| Thu 3 Sep 2009, 16:59 | | AGI - A G Industries Limited - Proposed Disposal of the Sheerline Business and |
|
AGI
AGI
AGI - A G Industries Limited - Proposed Disposal of the Sheerline Business and
Renewal of Cautionary Announcement
A G INDUSTRIES LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
REGISTRATION NUMBER: 1980/004051/06
SHARE CODE: AGI
ISIN: ZAE000039467
("AGI" OR "THE COMPANY")
PROPOSED DISPOSAL OF THE SHEERLINE BUSINESS AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements released on SENS on 8 June, 20 July
and 31 August 2009 respectively, AGI wishes to announce that, through its
wholly owned subsidiary AGI Solutions (Pty) Limited, it has entered into an
agreement to dispose of its business being carried on under the name
Sheerline, together with the business carried on under the name Solutions
Department (collectively, "the Business"), for a cash price that will be a
maximum of R50 000 000 and a minimum of R45 000 000 ("the Disposal"). The
purchaser of Sheerline is Wispeco (Pty) Limited ("the Purchaser"), which is
a wholly owned subsidiary of Wispeco Holdings Limited, which in turn is
controlled by Remgro Limited.
The Disposal is, inter alia, subject to the approval of AGI shareholders in
general meeting, as further set out below.
2. DESCRIPTION OF SHEERLINE
The division of the Business business conducted under the trade name
"Sheerline" is to stock, wholesale, retail and distribute aluminium
products and related accessories through a distribution network involving
the central support to such systems, and the division of the business
conducted under the trade name "Solutions Department" is to provide
solutions to the design and development of aluminium products.
3. TERMS OF THE DISPOSAL
3.1 Sale of business
The sale of the Business involves the sale of all the operational
assets of the business, including machinery, equipment, instruments
and software, together with intangible assets such as goodwill;
copyrights; logos and trademarks; stock; accounts receivable and
operational agreements. It includes the assumption of operating
liabilities, excluding bank overdraft accounts and intercompany loans.
Provision is made for employees within the Business to pass into the
employ of the Purchaser on the effective date set out below.
3.2 Effective date
The effective date of the Disposal will be the first business day of
the month following the fulfilment or waiver of the suspensive
conditions set out in 3.4 below, from which date ownership, control
and risk in the Business shall pass to the Purchaser.
3.3 Purchase price
The purchase price has an upper limit of R50 000 000 and a lower limit
of R45 000 000, and will be calculated with reference to the assets of
the business less the liabilities to be assumed at the effective date
The purchase price will be payable in two parts. The first payment
will be for all the assets sold, less liabilities, calculated as
above, less a provision of 15% of accounts receivable. This will be
paid 14 days after the effective date. The second payment will be made
60 days after the effective date and will be for the balance of the
purchase price, less uncollectable accounts.
The net proceeds of the Disposal will be applied to the reduction of
the liabilities of the AGI group.
3.4 Suspensive conditions
The Disposal is conditional on the fulfilment or waiver, where it may
be applicable, of inter alia the following suspensive conditions:
3.4.1 The Purchaser obtaining the requisite trading and other
licences to operate the Business within 120 days from
signature;
3.4.2 The written approval of the Purchaser`s auditors to the
Disposal within 60 days from signature, regard being had to
the original due diligence prior to signing of the disposal
agreement, and to the subsequent due diligence;
3.4.3 Regulatory approvals, including those of the Competition
Authorities (within 120 days from signature), the JSE
Limited ("JSE") and the Securities Regulation Panel, to the
extent required;
3.4.4 The Purchaser obtaining the approval of its holding company,
Wispeco Holdings Limited, within 30 days; and
3.4.5 AGI shareholder approval as required in terms of the JSE
Listings Requirements, within 90 days from signature.
3.5 Warranties
The Disposal is subject to warranties normal for a transaction of this
type, subject to a maximum amount claimable of R5 000 000.
3.6 Restraint
AGI and its subsidiaries have agreed to a restraint of trade against
competing with the Purchaser in respect of the activities of the
Business as being sold for a period of two years from the effective
date in the countries of South Africa, Namibia, Botswana, Swaziland
and Mozambique. The Seller will be allowed to continue to conduct
other business which it already conducts, and to to continue to
operate the business in the name of Africa Glass Botswana (Pty) Ltd in
respect of stocking and wholesale of aluminium products and related
accessories
4. RATIONALE FOR THE DISPOSAL
In its cautionary announcements referred to above the company advised that
a major restructuring programme was underway. This included the disposal of
non-core assets. The Disposal is in line with the programme as announced.
5. CATEGORISATION OF THE TRANSACTION
The Disposal is categorised as a Category 1 transaction in terms of the JSE
Listings Requirements and accordingly will require, inter alia, the
approval of AGI shareholders in general meeting.
6. FURTHER ANNOUNCEMENTS AND DOCUMENTATION
A further announcement will be made in due course showing the pro forma
financial effects of the transaction. A circular incorporating a notice of
general meeting is in the course of preparation and will, subject to
regulatory approvals, be posted to shareholders within 28 days from the
date of this announcement.
7. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that in addition to the Disposal, further
discussions are underway which may have an effect on the company`s share
price. Shareholders are accordingly advised to continue to exercise caution
in trading in their shares
Johannesburg
3 September 2009
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 03/09/2009 16:59:58 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.
