Disposal By Otk Limited Of Its Maize Milling Busin
OTK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/004030/06)
("OTK")
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DISPOSAL BY OTK LIMITED OF ITS MAIZE MILLING BUSINESS
1 Introduction
Shareholders are advised that OTK Limited, a wholly owned subsidiary of OTK,
has successfully concluded negotiations to dispose of its maize milling
business ("the business") as a going concern to Pride Milling Company
(Proprietary) Limited ("Pride") ("the disposal"), a company owned by
management of the business and Absa Bank Limited ("Absa"), with effect from
1 March 2001 ("the effective date").
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2. Rationale for the disposal
The disposal is in line with OTK's stated strategic intention of becoming a
service organisation driven by intellectual capital that will enable OTK to
deploy its capital in higher yielding assets, increase its return on capital
and continue to create value for its shareholders.
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3. Terms of the disposal
In terms of the disposal:
the total purchase price is R100 790 205 (excluding certain raw materials);
R42 565 742 of the purchase price will be paid on 31 July 2001 being the
last date for he fulfilment of the suspensive conditions set out in 5 ("the
fulfilment date"); R3 224 463 six months after the fulfilment date; R30 000
000 on the date of transfer of the immovable properties of the business from
OTK Limited to Pride ("the transfer date"); and R25 000 000 payable 12
months after the transfer date.
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4. Financial effects of the disposal
The disposal will not have a material effect on the earnings or net asset
value of OTK.
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5. Suspensive conditions
The disposal is subject to, inter alia, the fulfilment of the following
suspensive conditions :
approval by the Competition Authorities; and the conclusion of various
agreements, including service, supply and agency agreements between OTK
Limited and Pride.
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Bethal
23 May 2001
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Corporate advisor and sponsor to OTK
Brait
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Corporate advisor to Pride
ABSA Corporate Bank, Corporate Finance (Registration number 1986/004794/06)
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