| Mon 28 Sep 2009, 13:43 | | AGI - AG Industries Limited - Update To Shareholders And Further Cautionary |
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AGI
AGI
AGI - AG Industries Limited - Update To Shareholders And Further Cautionary
Announcement
AG INDUSTRIES LIMITED
(Incorporated in the Republic Of South Africa)
Registration Number: 1980/004051/06
Share Code: AGI
ISIN: ZAE000039467
("AGI" or "the Group")
UPDATE TO SHAREHOLDERS AND FURTHER CAUTIONARY ANNOUNCEMENT
AGI has been trading under cautionary since 8 June 2009 and issued a Trading
Statement on 20 July 2009. By way of these announcements shareholders have been
advised that:
- Trading conditions had deteriorated markedly and that this deterioration has
had a negative impact on the AGI`s operating results and cash flow and that the
Group had made significant operating losses during the 2009 financial year.
- The Group`s headline loss per share is forecast to be between 69 cents per
share ("cps") and 79 cps (2008: 16.3 cps) and the basic loss per share is
forecast to be between 136 cps and 146 cps (2008: 15.4 cps) for the year ended
June 2009.
- AGI was contemplating and remains in discussions regarding a restructuring
program and the potential disposal of non-core assets.
- Discussions with AGI`s bankers were taking place.
On 3 September AGI announced the sale of its Sheerline division, which is a
disposal of a non-core asset and one step in the restructuring program.
Management have conducted a review of the Group`s position and have produced a
comprehensive operational restructuring plan. This plan entails significant
rationalisation and consolidation of the Group`s activities. Without the
reduction of overheads that such plan is intended to achieve, losses will
continue to be incurred in the current economic environment. It is intended
that funds generated from the disposal of non-core assets will be utilized to
finance and complete this restructuring.
Management`s review shows that the restructuring of operations and the disposal
of non-core assets may not be sufficient to ensure the continuation of the AGI
Group as a going concern without further action. In this context, AGI`s bankers
have indicated that their continued financial support of the AGI Group is
dependent upon, inter alia, a recapitalisation of the Group by way of an equity
injection. . Discussions in this regard with AGI`s bankers and certain other
potential providers of fresh finance have been ongoing.
Shareholders are advised that a potential transaction to implement a
recapitalisation is presently being considered and it could have a material
effect on the price at which AGI shares trade on the JSE and may, if
implemented, result in considerable dilution of shareholders` existing
interests.
Accordingly, shareholders are advised to continue to exercise caution when
trading in their shares until a further announcement is made.
At a Board meeting held on 18 September 2009, the directors of AGI concluded
that a recapitalisation is necessary for the Group to continue to be regarded as
a going concern. Hence the finalization of the AGI`s Group`s Annual Financial
Statements has been delayed until it can be established whether such a
transaction can be implemented to the satisfaction of the Group`s shareholders,
potential new investors and bankers. Further to the SENS announcement dated 10
September 2009 where it was stated that AGI intended to publish its results on
or about 28 September 2009, shareholders are now advised that the publication
will be delayed until the abovementioned matters are resolved.
Johannesburg
28 September 2009
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 28/09/2009 13:43:01 Produced by the JSE SENS Department.
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