| Fri 10 Jun 2011, 15:43 | | PSV - PSV Holdings Limited - Disposal by PSV of Group Line Projects |
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PSV
PSV
PSV - PSV Holdings Limited - Disposal by PSV of Group Line Projects
(Proprietary) Limited and Further Cautionary Announcement
PSV HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/004365/06)
JSE code: PSV
ISIN: ZAE000078705
("PSV" or "the company")
DISPOSAL BY PSV OF GROUP LINE PROJECTS (PROPRIETARY) LIMITED AND FURTHER
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements, the last of
which was dated 9 May 2011, and are advised that a Sale and Purchase of
Shares Agreement has been entered into between the company, Group Line
Projects (Proprietary) Limited ("Group Line") a wholly owned subsidiary of
PSV, and Wonderstone Limited ("Wonderstone")a wholly owned subsidiary of
Assore Limited ("Assore") ("the agreement"). In terms of the agreement,
PSV will dispose of the entire issued share capital of Group Line and
assign all its rights, title and interest in and to the Intellectual
Property owned by PSV in respect of the company, to Wonderstone, on the
effective date set out in paragraph 5 below, for a consideration of R35
million ("the transaction").
2. BACKGROUND INFORMATION
Group Line offers an array of lining solutions including glass, ceramic and
plastic lining solutions used for the purpose of containment,
environmental, wear and corrosion protection.
3. RATIONALE FOR THE TRANSACTION
The transaction will provide PSV with cash to be used, foremost, to lower
debt levels and assist with cash management.
Despite Group Line experiencing their best year ever within PSV, earnings
from Group Line have tended to be uneven due to the project nature of the
business.
4. PURCHASE CONSIDERATION
The purchase consideration of R35 million will be settled in cash payable
to PSV on the effective date.
The proceeds of the disposal will be utilised to settle certain short and
long term debt and to provide PSV`s subsidiaries with additional working
capital to grow their businesses.
5. EFFECTIVE DATE
The transaction will become effective on the first day of the month
immediately following the month in which the conditions precedent set out
in paragraph 6 below have been fulfilled or waived.
6. CONDITIONS PRECEDENT
The transaction is subject to the fulfilment and/or waiver of the following
conditions precedent:
- the successful completion of a limited due diligence;
- the approval of the board of directors of Wonderstone;
- the approval of the board of directors of PSV;
- the approval of shareholders of PSV;
- regulatory approvals required;
- repayment of all claims which PSV, or any affiliate of PSV and/or the
company has against the company;
- PSV delivering to Wonderstone a copy of the performance guarantee
issued by PSV in favour of ELB Engineering Services (Proprietary)
Limited in respect of the Eskom Medupi Power Station Terrace Coal and
Ash Handling Plant Project, and Wonderstone procuring the release of
PSV from such performance guarantee;
- the unconditional waiver and release by Investec of all security held
by Investec over the assets of Group Line;
- Wonderstone concluding amended service agreements with certain key
individuals of Group Line;
- PSV and Wonderstone entering into the deed of assignment;
- PSV and Wonderstone entering into the Escrow agreement and the
agreement becoming unconditional;
- Wonderstone being satisfied that Group Line will continue to derive
the benefit of the vendor numbers issued by identified customers; and
- Wonderstone delivering to PSV written confirmation that it is
satisfied that no Material Adverse Change (as defined in the
agreement) has occurred during the interim period between the
signature and effective dates.
7. WARRANTIES
Warranties as are normal in transactions of this nature have been provided
for.
8. RESTRAINTS
In terms of the agreement PSV undertakes that it will not be interested or
engage in, directly or indirectly and whether as proprietor, partner,
shareholder, member, director, employee, agent, consultant, adviser,
financier, or member of or holding any other capacity whatsoever in
relation to any person and whether for its direct or indirect benefit or
otherwise, and whether for reward or otherwise:
- in any firm, business or undertaking which carries on either solely or
in connection with any other party, and will not itself carry on
directly or indirectly, any activity which is the same as, or which
competes with the business of the company as at the effective date;
- in any activity which may:
- draw away, canvas, entice or solicit from the business any person
who conducts business with Group Line, or any customer of, or
supplier to, Group Line;
- draw away, canvas, entice or solicit from the business any person
employed by Group Line,
for a period of 2 years from the effective date of the transaction.
9. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 1 transaction in terms of the
Listing Requirements of the JSE Limited. Accordingly, shareholders approval
of the transaction is required in terms of the Listing Requirements.
10. FINANCIAL EFFECTS AND FURTHER CAUTIONARY ANNOUNCEMENT
The financial effects of the transaction will be published in due course
and shareholders are advised to continue exercising caution when dealing in
the company`s securities until such time as the financial effects of the
transaction are published.
Johannesburg
10 June 2010
Corporate Adviser and Designated Adviser
Vunani Corporate Finance
Date: 10/06/2011 15:43:29 Produced by the JSE SENS Department.
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