| Mon 29 Sep 2008, 8:00 | | AFE - AECI Limited - Termination Of Negotiations For The Sale Of Sans Fibres` |
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AFE
AFE
AFE - AECI Limited - Termination Of Negotiations For The Sale Of Sans Fibres`
Nylon Business
AECI LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1924/002590/06)
Share code: AFE ISIN No. ZAE000000220
("AECI")
TERMINATION OF NEGOTIATIONS FOR THE SALE OF SANS FIBRES` NYLON BUSINESS
Shareholders are referred to the SENS announcement published on 7 April 2008
indicating that AECI had reached agreement, in principle, to sell the nylon
light decitex (LDI) business of SANS Fibres (Proprietary) Limited ("SANS") to a
consortium ("the Consortium") comprising mainly the management of SANS, the
Industrial Development Corporation ("IDC") and a SANS workers` trust. The sale
offer was for the entire fibres business situated at Bellville in the Western
Cape and at Stoneville, North Carolina, USA.
As indicated most recently in AECI`s interim results for the half-year ended 30
June 2008, released on SENS on 29 July 2008, it was expected that the sale would
be concluded by the end of September 2008.
Since this last announcement, there have been a number of major adverse
developments in the nylon market that have impacted negatively on the value and
prospects of the SANS business. Such developments include increases in raw
material and other input costs, customers` resistance to higher product prices
required to offset these increases, and labour unrest at Bellville.
After much discussion between AECI and the Consortium, the parties have agreed
that under the present circumstances the envisaged transaction is no longer
feasible.
With mutual regret, therefore, the parties have agreed to terminate any further
discussions regarding the sale of the business.
AECI will, by year-end, re-evaluate all options for the business and will make a
final decision on exiting the nylon LDI business at that time.
A due diligence process for the sale of SANS`s polyethylene terephthalate (PET)
business, also at Bellville, is continuing with the identified potential
purchasers and it is still expected that finality on exiting this business will
be achieved by the end of 2008.
Woodmead, Sandton
29 September 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 29/09/2008 08:00:04 Produced by the JSE SENS Department.
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