| Mon 20 Oct 2008, 17:01 | | DLV - Dorbyl Limited - Disposal by Dorbyl of the assets and liabilities of its |
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DLV
DLV
DLV - Dorbyl Limited - Disposal by Dorbyl of the assets and liabilities of its
Dorbyl automotive systems division ("DAS")
DORBYL LIMITED
(Incorporated in the Republic of SA)
(Registration Number 1911/001510/06)
(Share Code: DLV ISIN: ZAE000002184)
("Dorbyl" or "the Group")
DISPOSAL BY DORBYL OF THE ASSETS AND LIABILITIES OF ITS DORBYL AUTOMOTIVE
SYSTEMS DIVISION ("DAS")
1. the disposal
1.1 Further to the cautionary announced in the press on 28 August 2008 and the
renewal thereof on 25 September 2008, shareholders are advised that Dorbyl
has entered into an agreement whereby it will dispose of the Assets and
Liabilities of its Dorbyl Automotive Systems Division ("DAS") to Red Tape
Trading 25 (Proprietary) Limited ("the purchaser"), effective 2 February
2009 ("the effective date"), ("the disposal").
1.2 The disposal and the implementation thereof is subject to the fulfilment of
certain conditions precedent as described in 5 below. In this regard,
please note that certain of the conditions precedent are onerous and Dorbyl
does not give assurances that these will be met.
2. rationale for the disposal
As stated in the cautionary announcement referred to above, the deterioration of
the Group`s results were predominantly due to the negative effect of global
price pressures from all spheres of the automotive industry. It was further
stated in that announcement that the Group is overly reliant on the automotive
industry and the inherent exposures and risks in that industry as to global
competition, pricing, input costs and capital expenditure necessary to keep up
with technology. The disposal of DAS is an initial step in reducing such
exposure.
3. consideration AND APPLICATION OF CONSIDERATION
3.1. The disposal consideration comprises an amount of R7,6 million in respect
of the Fixed Assets plus the Net Working Capital of DAS as at 2 February
2009, which is currently forecast at R16,8 million.
3.2 The disposal consideration will be settled in cash within five days prior
to the effective date in respect of the Fixed Assets and the balance of the
consideration on 28 February 2009.
3.3 As the consideration will only be received in early February 2009, the
Board will determine, depending on the needs of Dorbyl, the optimum
utilisation of the proceeds.
4. financial effects
As the total consideration will only be known on the effective date, i.e. 2
February 2009, the financial effects of the disposal will be announced
thereafter.
5. conditions precedent
The disposal is subject to, inter alia, the following conditions precedent:
- the approval of the disposal by the Competition Authorities and Exchange
Control Authorities to the extent necessary;
- the conclusion of a lease agreement in respect of the operating premises
between the purchaser and Dorbyl;
- the completion of a due diligence audit by the purchaser and the results
thereof acceptable to the purchaser;
- the purchaser furnishing adequate financial guarantees for the purchase
consideration to Dorbyl in a form acceptable to Dorbyl; and
- the assignment to the purchaser of all technological and other licences
used by the business of DAS.
Johannesburg
20 October 2008
Sponsor: PSG Capital (Proprietary) Limited
Date: 20/10/2008 17:01:10 Produced by the JSE SENS Department.
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