| Wed 30 Sep 2009, 11:59 | | AGI - A G Industries Limited - Disposal And Renewal Of Cautionary Announcement |
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AGI
AGI
AGI - A G Industries Limited - Disposal 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")
DISPOSAL OF AFRICA GLASS INTERNATIONAL HOLDINGS INC AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements released on SENS on 8 June, 20 July, 31
August and 28 September 2009 respectively, AGI wishes to announce that it has
disposed of its 100% interest in Africa Glass International Holdings Inc.
("International Holdings") a company incorporated in the British Virgin Islands,
for a cash price of US$3.5 million ("the Disposal"). The purchaser of
International Holdings is Oriole Glass Holdings (Private) Limited, a company
incorporated in Singapore ("the Purchaser"), which is presently controlled by Mr
Alan Sparks. The Purchaser has indicated that Mr Alex Barrell (the former CEO,
and presently a non-executive director and significant shareholder of AGI and
therefore a related party) intends to become a shareholder of the Purchaser in
due course.
2. DESCRIPTION OF INTERNATIONAL HOLDINGS
International Holdings is the holding company of AGI`s international businesses.
It has glass trading operations primarily in Mauritius, Singapore, United
Kingdom and Germany.
3. TERMS OF THE DISPOSAL
3.1 Sale
In terms of an agreement dated 29 September 2009, AGI has disposed of all the
shares, comprising 100% of the issued share capital, and shareholder claims held
by it in International Holdings, to the Purchaser.
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 conditions precedent set out in 3.4
below, from which date ownership, control and risk in International Holdings
shall pass to the Purchaser.
3.3 Purchase price
The purchase price is US$3 500 000, the Rand equivalent of which is
approximately R25.87 million at an exchange rate of R7.39/US$1. The purchase
price will be payable on the effective date.
The net proceeds of the Disposal will be applied to the financing of an
operational restructuring plan of the AGI group, as referred to in the
announcement of 28 September 2009.
3.4 Conditions precedent
The Disposal is conditional on the fulfilment or waiver, where it may be
applicable, of inter alia the following conditions precedent by no later than
16:00 on 30 November 2009:
3.4.1 Approval of AGI shareholders should such be required in terms of the
JSE Limited ("JSE") Listings Requirements;
3.4.2 Regulatory approvals, including those of the JSE and the Exchange
Control Department of the South African Reserve Bank;
3.4.3 The Purchaser providing a bank guarantee for the purchase price; and
3.4.4 Insofar as is required, the approval of AGI`s bankers.
Provision is made for the date of fulfillment of the conditions precedent to be
extended by notice in writing by either the Purchaser or AGI to a date not
beyond 31 December 2009.
3.5 Warranties
The Disposal is free of any material warranties other than a warranty in respect
of the German subsidiary of International Holdings to the effect that that all
liabilities for tax due by that subsidiary prior to 30 June 2009 has been
provided for in its financial statements at that date.
3.6 Restraint
Messrs Alex Barrell and Thibault Danjou have agreed to a restraint of trade
against competing with AGI or its subsidiaries in respect of the activities of
AGI for a period of one year from the effective date in South Africa.
3.7 Other agreements
AGI has entered into a supply agreement with International Holdings with respect
to the future possible supply of float glass to AGI on commercial terms. In
addition, AGI has agreed to supply IT support services to the purchaser and its
subsidiaries on commercial terms.
4. RATIONALE FOR THE DISPOSAL
In its cautionary announcements referred to in paragraph 1 above the company
advised that a major operational restructuring plan was in the course of
implementation. This included the disposal of non-core assets. The Disposal is
in line with the restructuring plan.
The attention of shareholders is drawn to the announcement by AGI of the
disposal of the Sheerline businesses dated 3 September 2009, which disposal also
took place in accordance with the restructuring plan.
5. CATEGORISATION OF THE TRANSACTION
The Disposal is categorised as a Category 1 related party transaction in terms
of the JSE Listings Requirements and accordingly requires, inter alia, the
approval of AGI shareholders in general meeting, and a fairness opinion from an
independent expert. The directors of AGI, excluding Mr A Barrell, have retained
PKF (Johannesburg) Inc. ("PKF") to advise them whether the transaction is fair
in so far as shareholders of AGI are concerned. The opinion letter of PKF will
be included in the circular to be sent to shareholders regarding the Disposal.
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 including a notice of general
meeting is in the course of preparation and will be posted to shareholders in
due course.
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
30 September 2009
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Corporate Adviser
Favim Investments
Independent Expert
PKF (JHB)
Legal Adviser
HR Levin
Attorneys, Notaries and Conveyancers
Date: 30/09/2009 11:59:03 Produced by the JSE SENS Department.
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