| Tue 3 Nov 2009, 7:30 | | SPG - Super Group - Disposal Of The Mica Brand And Cautionary Announcement |
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SPG
SPG
SPG - Super Group - Disposal Of The Mica Brand And Cautionary Announcement
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000011334
("Super Group")
DISPOSAL OF THE MICA BRAND AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Super Group has signed an agreement with Burgundy Rose Trading 64
Limited, a Mica-led member consortium, ("the Purchaser") to dispose of
the Mica franchise business (conducted as a going concern by Power Plus
Performance ("PPP"), a wholly owned subsidiary of Super Group)
consisting of :
a) the intellectual property;
b) all PPP`s rights, title and interest under the agreements concluded
by PPP with the Mica members in respect of the business prior to
the effective date, as defined in paragraph 5 below; and
c) the goodwill, but specifically excluding the excluded assets,
(collectively, "the Transaction").
2. NATURE OF BUSINESS
Mica is a voluntary buying group and franchise parent to 160 member
stores (member-owned franchised stores) operating in the do-it-yourself
/hardware market. Mica owns and manages the brand, performs buying and
clearing functions for the member stores and offers value-added
marketing, operational and financial services to members.
3. RATIONALE FOR THE TRANSACTION
The board of Super Group ("the Board") has resolved to consider the
Transaction mainly as a consequence of:
- the decision by the Board to implement a refocused strategy
resulting in the disposal of certain non-core assets; and
- the announcement of a recapitalisation and debt restructure for
Super Group (as released on SENS on 18 March 2009).
4. PURCHASE PRICE
The purchase price payable by the Purchaser to PPP for the business
shall be an amount equivalent to the aggregate of -
a) R25 000 000 in cash (payable on the effective date); and
b) the face value of the sale liabilities being the obligations of the
Super Group to the Mica members in terms of the sale contracts
which arise after the effective date and the severance pay
obligations to designated employees. The Purchaser assumes
responsibility for the settlement of all of the sale liabilities
and the Purchaser shall discharge all of the sale liabilities as
and when they fall due for payment.
5. CONDITIONS PRECEDENT
The Transaction is subject to, inter alia, the fulfilment or waiver of
the following condition precedent:
a) that by the day immediately preceding the effective date Super
Group delivers proof to the satisfaction of the Purchaser that the
aforesaid special resolution has been duly registered with CIPRO
prior to the effective date.
6. EFFECTIVE DATE
The effective date of the Transaction is, subject to the fulfilment or
waiver of the conditions precedent, 00:01 on 1 December 2009.
7. OTHER TERMS OF THE TRANSACTION
7.1 The Purchaser will not acquire the excluded assets being
collectively the cash, the accounts receivable, the fixed assets of
PPP, the inventory of PPP, all claims which PPP may have against
the Mica members as at the effective date and all other assets of
PPP not included in the sale assets.
7.2 The Purchaser will act as agent on behalf of PPP for the marketing
and operations function of PPP in relation to the business, between
the signature date and the effective date.
7.3 All claims which PPP may have against the Mica members as at the
effective date in terms of the member contracts or otherwise shall
remain the exclusive property of PPP which shall be entitled to
collect same for its own account, provided that PPP undertakes to
deliver to the Purchaser written notice of its intention to
institute any proceedings against the Mica members or to take any
action against any of the Mica members in terms of any of the
member contracts, or to cancel any of the sale contracts.
7.4 The Purchaser will be automatically substituted in the place of PPP
in respect of all of the contracts of employment of each of the
designated employees. PPP must settle all leave, bonus and post
retirement employments benefits before the effective date.
7.5 PPP undertakes to procure that those Mica members who are listed in
the agreement as not having any agreements with Super Group, will
be de-branded prior to the effective date if and to the extent that
such members have not executed a membership agreement by the
effective date.
7.6 Super Group Trading (Proprietary) Limited, executes and delivers to
the Purchaser a suretyship and indemnity for all the obligations
arising under the agreement and termination or cancellation of the
agreement for any reason other than a breach thereof by the
Purchaser.
7.7 The Purchaser has undertaken to not re-brand any member who has
been furnished with a de-branding notice from PPP prior to the
effective date in circumstances where that member remains indebted
to the PPP.
8. JSE CATEGORISATION
In terms of the JSE Listings Requirements, the Transaction is
categorised as a Category 2 transaction.
9. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
Once the pro forma financial effects of the Transaction can be
determined, the appropriate announcement will be made by Super Group.
10. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution until the detailed
financial effects of the Transaction are published.
Sandton
3 November 2009
Financial advisor and Sponsor to Super Group
Deutsche Securities (SA) (Proprietary) Limited
Date: 03/11/2009 07:30:01 Produced by the JSE SENS Department.
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