| Wed 2 Sep 2009, 16:00 | | DLV - Dorbyl - Disposal By Guestro Steering Gears (Proprietary) Limited a |
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DLV
DLV
DLV - Dorbyl - Disposal By Guestro Steering Gears (Proprietary) Limited, a
Wholly Owned Subsidiary of Dorbyl, of the Assets and Liabilities of its
Operation Referred to as Guestro Forging And Machining ("F&M")
DORBYL LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1911/001510/06)
(Share Code: DLV & ISIN: ZAE000002184)
("Dorbyl" or "the Group")
DISPOSAL BY GUESTRO STEERING GEARS (PROPRIETARY) LIMITED, A WHOLLY OWNED
SUBSIDIARY OF DORBYL, OF THE ASSETS AND LIABILITIES OF ITS OPERATION REFERRED TO
AS GUESTRO FORGING AND MACHINING ("F&M")
1. THE DISPOSAL
1.1. Further to the renewal of the cautionary announcement released on SENS
and published in the press on 30 July 2009 and 31 July 2009,
respectively, shareholders are hereby advised that Guestro Steering
Gears (Proprietary) Limited ("GSG"), a wholly owned subsidiary of
Dorbyl, has entered into an agreement whereby it will dispose of the
assets and liabilities of its business referred to as Guestro Forging
and Machining ("F & M") to Specialised Precision Investments
(Proprietary) Limited ("the Purchaser"), ("the Disposal").
1.2. The Disposal and the implementation thereof are subject to the
fulfilment of certain conditions precedent as described in paragraph 5
below. In this regard, shareholders should note that certain of the
conditions precedent are onerous and Dorbyl does not give assurances
that same will be met.
1.3 The effective date of the Disposal is the first day of the month
succeeding the month in which the suspensive conditions are fulfilled
("the Effective Date").
2. RATIONALE FOR THE DISPOSAL
As detailed in the announcement of the provisional Group results for the
year ended 31 March 2009 on SENS and in the press on 8 June 2009 and 9 June
2009, respectively ("Provisional Results Announcement"), 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.
Shareholders are also referred to previous SENS and press announcements
wherein detai ls were set out of the various interventions and actions
being taken in respect of the five business units as well as the five
properties owned by the Group. With regards to F&M, it was stated in the
Provisional Results Announcement that negotiations in respect of the
Disposal were at an advanced stage.
3. CONSIDERATION AND APPLICATION OF CONSIDERATION
3.1 The disposal consideration comprises the value of the net working
capital of F&M as at the Effective Date. ("the Disposal
Consideration").
3.2. The Disposal Consideration will be settled in cash as follows:
- on the Effective Date, an amount of R10 million;
- on the last day of the month succeeding the month in which the
suspensive conditions are fulfilled, an amount equivalent to 75%
of the Disposal Consideration less R10 million; and
- the balance of the Disposal Consideration to be paid on or before
31 December 2009.
3.3 As the full Disposal Consideration will only be received late in
December 2009, the Board will give consideration as to the optimum
utilisation of surplus funds closer to that time.
4. Financial effects
As the consideration is dependent on the value of the net Working Capital
as at the Effective Date, a further announcement will be released closer to
the time setting out the unaudited pro forma financial effects of the
Disposal.
5. Conditions precedent
The Disposal is subject to, inter alia, the following conditions precedent:
5.1 the approval of the Disposal by the shareholders of Dorbyl;
5.2 the Purchaser furnishing adequate financial guarantees for the
Disposal Consideration to Dorbyl in a form acceptable to Dorbyl; and
5.3 the assignment to the Purchaser of all contracts relevant to the
business of F&M.
RELATED PARTY TRANSACTION
6.1 The controlling shareholder of the Purchaser is Mr KB Manners, who very
recently acquired a nominal 3% equity interest in GSG and is also a
director of GSG and the General Manager of F&M. Mr Manners is accordingly
deemed to be a related party to GSG and Dorbyl in terms of the Listings
Requirements of the JSE Limited ("the JSE").
7. DOCUMENTATION AND CATEGORISATION
7.1 The Disposal constitutes a Category 1 and Related Party transaction in
terms of the JSE Listings Requirements. Accordingly, a circular will
be posted to shareholders requesting them to approve the Disposal.
7.2 It is uncertain at present whether the Purchaser will be successful in
securing the necessary finance to discharge his obligations in terms
of the Disposal Consideration, hence the JSE has granted a
dispensation whereby Dorbyl is not required to dispatch a circular to
shareholders within 28 days of this announcement. Once there is
certainty that the suspensive condition regarding the funding of the
Disposal Consideration has been fulfilled by the Purchaser, an
announcement will be made notifying shareholders thereof and of the
dispatch of a circular.
8. CONTINUATION OF CAUTIONARY
Shareholders of Dorbyl are advised to continue exercising caution when dealing
in Dorbyl shares on the JSE.
Johannesburg
2 September 2009
Sponsor: PSG Capital (Proprietary) Limited
Date: 02/09/2009 16:00:03 Produced by the JSE SENS Department.
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