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Profurn Limited - Further Cautionary Announcement
Profurn Limited
(Registration number 1968/015363/06)
Share code PON ISIN ZAE000016481
("Profurn")
Further cautionary announcement
1. Introduction
Further to the cautionary announcement dated 19 June 2002, Rand Merchant
Bank, a division of FirstRand Bank Limited is authorised to announce that:
an interim agreement has been entered into between JD Group Limited ("JD
Group"), FirstRand Bank Limited ("FirstRand") and Profurn ("interim
agreement") in terms of which JD Group will provide selected retail
expertise and services to Profurn; and
a memorandum of understanding ("disposal memorandum") has been entered into
between JD Group and FirstRand regarding the sale of the businesses of
Profurn to JD Group or its nominees ("the proposed transaction").
2. Interim agreement
The Interim Agreement which has been considered and noted by the competition
authorities and forms part of the financial rescue of Profurn by FirstRand,
will commence on 28th of June 2002 and will continue to be in force until
the final adjudication of the application to the competition authorities by
JD Group and Profurn in respect of the proposed transaction.
The Interim Agreement will not affect the authority of the Profurn Board and
the overall responsibility for the business of Profurn will remain with the
Profurn Board and FirstRand as the major shareholder of Profurn. JD Group
will be paid a fee for services rendered in terms of this agreement.
3. Disposal memorandum
The purchase consideration shall be a maximum of 54.2 million JD Group
shares and shall be adjusted for a deterioration in Profurn`s operating
performance between 1 January 2002 and 30 June 2002 and any material
undisclosed liabilities. An audit of Profurn will be performed for this
period.
The proposed transaction will be structured in the most optimal manner and
will be subject to the fulfillment of the conditions precedent referred to
in paragraph 7.
4. Foreign investor
FirstRand has entered into discussions with a foreign investor to acquire a
material portion of FirstRand`s eventual shareholding in JD Group as a
result of the proposed transaction.
5. Rationale
FirstRand became the majority shareholder of Profurn as a result of
underwriting the Profurn rights offer during June 2002. As part of the
restructuring of Profurn, and with a view to concluding the proposed
transaction, requested JD Group to provide selected retail services to
Profurn on an urgent basis.
The board of Profurn has considered the proposed transaction and is of the
opinion the proposed transaction will provide stability to the stakeholders
in Profurn.
6. Undertaking from FirstRand
FirstRand, which holds 78.8% of Profurn`s issued share capital, has
undertaken to vote in favour of any resolutions required to implement the
proposed transaction.
7. Conditions precedent
The proposed transaction is conditional upon, inter alia, the following:
- approval of the necessary ordinary and special resolutions by the
requisite majority of Profurn and JD Group shareholders at their respective
general meetings relating to the proposed transaction; and
- approval of the revelant stock exchanges, the Securities Regulation Panel,
the competition authorities and other regulatory authorities that may be
required; and
- the granting of specified banking facilities to JD Group by one or more of
the major South African banks.
Should the conditions to the proposed transaction not be fulfilled, Profurn
and its controlling shareholder, FirstRand, will reconsider their positions,
which will in all likelihood involve the realisation of the underlying net
assets of Profurn at a price related to the recently concluded rights offer.
8. Further cautionary announcement and documentation
The relevant documentation, including the terms of comprehensive agreements
to be concluded, and further announcements will be communicated after the
competition authorities have issued a ruling regarding the proposed
transaction. Shareholders are therefore advised to continue to exercise
caution in dealing in their Profurn shares until a further announcement is
published.
9. Changes in the board of directors
Messrs GB Rubenstein and MB Hacker have resigned from and Messrs MT Lategan
and ME Keyser have been appointed to the board of Profurn.
Merchant bank Sponsor Legal adviser Independent
Rand Merchant Grant Thornton Fluxmans adviser to the
Bank Kessel attorneys board
Feinstein PSG Investment
Corporate Bank Holdings
Sponsors (Pty) Limited
Ltd
Date: 27/06/2002 08:00:04 AM Produced by the SENS Department
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