| Wed 5 Mar 2003, 8:25 | | DNA - Announcement |
|
DNA SUPPLY CHAIN INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004875/06)
Share code: DNA ISIN: ZAE000022794
("DNA")
Announcement regarding
* an offer by Super Group Trading (Proprietary) Limited ("Super Group"), a
wholly-owned subsidiary of Super Group Limited, to purchase the core business
operations of DNA;
* a trading update; and
* a further announcement and cautionary.
The offer by Super Group
In a cautionary announcement dated 31 October 2002, DNA shareholders were
advised, inter alia, that the board of directors of DNA had entered into
negotiations with a view to introducing a strategic partner as a shareholder of
DNA to enable DNA to capitalise on opportunities in the supply chain
environment. Pursuant to these negotiations, the board of directors has received
an offer from Super Group to acquire the sale businesses as described below
("the offer").
The offer proposes that Super Group purchases the core operations of DNA
conducted through the subsidiaries of DNA known as Micor, Sherwood (including
Mining and Beverages), Auto, Streamworks, Jumpoint and including such operations
outside the Republic of South Africa as Super Group may select ("the sale
businesses").
The purchase consideration stipulated in the offer, which will be paid in
cash, is R283,8 million ("the purchase consideration").
If the offer is accepted and a sale agreement pursuant thereto is completed
("the sale agreement"), then it is proposed that DNA be
delisted, the remaining non-core operations wound-up and DNA voluntarily
liquidated. The cost of winding-up DNA, including the repayment of certain loan
obligations, will be significant and would effectively reduce monies available
for distribution to shareholders. In this respect, an initial dividend in
anticipation of DNA`s liquidation would be paid to shareholders, with a final
dividend paid on the winding-up of the entire business ("the liquidation
dividends"). Additionally, Super Group requires that 25% of the purchase
consideration be retained as a contingency amount to ensure all liabilities of
DNA are settled prior to the final winding-up of DNA. Super Group also requires
that the final winding-up of DNA will not take place within a period of 12
months after the sale agreement has been completed. At this stage, it is not
possible to calculate the amount of the liquidation dividends as the costs and
liabilities relating to the winding-up still need to be determined.
The offer is subject, inter alia, to the following conditions precedent:
* the conclusion, in writing, between DNA and Super Group of the sale
agreement;
* Super Group completing a full due diligence investigation into DNA on terms
and conditions to be agreed with Super Group and which due diligence
investigation will end no later than 28 days after commencement thereof;
* approval being obtained, to the extent necessary, of all relevant
regulatory authorities, including the competition authorities;
* written confirmation from DNA`s bankers that existing loan facilities will
continue to be made available to DNA on the same terms and conditions as those
currently enjoyed by DNA; and
* the shareholders of DNA approving the sale at a general meeting of
shareholders. In this regard shareholders should note that Super Group has
obtained undertakings from DNA shareholders representing in aggregate 50,35% of
the shares in DNA`s issued share capital, to vote in favour of the proposed
sale.
Super Group has separately agreed, in principle, to procure and make
available to DNA a working capital loan facility not exceeding R22,5 million
("the loan facility") to enable Micor to fund continued trading growth. The loan
facility is on terms and conditions usual for such facilities, save that it is
secured by the cession and pledge of DNA shares held by certain DNA directors
and key shareholders. The loan facility is not linked to or dependent upon the
offer, but in the event that the loan facility is utilised and the sale
agreement is concluded then the amount of this facility utilised by DNA and not
repaid to Super Group will be regarded as an advance on the purchase
consideration payable by Super Group in terms of the sale agreement.
Super Group will provide the Securities Regulation Panel with the appropriate
confirmation that it has sufficient financial resources available to it to
settle the purchase consideration.
EY Corporate Finance (Proprietary) Limited has been appointed as independent
adviser to the board of directors of DNA and will, in due course, issue an
opinion as to whether the terms and conditions of the offer are fair and
reasonable to the shareholders of DNA.
Trading update
DNA is expected to report a trading loss for the six-month period ended 31
December 2002. This loss is attributable, inter alia, to material foreign
exchange losses caused by the strengthening of the Rand against major foreign
currencies, the failure of the Skonkwane joint venture as well as poor trading
in certain of the business operations (other than the sale businesses) as a
result of difficult trading conditions.
Further announcement and cautionary
Once additional information becomes available a further announcement will be
made containing full terms of the offer, the financial implications thereof to
DNA and the recommendation of the board of directors of DNA.
Shareholders of DNA are accordingly advised to continue exercising caution while
dealing in DNA`s shares.
Woodmead
5 March 2003
Corporate adviser
CHARTWELL Capital Group (Pty) Limited
(Registration number 1999/027720/07)
Sponsor
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Independent adviser
Ernst & Young Corporate Finance (Pty) Ltd
(Registration number 2000/031575/07)
Attorneys
Brink Cohen Le Roux & Roodt Inc Attorneys
(Registration number 1993/004501/21
Date: 05/03/2003 08:00:02 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
