| Mon 4 Nov 2002, 10:53 | | CONSIDER THE FACTS ABOUT THE GENCOR UNBUNDLING |
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Gencor Limited - Announcement
Gencor Limited
Share Code: GMF
ISIN: ZAE000013066
The following is a paid press announcement, which was published in the press on
Sunday, 3 November 2002:
"CONSIDER THE FACTS ABOUT THE GENCOR UNBUNDLING
Background
Gencor is no longer a mining house. It has become a focused investment holding
company with its main asset being a strategic stake in Impala Platinum Holdings
Limited (Implats). In 1997 Gencor transferred its non-precious metal assets to
Billiton Plc and merged its gold interests with those of Gold Fields of South
Africa to create Gold Fields Ltd. In 1998 Gencor sold to Implats all of its
platinum group metal mineral rights in exchange for new Implats shares. In
March 2000 Gencor distributed its entire holdings in Gold Fields, GFSA and
Standard Bank Investment Corporation Ltd to shareholders by way of a dividend in
specie.
On 24 June 2002, Gencor announced to shareholders its intention to distribute
the Implats shares to Gencor shareholders.
Until the end of July 2002, further unbundling was prevented by contractual
warranties given to Billiton in July 1997. These warranties have now expired,
and the Gencor board of directors has recommended that the shareholders consider
the distribution of Implats shares.
Reason for the unbundling
With the expiry of the Billiton warranties, there is no longer a rationale for
Gencor to exist in its current form and the company can proceed with the next
phase of its unbundling by distributing the Implats shares.
The proposed unbundling is not a new step or a sudden decision. It is a further
step in a process embarked on several years ago. It is a process of which
shareholders and the public have been aware for some time.
The unbundling process
Shareholders have the right to vote on the unbundling. In terms of the timetable
included in the circular sent to Gencor shareholders, the unbundling was to have
been voted on by shareholders at a general meeting on 2 October 2002. This
meeting did not take place, and will now take place at a date to be determined.
The unbundling process has been delayed, by agreement between Gencor and lawyers
acting for claimants allegedly suffering from asbestos-related diseases. In
terms of this agreement, an application for an interdict to prevent the
unbundling will be heard in the High Court in the week commencing 18 November
2002. Depending on the outcome of this application, the shareholders meeting to
consider the unbundling will either proceed forthwith as planned or be delayed.
Gencor shareholders. The truth
In considering the unbundling proposal, the Gencor board of directors has a duty
to consider the interests of all shareholders. A substantial proportion of
Gencor shares are held by institutional investors and pension funds. If the
distribution of the Implats shares is delayed or prevented, those prejudiced
will include the retired, the elderly and others who depend on these
investments.
After distribution, shareholders will hold Implats shares directly instead of
indirectly, and will benefit from the anticipated unlocking of shareholder value
by means of the elimination of the discount at which Gencor shares normally
trade relative to the value of its underlying investment in Implats. They may
also benefit, after the unbundling, by a potential re-rating of the share over
the longer term.
Gencor shareholders have the right to consider, debate and vote upon the
unbundling resolution in the light of all the considerations, including the
considerations relating to the litigation process.
Litigation
Attorneys acting for some 37 claimants have sued Gencor as one of five
defendants for damages arising in respect of alleged asbestos-related diseases.
Intimations have been received of the existence of other claims or potential
claims, but these have not been progressed with Gencor in any way.
Having taken expert advice, including the advice of senior counsel, the
directors do not believe that Gencor is liable in South African law for these
claims. The legal advice received by Gencor is that the claims should be
defended on this basis, and that these cases must now await determination by the
courts. That process is currently underway. If further claims are received,
Gencor will refer them, as other claims have been referred, for legal and other
expert opinion. This is the responsible, reasonable and prudent approach.
For more information on the Gencor unbundling, go to www.gencorinfo.co.za
THE RESPONSIBLE, REASONABLE AND PRUDENT APPROACH"
Date: 04/11/2002 07:05:00 AM Produced by the JSE SENS Department
