| Tue 30 Nov 2010, 17:42 | | KDV - Kaydav Group Limited - Disposal of assets of Castle Timbers |
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KDV
KDV
KDV - Kaydav Group Limited - Disposal of assets of Castle Timbers
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 2006/038698/06)
JSE code: KDV ISIN: ZAE000108940
("KayDav" or "the company")
DISPOSAL OF ASSETS OF CASTLE TIMBERS
INTRODUCTION
Further to the cautionary announcement published on 11 November 2010,
shareholders are advised that Sign & Seal Trading 154 (Proprietary) Limited (t/a
Castle Timbers) (Registration No. 2006/010033/07) ("Castle Timbers"), a wholly
owned subsidiary of KayDav has sold to Swartland Boudienste (Proprietary)
Limited (Registration No. 1970/016505/07) ("Swartland") certain assets including
machinery, goodwill and stock ("the sale assets") with effect from 17 January
2011 ("the disposal") under the terms and conditions of an agreement entered
into between KayDav, Castle Timbers and Swartland on 26 November 2010 ("the sale
agreement").
THE DISPOSAL
Subject to the fulfilment of certain suspensive conditions, Castle Timbers has
sold to Swartland which has purchased the sale assets with effect from 17
January 2011 ("the effective date") for an aggregate consideration of:
- R6 million; plus
- the net asset value of the machinery, being R1 770 480; plus
- the total cost of the stock to be determined by multiplying the cost price
by the quantity on hand as determined in accordance with the sale
agreement.
The purchase price plus VAT shall be paid in cash by Swartland to Castle Timbers
on the effective date.
The sale agreement is subject to the fulfilment of certain suspensive conditions
on or before 3 December 2010 including, inter alia, -
1 approval of the sale of the sale assets by Castle Timbers to Swartland
being obtained by the board of directors of each of Swartland, Castle
Timbers and KayDav;
2 that Swartland informs Castle Timbers in writing that it is satisfied with
the results of a due diligence investigation;
3 agreement being reached between the parties on the extent of the stock to
be sold by Castle Timbers to Swartland as well as the unit cost thereof,
which shall be included in the stock sold as part of the sale assets.
The sale agreement is also subject to the fulfilment of the following suspensive
conditions on or before 10 January 2011:
- that a period of at least 30 calendar days has lapsed since the publication
of the notices advertising the sale of the sale assets in terms of section
34 of the Insolvency Act, 24 of 1936, as amended;
- the passing by Castle Timbers and registration with CIPRO of a resolution
in terms of section 228 of the Companies Act, No. 61 of 1973, as amended,
authorising the sale of the sale assets by Castle Timbers to Swartland;
- to the extent that may be required in law, the unconditional regulatory
approval of the transaction by the respective regulatory authorities which
is necessary for the implementation of the sale of the sale assets in terms
of any applicable legislation.
RATIONALE FOR THE DISPOSAL
The sale assets have been utilised by Castle Timbers to produce wood products
including mouldings and planed all round timber ("the business").
Significant losses were sustained in the business operated by Castle Timbers.
The further investment required, before Castle Timbers reaches an acceptable
level of profitability, is undesirable for KayDav.
The cash proceeds from the disposal will be utilised to settle the costs of
closure of the business and will increase KayDav`s working capital.
FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
The financial effects of the disposal will be published in due course but only
after the parties have agreed on the extent and cost of the stock to be sold as
part of the sale assets, which has been included as a suspensive condition to
the sale agreement and which suspensive, condition requires to be fulfilled on
or before 3 December 2010.
Shareholders are advised to continue exercising caution when dealing in the
company`s shares until a further announcement is made.
CATEGORISATION OF THE DISPOSAL
The disposal of the sale assets is a Category 2 transaction in terms of section
9.5(a) of the Listings Requirements of the JSE Limited.
30 November 2010
Sponsor
Java Capital
Date: 30/11/2010 17:42:01 Produced by the JSE SENS Department.
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