| Thu 9 Feb 2012, 17:30 | | SOV - Sovereign Food Investments Limited - Announcement of a Category 2 |
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SOV
SOV
SOV - Sovereign Food Investments Limited - Announcement of a Category 2
transaction
SOVEREIGN FOOD INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1995/003990/06)
JSE Code: SOV
ISIN Number: ZAE000009221
("Sovereign" or "the Company")
ANNOUNCEMENT OF A CATEGORY 2 TRANSACTION
1. INTRODUCTION
Shareholders are advised that the Company disposed of a broiler farm, known
as Accurate Farm ("the Farm"), to Simile Farmers (Proprietary) Limited, a
broad-based black economic empowerment ("BEE") company ("the Purchaser"),
with effect from 31 March 2011 ("the Transaction").
Furthermore, the Purchaser entered into a contract grower arrangement with
Sovereign in terms of which the Purchaser agreed to supply broiler chickens
to Sovereign, subject to certain operational and quality requirements,
thereby further contributing to Sovereign`s BEE procurement.
2. RATIONALE FOR THE TRANSACTION
By implementing the Transaction and entering into a contract grower
arrangement with the Purchaser, Sovereign improved its BEE credentials by
increasing the Company`s BEE procurement levels as well as having reduced
its gearing position with the proceeds received from the Transaction.
3. TRANSACTION CONSIDERATION AND APPLICATION OF THE PROCEEDS
The total purchase consideration paid for the Farm was R36 025 964
("Purchase Consideration") and was settled in cash. Following the
Transaction, an amount of R29 million was utilised by Sovereign to reduce
interest bearing debt and R7 million was applied towards Sovereign`s
working capital requirements.
4. CONDITIONS PRECEDENT
All the conditions precedent to the Transaction have been fulfilled.
5. CATEGORISATION AND COMPLIANCE WITH THE JSE LIMITED LISTINGS REQUIREMENTS
("LISTINGS REQUIREMENTS")
The Transaction is classified as a Category 2 transaction in accordance
with the Listings Requirements.
The JSE Limited has been informed that the requirements for a Category 2
transaction relating to the Transaction, which should have been complied
with in March 2011, had not been met in terms of the Listings Requirements
and the matter has been dealt with accordingly. In terms of the Listings
Requirements, should an issuer enter into a Category 2 transaction the
terms thereof should be announced. This announcement is therefore published
in order to comply with the Listings Requirements.
The Transaction did not have a significant effect on the earnings, headline
earnings or net asset value of Sovereign and therefore, the pro forma
financial effects of the Transaction have not been disclosed.
Port Elizabeth
09 February 2012
Sponsor
One Capital
Date: 09/02/2012 17:30:02 Produced by the JSE SENS Department.
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