| Thu 3 Dec 2009, 15:45 | | ITR - Intertrading Limited - Disposal Of The Opera |
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ITR
ITR
ITR - Intertrading Limited - Disposal Of The Operating Companies Of Intertrading
And Renewal Of Cautionary Announcement
INTERTRADING LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
REGISTRATION NUMBER: 1987/004777/06
SHARE CODE: ITR
ISIN: ZAE000015566
("INTERTRADING" OR "THE COMPANY")
DISPOSAL OF THE OPERATING COMPANIES OF INTERTRADING AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcements released on SENS on 1 October and 13
November 2009 respectively, Intertrading wishes to announce that it has disposed
of its 100% interest in each of Intertrading Group (Pty) Limited, Sky Services
(Pty) Limited, Intertrading Exports (Pty) Limited and Agrilink (Pty) Limited
(collectively, "the Operating Companies"), for an aggregate cash price of R8.8
million ("the Disposal"). The purchaser of the Operating Companies is Linkit
Investments (Pty) Limited ("the Purchaser"). The shareholders of the Purchaser
are Messrs Jaco van Zijverden, Frik van Rooyen and Bernd Julicher. Messrs van
Rooyen and Julicher are directors of Intertrading and accordingly related
parties in terms of the JSE Limited ("JSE") Listings Requirements.
2. DESCRIPTION OF THE OPERATING COMPANIES
The Operating Companies are the holding entities of Intertrading`s existing
businesses, which consist of the provision of services to the agricultural
sector, including technical advice, freight forwarding and logistical services.
3. TERMS OF THE DISPOSAL
3.1 Sale
In terms of an agreement dated 2 December 2009 ("the Disposal Agreement"),
Intertrading has disposed of all the shares, comprising 100% of the issued share
capital, and shareholder claims held by it in the Operating Companies, to the
Purchaser.
3.2 Transfer of ownership
Ownership in the Operating Companies will pass to the Purchaser on the date of
the fulfilment or waiver of the suspensive conditions set out in 3.4 below, from
which date ownership, control and risk in the Operating Companies shall pass to
the Purchaser ("Transfer Date").
3.3 Purchase price
The purchase price is R8.8 million plus interest as set out below. The purchase
price will be payable on the Transfer Date. The Purchaser has, at the date of
signature of the Disposal Agreement, placed the sum of R8.8 million into an
interest bearing bank account administered by the attorneys of Intertrading for
transfer to Intertrading on the Transfer Date.
As at 1 September 2009, which is the effective date for purposes of the Disposal
("the Effective Date"), the Operating Companies have shareholder loans owing to
Intertrading of approximately R14.5 million. These loans will bear interest from
the Effective Date until repaid by the Operating Companies. In terms of the
Disposal Agreement, Intertrading Group (Pty) Limited, one of the Operating
Companies, has ceded to Intertrading its claim, amounting to approximately R3.2
million, against Rivermouth Fruit Exporters CC (in liquidation).
Following the implementation of the Disposal, the only assets of Intertrading
will be cash and claims. It is estimated that the net asset value of
Intertrading following the Disposal will be approximately R25 million, or 50
cents per Intertrading share, based on 50 million Intertrading shares in issue.
This contrasts with the closing share price on the JSE of 31 cents per
Intertrading share on 2 December 2009, the day of signature of the Disposal
Agreement.
3.4 Suspensive conditions
The Disposal is conditional on the fulfilment or waiver, where it may be
applicable, of inter alia the following suspensive conditions:
3.4.1 Approval of Intertrading shareholders by way of a special resolution
in terms of section 228 of the Companies Act 1973, as amended, and registration
of the aforesaid special resolution; and
3.4.2 Regulatory approvals, including those of the Securities Regulation
Panel ("SRP") the JSE and the Exchange Control Department of the South African
Reserve Bank.
3.5 Warranties
The Disposal is voetstoots and free of any warranties.
4. RATIONALE FOR THE DISPOSAL
In its recent results announcements the directors voiced the opinion that the
Company`s businesses were not of the size that warranted a listing on the JSE.
The Disposal will convert Intertrading into a "cash shell", which the directors
believe will enable it to attract other businesses of greater substance that
will benefit from a listing and provide shareholders with greater growth
opportunities than would have been available from the Operating Companies.
On implementation of the Disposal, Intertrading will become a "cash company", as
defined in the JSE Listings Requirements. In terms of the JSE Listings
Requirements, the Company will then have six months within which to acquire
other operating assets suitable for a listing, failing which trading in shares
in the Company will be suspended. Should another three months pass from the date
of suspension, the JSE may terminate the listing of the Company.
5. CATEGORISATION OF THE TRANSACTION
The Disposal is an "affected transaction" in terms of the Companies Act and
accordingly is subject to the Securities Regulation Code on Takeovers and
Mergers which requires, inter alia, the passing by Intertrading shareholders of
a special resolution to approve the Disposal and advice from an independent
expert to the board of the Company regarding the terms of the Disposal.
In addition the Disposal is categorised as a Category 1 related party
transaction in terms of the JSE Listings Requirements and accordingly requires,
inter alia, the approval of Intertrading shareholders in general meeting, and a
fairness opinion from an independent expert.
The directors of Intertrading, excluding Messrs van Rooyen and Julicher, have
retained BDO Spencer Steward Services (Cape) (Pty) Limited ("BDO") to advise
them whether the transaction is fair in so far as shareholders of Intertrading
are concerned. The opinion letter of BDO will be included in the circular to be
sent to shareholders regarding the Disposal.
6. FURTHER ANNOUNCEMENTS AND DOCUMENTATION
A further announcement will be made in due course showing the pro forma
financial effects of the Disposal. A circular including a notice of general
meeting is in the course of preparation and will be posted to shareholders in
due course.
7. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that until the further announcement referred to above
is made, Shareholders should continue to exercise caution in trading in their
shares
Johannesburg
3 December 2009
Sponsor and Corporate Adviser
Sasfin Capital
A division of Sasfin Bank Limited
Independent Expert
BDO
Legal Adviser
Tana van Vuuren & Associates
Attorneys, Notaries and Conveyancers
Date: 03/12/2009 15:45:01 Produced by the JSE SENS Department.
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