produced by the JSE SENS Department.
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