| Thu 20 Mar 2003, 15:19 | | DORBYL LIMITED - DISPOSAL BY DORBYL OF ITS GLOBAL |
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(Incorporated in the Republic of South Africa)
(Registration number 1911/001510/06)
Share code: DLV ISIN: ZAE000002184
("Dorbyl")
DISPOSAL BY DORBYL OF ITS GLOBAL ROOFING SOLUTIONS BUSINESS
1. THE DISPOSAL
1.1 Shareholders are advised that Dorbyl has accepted an offer by Clidet No.
441 (Proprietary) Limited ("the purchaser") for the disposal by Dorbyl of its
entire interest in its South African metal roof sheeting, tiling and cladding
business, known as "Global Roofing Solutions", which includes, inter alia,
Brownbuilt Metal Sections and HH Robertson ("GRS" or "the GRS business"), with
effect from 1 April 2003 ("the effective date") ("the disposal"). The purchaser
is a special purpose vehicle principally funded by Absa Bank Limited ("Absa"),
and owned by certain senior management of the GRS business and Absa. It is
further intended that an empowerment investor will acquire a significant
interest in the purchaser.
1.2 The disposal and the implementation thereof is subject to the fulfilment
of certain conditions precedent as described in 5 below.
2. RATIONALE FOR THE DISPOSAL
2.1 The Dorbyl Group has previously stated that it has commenced a programme
of reducing the broad variety of different businesses in which it was involved
and focusing on its core activities. In so doing, it has released cash and has
distributed additional dividends to its shareholders, thereby enhancing
shareholder value beyond the level of an undervalued share price. The disposal
of the GRS business is consistent with that strategy. While the pro forma
financial effects reflect a marginal reduction in earnings, net asset value is
positive and cash resources are enhanced.
2.2 Of further benefit to Dorbyl is that it will now be able to focus on its
two remaining major operating divisions, Dorbyl Automotive Technologies, based
in South Africa and Alpine, based in the USA. Given reasonable economic and
market circumstances, both locally and in the USA, and with further investment
and a narrower span of management attention, Dorbyl expects to optimise
performance and generate growth in these two remaining core businesses.
3. CONSIDERATION
3.1 The disposal consideration for the GRS business amounts to R107 million
("the disposal consideration").
3.2 The disposal consideration will be settled in cash as follows:
3.2.1 R90,7 million within 10 business days after the fulfilment of all
conditions precedent ("the closing date");
3.2.2 R6,3 million over a period of six months after the closing date; and
3.2.3 the balance of R10 million upon the earlier of finance for the property
holdings forming part of the GRS business being finalised or 31 March 2004.
3.3 That part of the disposal consideration reflected in 3.2.1 above will
bear interest at the average call rate ruling between the effective date and the
closing date, such interest being payable on the closing date. The R10 million
due in terms of 3.2.3 above will bear interest monthly at a rate equal to the
prime overdraft interest rate charged by Absa to its preferred clients.
4. FINANCIAL EFFECTS
4.1 The table below sets out the unaudited pro forma financial effects of the
disposal on the earnings, headline earnings, net asset value and net tangible
asset value per Dorbyl share, based on the assumptions that:
4.1.1 for purposes of the earnings and headline earnings per share
calculations:
- the disposal was effective during the interim period of six months ended
30 September 2002; and
- the whole of the disposal consideration was received on 1 April 2002 and
that such consideration was invested to earn an after-tax return of 8,35% during
the interim period ended 30 September 2002;
4.1.2 for purposes of the net asset value and net tangible asset value per
share calculations, the disposal was effected on 30 September 2002:
Unaudited(1) Pro forma
Before After Change
(cents) (cents) %
Earnings per share (2) 608,0 590,6 (2,9)
Headline earnings per share(2) 234,3 217,4 (7,2)
Net asset value per share at
30 September 2002 (3) 2 585,1 2 687,8 4,0
Tangible net asset value per share
at 30 September 2002 (3) 2 475,3 2 580,5 4,2
Notes:
(1) Extracted from the unaudited interim financial statements of Dorbyl for the
six months ended 30 September 2002.
(2) Based on a weighted average of 33,042 million shares in issue during the
interim period ended 30 September 2002.
(3) Based on 33,145 million shares in issue at 30 September 2002.
4.2 The financial effects contained in the table in 4.1.2 above have been
prepared for the purposes of illustrating how the disposal would have affected
the relevant financial ratios of Dorbyl for the historic financial period
indicated and are pro forma only. Accordingly, such effects do not necessarily
represent a true reflection of the financial effects of the disposal on Dorbyl"s
current and future earnings and net asset value.
5. CONDITIONS PRECEDENT
The disposal is subject to, inter alia, the following conditions precedent:
- the completion of a due diligence investigation of the GRS business to the
satisfaction of the purchaser and its capital providers;
- the Competition Authorities approving the disposal; and
- the purchaser procuring continuity of supply arrangements with Iscor and
Becker Paints on terms acceptable to the purchaser.
Johannesburg
20 March 2003
Sponsor and corporate adviser
PSG CAPITAL
Funder to the purchaser
ABSA
Corporate& Merchant Bank
