| Mon 15 Aug 2011, 8:00 | | BCK - Blackstar Group SE - Disposal of Investment |
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BCK
BCK - Blackstar Group SE - Disposal of Investment
Blackstar Group SE
Previously Blackstar Group PLC
(Incorporated in England and Wales)
(Company number SE 30)
(registered as an external company with limited liability in the Republic of
South Africa under registration number 2011/008274/10)
Share code: BCK
ISIN: GB00B0W3NL87
Disposal of Investment
Blackstar Group SE ("Blackstar" or the "Company") is pleased to announce that it
has entered into a conditional agreement for the sale of its 54 per cent
shareholding and shareholder loans in Ferro Industrial Products (Pty) Limited
("Ferro") for R200 million, to be paid in cash.
Additionally, Blackstar has entered into a forward foreign exchange contract to
convert the South African Rand proceeds to Pounds Sterling at a rate of
R10.9982:GBP1. As a result of the forward foreign exchange cover taken out by
the Company, the disposal proceeds amount to GBP18.2 million, equating to a
return on investment of 4.0 times money and a 72% IRR in Pounds Sterling over
the 2 year and 9 month holding period and is at a premium of GBP0.7 million to
the intrinsic carrying value of Ferro as of 31 December 2010.
Ferro is a manufacturer and supplier of a specialised range of powder coatings,
black and white plastic master batches as well as high quality porcelain
enamels, glaze frits and glass coatings. Blackstar completed a leverage buyout
of Ferro in January 2009, acquiring 54% of Ferro with management holding the
balance. Since investing, Ferro`s EBIT (earnings before interest and taxation)
increased significantly and the business was able to generate good cash flows
through the business cycles, enabling it to decrease its debt and enhance value.
The sale agreement is subject to the fulfilment of certain suspensive conditions
which are standard in a transaction of this nature including the approval of the
South African Competition Authorities. The transaction is expected to complete
in the second half of 2011.
Andrew Bonamour, director of Blackstar, commented, "Ferro has been a very
successful investment for the Company and the Board is pleased that it has been
able to generate a 72% IRR on this investment in Pound Sterling for
shareholders".
For further information, please contact:
Blackstar Group SE John Kleynhans +352 402 505 427
PSG Capital (Pty) Limited David Tosi +27 (0) 21 887 9602
15 August 2011
London
JSE Sponsor: PSG Capital (Pty) Limited
AIM nominated adviser and broker: Collins Stewart Europe Limited
Legal adviser: Werksmans Attorneys
Date: 15/08/2011 08:00:21 Produced by the JSE SENS Department.
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