| Wed 1 Dec 2010, 8:49 | | PFG - Pioneer Foods - Confirmation of Settlement Agreement by the Competition |
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PFG
PFG
PFG - Pioneer Foods - Confirmation of Settlement Agreement by the Competition
Tribunal
Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
("Pioneer Foods" or "the Company")
CONFIRMATION OF SETTLEMENT AGREEMENT BY THE COMPETITION TRIBUNAL
1. Shareholders are referred to the announcement on SENS on 2 November 2010
("the settlement announcement") regarding the finalisation of a settlement
between Pioneer Foods and the Competition Commission (collectively referred
to as "the parties"). The settlement announcement stated that the
provisions of the Company`s settlement with the Competition Commission
("the Commission") remain subject to confirmation of the settlement
agreement ("the settlement agreement") by the Competition Tribunal ("the
Tribunal").
2. Shareholders are advised that an application for confirmation of the
settlement agreement was heard by the Tribunal on 24 November 2010 and on
30 November 2010. Following submissions from the National Treasury, the
parties agreed to amend the settlement agreement on 30 November 2010 ("the
amended settlement agreement").
3. The Tribunal made an order on 30 November 2010, confirming the amended
settlement agreement.
4. The salient terms of the amended settlement agreement, as confirmed by the
Tribunal, are materially the same as those set out in the settlement
announcement, save that:
4.1 Pioneer Foods will no longer pay to a fund to be administered by the
Industrial Development Corporation the sum of R250 million referred to in
paragraph 5.2 of the settlement announcement.
4.2 Instead the administrative penalty of R250 million referred to in paragraph
5.1 of the settlement announcement has been increased by R250 million in
the amended settlement agreement to arrive at a total administrative
penalty of R500 million. Pioneer Foods will pay this amount of R500
million to the Commission and the Commission will in turn pay this sum to
the National Revenue Fund.
5. The administrative penalty of R500 million is to be paid in three tranches.
The amounts of the tranches and the payment dates are as set out in
paragraph 5.5 of the settlement announcement. All tranches will be paid to
the Commission.
6. Pioneer Foods` commitment to reduce its gross profit by R160 million in
respect of a selection of defined wheaten flour and bread products and its
undertaking to increase its capital expenditure by R150 million, as
detailed more fully in respectively paragraph 5.4 and paragraph 5.6 of the
settlement announcement, have been confirmed by the Tribunal as part of the
amended settlement agreement.
7. Shareholders are referred to the cautionary announcements dated 30
September 2010 and 29 October 2010 and are advised that as the amended
settlement agreement has been confirmed by the Tribunal, shareholders, when
dealing with their securities, no longer need to exercise caution insofar
as it relates to matters involving the Commission. Shareholders should
note that the cautionary announcement dated 29 October 2010 is not
withdrawn insofar as it relates to the Company having approached KWV
Holdings Limited ("KWV Holdings"), with a view to possibly acquiring KWV
Holdings or concluding a similar transaction.
1 December 2010
Paarl
Sponsor
PSG Capital
Date: 01/12/2010 08:49:01 Produced by the JSE SENS Department.
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