Siltek - Shareholder Update And Renewal Of Caution
Siltek Limited
(Incorporated in the Republic of South Africa)
(Registration number 1942/015386/06)
("Siltek")
Share code: STK
ISIN code: ZAE 000007126
Shareholder update and
renewal of cautionary announcement
Shareholders are advised that, although the gross margin for the South
African operations has improved compared with the first half and costs have
been reduced, group results for the year ending 30 June 2001 are expected to
reflect a substantial loss.
The main reasons for the loss are:
- the expansion of the business in prior years left Siltek with excess
capacity and a cost structure that is not suitable;
- the implementation of a new accounting system for the SDD division in
November 1999, which resulted in poor operating controls, led to stock
losses and the cost of the system had to be written off in full in March
2001 when a new system was implemented;
- the problems experienced with the Australian operations and its subsequent
closure; and
- the high level of gearing and associated interest costs.
In addition to the losses caused as a result of the above, the company's
results have been negatively impacted by the change in the method of
accounting for certain contracts.
A detailed review of the business has been undertaken and the Board has
proposed a capital restructuring plan that is currently being negotiated
with Siltek's major stakeholders. A detailed announcement in this regard
will be published as soon as further details are available.
Shareholders are also advised that the Siltek financial results for the year
ended 30 June 2001 are expected to be released at the end of September.
Shareholders are further advised to continue to exercise caution when
dealing in their shares until such time as a further announcement is made.
Midrand
24 August 2001
Rand Merchant Bank
Corporate Finance
A Division of FirstRand Bank Limited
Merchant bank and sponsor
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
