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Yorkcor - Acquisition Of "The Bluechip" Sawmilling Assets
The York Timber Organisation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1916/004890/06)
Share code YRK ISIN ZAE000008108
("Yorkcor")
ACQUISITION OF "THE BLUECHIP" SAWMILLING ASSETS
Introduction
Sasfin Bank Limited is authorised to announce that Yorkcor has successfully
tendered for the land and buildings, and complete plant and equipment of
Bluechip Timbers Mpumalanga (Proprietary) Limited and Bluechip Industrial
Timbers (Proprietary) Limited (collectively "the Bluechip companies"), both
companies in liquidation, for R6 450 000 excluding value added tax (`the
acquisition"). The Master of the High Court consented to the acquisition on 11
November 2002.
The acquisition
The assets acquired comprise two complete sawmills located in Mpumalanga. They
have not operated since the Bluechip companies were placed in liquidation.
The acquisition complements the sawmilling activities of York Timbers Limited,
Yorkcor`s main operating subsidiary.
The R 6 450 000 consideration payable will be settled by way of R5 250 000 in
cash from Yorkcor`s own cash resources and by the sale of one of the properties,
in the Lothair district, for R 1 200 000 to Nedcor Bank Limited ("Nedcor"), a
secured creditor of the Bluechip companies. This property will be leased by
Yorkcor for R10 000 per month for an initial period of 5 years, after which
Nedcor will be entitled to either extend the lease on similar terms or "put" the
property to Yorkcor for R 1 200 000.
Financial effects of the acquisition
The assets, having been bought out of liquidation, did not earn any income
during the six month period ended 30 June 2002, being Yorkcor`s last reporting
period.
It is proposed that operations will commence during the first quarter of 2003.
By virtue of the sound operating condition and location of the plant and
equipment it is anticipated that the acquisition will provide a positive
contribution during 2003.
For the purposes of this announcement it has therefore been assumed that the
acquisition was effected on 30 June 2002 with no resultant effect on the net
asset value and the earnings of Yorkcor as at and for the six months ended 30
June 2002.
A statement of the proforma financial effects of the acquisition would not
fairly represent the financial position of Yorkcor at 30 June 2002 if it were to
be assumed that it had been implemented on 1January 2002 as only costs of
financing the acquisition but no revenue or operating costs would be accounted
for.
Rationale for the acquisition
The acquisition represents a cost effective expansion opportunity where Yorkcor
will be able to apply its extensive know-how and goodwill to revitalise these
sawmilling operations. It will reinforce Yorkcor`s prospects by way of the
expected privatisation of state forestry assets and it will enable Yorkcor to
take advantage of various other opportunities in the timber market. These
sawmills are well located to the Gauteng and Kwa Zulu Natal markets.
To set up these sawmills from grassroots would have been extremely costly.
Yorkcor is planning to make a social contribution to the region through the
creation of employment opportunities and the promotion of empowerment
enterprises. It is anticipated that this will also be a positive factor in
Yorkcor`s proposed participation in a bid to acquire the Komatiland forests.
Documentation
As this acquisition constitutes a Category 1 transaction in terms of the
Listings Requirements of the JSE Securities Exchange South Africa ("the JSE"), a
circular detailing the transaction in full and incorporating a notice of general
meeting to approve the acquisition will, subject to JSE approval, be posted to
shareholders within 28 days of the date of this announcement.
PRETORIA
13 November 2002
SPONSOR
SASFIN BANK LIMITED
Date: 13/11/2002 03:31:47 PM Produced by the JSE SENS Department
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