| Wed 15 Dec 2010, 16:18 | | KDV - Kaydav Group Limited - Termination of transaction for the sale of assets |
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KDV
KDV
KDV - Kaydav Group Limited - Termination of transaction for the sale of assets
of Castle Timbers to Swartland and new transaction for the sale of the
business of Castle Timbers to Cape Sawmills
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 2006/038698/06)
JSE code: KDV ISIN: ZAE000108940
("KayDav" or "the company")
TERMINATION OF TRANSACTION FOR THE SALE OF ASSETS OF CASTLE TIMBERS TO
SWARTLAND AND NEW TRANSACTION FOR THE SALE OF THE BUSINESS OF CASTLE TIMBERS
TO CAPE SAWMILLS
TERMINATION OF THE SALE OF ASSETS TRANSACTION
Shareholders are referred to the announcement released by the company on 30
November 2010 advising shareholders that, subject to certain conditions being
fulfilled, Sign & Seal Trading 154 (Proprietary) Limited (t/a Castle Timbers)
(Registration No. 2006/010033/07) ("Castle Timbers"), a wholly owned
subsidiary of KayDav, had 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 sale of assets transaction") under the terms and conditions of an
agreement entered into between KayDav, Castle Timbers and Swartland on 26
November 2010 ("the sale of assets agreement").
The sale of assets agreement was subject to, inter alia, the fulfilment of
certain suspensive conditions on or before 3 December 2010 (which date was
extended by the parties to 10 December 2010) and other suspensive conditions
on or before 10 January 2011.
Certain of the suspensive conditions were not timeously fulfilled on or before
10 December 2010 and accordingly the sale of assets agreement is of no further
force or effect.
NEW TRANSACTION FOR THE SALE OF THE CASTLE TIMBERS BUSINESS TO CAPE SAWMILLS
Introduction
Shareholders are advised that Castle Timbers has sold to Cape Sawmills
Properties (Proprietary) Limited (Registration No. 1998/001211/07) ("Cape
Sawmills") the business conducted by Castle Timbers ("the Castle Timbers
business") with effect from 15 December 2010, or such later date as the
parties may agree to in writing ("the effective date") under the terms and
conditions of an agreement entered into between Castle Timbers and Cape
Sawmills which agreement was finalised on 14 December 2010 ("the sale of
business agreement").
THE SALE OF THE CASTLE TIMBERS BUSINESS
Castle Timbers has sold to Cape Sawmills which has purchased the Castle
Timbers business comprising all of the assets and liabilities of Castle
Timbers (excluding certain stipulated assets and liabilities)as a going
concern with effect from the effective date for a purchase price of R11 000
000, which purchase price shall be discharged by Cape Sawmills by:
- paying the amount of R11 000 000 to Castle Timbers in cash on the
effective date;
- discharging the liabilities of the Castle Timbers business on the due
dates therefor.
The sale of business agreement became unconditional on 15 December 2010.
RATIONALE FOR THE SALE OF THE CASTLE TIMBERS BUSINESS
Castle Timbers conducts the business of producing and selling wood products
including mouldings and planed all round timber.
Significant losses have been incurred in the Castle Timbers business. The
further investment required, before Castle Timbers reaches an acceptable level
of profitability, is undesirable for KayDav.
The cash proceeds will be utilised to settle the costs of the sale of the
Castle Timbers business and will increase KayDav`s working capital.
FINANCIAL EFFECTS
The unaudited pro forma financial effects for which the board of directors of
KayDav is responsible are presented for illustrative purposes only and may not
fairly present KayDav`s financial position or results of operations following
the implementation of the transaction.
The table below sets out the unaudited pro forma financial effects of the
disposal based on the published financial results of KayDav for the six months
ended 30 June 2010.
Before After the %
disposal Change
(cents) (cents)
Earnings per share (EPS) 1.6 1.9 19
Headline earnings per share (HEPS) 1.6 2.4 52
Net asset value per share (NAV) 61.1 60.5 (1)
Net tangible asset value per share 53.4 52.8 (1)
(NTAV)
Weighted average number of ordinary 213,505 213,505
shares in issue (`000)
Number of ordinary shares in issue 184,586 184,586
(`000)
Notes / Assumptions
- The "Before" column reflects the EPS, HEPS, NAV and NTAV as disclosed in
KayDav`s interim results for the six months ended 30 June 2010.
- The "After the disposal" column reflects what the NAV and NTAV would have
been at 30 June 2010 had the transaction taken place on 30 June 2010 and
what the EPS and HEPS would have been had the transaction taken place on
1 January 2010.
- A loss on the disposal of the Castle Timbers business, after taking
transaction costs into account, of R1,1 million has been recognised and
adjusted for headline earnings purposes.
CATEGORISATION OF THE TRANSACTION
The sale of the Castle Timbers business from Castle Timbers to Cape Sawmills
is a Category 2 transaction in terms of section 9.5(a) of the Listings
Requirements of the JSE Limited.
15 December 2010
Sponsor
Java Capital
Date: 15/12/2010 16:18:01 Produced by the JSE SENS Department.
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