| Mon 14 Jun 2010, 15:00 | | KAP - KAP International Holdings Limited - Disposal by Bull Brand Foods (Pty) |
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KAP
KAP
KAP - KAP International Holdings Limited - Disposal by Bull Brand Foods (Pty)
Limited of Feedlot Enterprise
KAP International Holdings Limited
Registration Number 1978/000181/06
Share Code: KAP ISIN: ZAE000059564
("KAP" or "the Company")
DISPOSAL BY BULL BRAND FOODS (PTY) LIMITED OF FEEDLOT ENTERPRISE
1. Introduction and Rationale
Shareholders are referred to the SENS announcement dated 24 February 2009
with regard to the decision taken by the Company to discontinue the KAP
fresh meat division.
As a result of this decision, shareholders are hereby advised that Bull
Brand Foods (Pty) Limited ("the seller"), a wholly owned subsidiary of the
Company, has entered into a sale agreement with Courthiel Financing (Pty)
Limited ("the purchaser"), a related party to KAP, dated 30 June 2009 ("the
agreement"), in terms of which the seller disposed of one of its two
feedlot enterprises, operated on the premises known as the Bluff and
Taaiboschbult farm (collectively referred to as "the feedlot enterprise"),
on the terms and conditions as set out below ("the Disposal", or "the
Transaction"). Assets and liabilities acquired by the purchaser in terms of
the agreement consist of:
- The feedlot properties on which the feedlot enterprise was operated;
- The moveable property owned and operated on the feedlot properties;
- Inventory of the feedlot enterprise; and
- The employees of the feedlot enterprise, including accrued leave pay
provision.
The Disposal was considered necessary in light of the volatility of
earnings of the fresh meat division and the low return on capital invested.
2. The Transaction
2.1 The business
The feedlot enterprise is a division of the seller consisting of two
stock farms, with the extensive feedlot operation being the primary
function.
2.2 Purchase consideration
The consideration payable by the purchaser to the seller in terms of
the agreement is R18 000 000, excluding VAT in cash ("sale proceeds").
The sale proceeds will be applied to reduce debt.
2.3 Financial effects
The Disposal will have no material effect on the Company`s earnings,
headline earnings, net asset value or tangible net asset value and
accordingly, in terms of the JSE Listings Requirements, KAP is not
required to present pro forma financial effects.
3. CONDITIONS PRECEDENT
The implementation of the Transaction is not subject to any conditions
precedent and is accordingly effective from the signature date of the
agreement.
4. BACKGROUND INFORMATION ON THE PURCHASER
The purchaser is effectively 100% held by Atlas Textilverwaltungs GmbH, a
German company of which Mr CE Daun, the Chairman of KAP, is the sole
director. The purchaser is therefore deemed to be a related party to the
Company.
5. SMALL RELATED PARTY TRANSACTION
The Transaction is classified as a small related party transaction in term
of the Listing requirements of the JSE Limited ("Listing Requirements").
The listings requirements require written confirmation from an independent
professional expert, confirming that the Transaction is fair to KAP`s
shareholders. PricewaterhouseCoopers Corporate Finance (Pty) Limited, as
the independent professional expert acceptable to the JSE, has confirmed
that the Transaction is fair, and their fairness opinion is available for
inspection at KAP`s registered office until 14 July 2010.
14 June 2010
Sponsor
PSG Capital (Pty) Limited
Date: 14/06/2010 15:00:02 Produced by the JSE SENS Department.
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