| Fri 24 May 2002, 0:00 | | Global Village Holdings Ltd - Disposal Of Food Int |
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Global Village Holdings Ltd - Disposal Of Food Interest
GLOBAL VILLAGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/017632/06)
("Global Village")
SHARE CODE: GLL
ISIN: ZAE000015426
DISPOSAL OF FOOD, BEVERAGE AND RELATED BUSINESSES
INTRODUCTION
Shareholders are referred to the further cautionary announcement published
on 14 May 2002.
Sasfin Bank Limited is authorised to announce that, subject to the
fulfilment or waiver of certain suspensive conditions, Global Village
Leisure Retail (Proprietary) Limited ("GVLR"), a subsidiary company of
Global Village, has disposed of its food, beverage and related businesses
("the businesses"), and their associated business assets, as a going concern
("the disposal").
THE DISPOSAL
GVLR has reached an agreement to dispose of the business of:
Brazilian, Norwood;
Urban Caf, Norwood;
Urban Grill, Bruma;
Wimpy, Bruma;
Snack Shack Bruma (excluding the cool drink business); and
Urban Caf, Tygervalley
to the ODSI Partnership who will establish a new company ("Newco") to
acquire the businesses and their related assets. Newco will also assume
responsibility for the leases of the premises from which the businesses
operate.
The disposal, as a going concern, includes the business names, contracts,
fixed assets, goodwill, stock and trade marks and is effective from 1 May
2002.
During the financial year ended 28 February 2002 the businesses incurred a
loss of R 531 901 and over the past three years cumulative losses amounted
to R 3 467 589. In addition the fixed and intangible assets were written
down byR 4.036 million in the 2002 financial year to reflect the realistic
asset value of the businesses.
Liabilities amounting to R 123 697 were not disposed of, but remained for
the account of GVLR . These liabilities have been settled.
The consideration for the disposal is R1.00 and 25% of the issued share
capital of Newco, to be settled on fulfilment of the suspensive conditions
expected to be on or about 31 May 2002.
GVLP intends keeping its shares in Newco.
RATIONALE FOR THE DISPOSAL
The businesses, which are non-core to Global Village, have not been
profitable and have consumed considerable management resources.
The disposal provides Global Village with the opportunity to eliminate the
losses, enable management to concentrate on core activities and still allow
GVLP to participate in any recovery in the businesses under their new
management.
SUSPENSIVE CONDITIONS
The disposal is subject to the following suspensive conditions:
The landlord of the Norwood Urban caf granting a renewal of the lease in
respect of such premises and other landlords agreeing to an assignment of
the leases to Newco;
The completion of a due diligence to the purchaser`s satisfaction; and
FINANCIAL EFFECTS
The proforma financial effects of the disposal on Global Village`s earnings
per share, headline earnings per share, net asset value per share and
tangible net asset value per share are set out below:
Before(1) After(2) Change
(cents) (cents) %
Earnings per share (3.41) (2.85) 16.42
Headline earnings 4.28 5.07 18.46
per share
Net asset value 34.41 34.97 1.63
per share(3)
Tangible net asset 18.03 18.38 1.94
per share(3)
Notes:
The figures in the "Before" column are extracted from the published audited
financial results of Global Village for the year ended 28 February 2002
announced on 24 May 2002.
The figures in the "After" column reflect the proforma effect on the results
of Global Village on the assumption that the disposal was effected on 1
March 2001 and were calculated by deconsolidating the actual results and
equity accounting for the 25% share in Newco.
The fixed and intangible assets of the businesses were written down by R
4,036 million in the year ended 28 February 2002.
DIRECTORS` OPINION
The directors are of the opinion that the disposal is fair and reasonable
and that it is in the Global Village`s best interest.
Johannesburg
24 MAY 2002
Sponsor
Sasfin Bank Limited
Date: 24/05/2002 03:46:02 PM Produced by the SENS Department
