Dorbyl Limited
(Incorporated in the Republic of South Africa)
(Registration no. 1911/001510/06)
Share code: DLV ISIN code: ZAE 000002184
("Dorbyl" or "the company")
Proposed disposal by Dorbyl of its Metals Trading Division
1. Introduction
Further to the cautionary announcement dated 4 February 2002, shareholders
are advised that an agreement has been entered into with Clidet No. 366
(Pty) Ltd, subject to the conditions precedent set out in 3 below ("the
conditions precedent"), whereby the Dorbyl Group will dispose of its entire
interest in its Metals Trading Division for an estimated cash consideration
equivalent to net asset value. The Metals Trading Division comprises the
two Baldwins Steel processing centers at Isando and Vanderbijlpark and
Stalcor, the specialist stainless steel and aluminium distributor.
2. Rationale for the Disposal
On 1 October 2001, Dorbyl issued an announcement which inter alia stated
that "... it is planned to increasingly refocus the Group, entailing a
further reduction in activities locally."
The Baldwins operation has been significantly reduced in size over the past
few years as a result of the disposal of the Automotive operations and the
sale of numerous trading branches to Metal Land franchisees. The operation
now consists of only two processing sites at Isando and Vanderbijlpark, and
in view of its reduced size is no longer regarded as core.
Stalcor, though it has always provided an excellent return in the past, is
being sold as well as it has become an integral part of the Baldwins
business.
3. Conditions Precedent
The disposal is subject to the following conditions precedent:
- the passing of the requisite resolutions by Dorbyl shareholders in general
meeting approving the disposal;
- the unconditional approval of the disposal by the Competition Commission;
- the approval, to the extent required, of the disposal by the JSE
Securities Exchange South Africa ("the JSE"), the Securities Regulation
Panel and the South African Revenue Services; and
- Various commercial considerations have not been finalised and are subject
to approval and further negotiations before the transaction becomes
unconditional.
4. Further Announcement
Details of the financial effects of the proposed disposal will be available
on finalisation of the purchase consideration. Shareholders are advised to
continue to exercise caution in dealing in their shares until such time as a
full announcement setting out further details is made.
Johannesburg
7 February 2002
Sponsor
HSBC
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