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CKS
CROOKES BROTHERS LIMITED - ACQUISITION OF A SUGAR CANE FARMING ENTERPRISE AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
CROOKES BROTHERS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1913/000290/06)
("CBL")
Share code: CKS ISIN: ZAE000001434
ACQUISITION OF A SUGAR CANE FARMING ENTERPRISE AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement dated 1 August 2003, the directors of CBL
are authorised to announce that CBL has acquired from the Trustees of the Charl
Senekal Suiker Trust, the going concern farming enterprise conducted on, and
inclusive of, the immovable property described as The Farm Seekoegat 417, JU
Mpumalanga, in extent 822,5761 hectares.
2. RATIONALE
The acquisition of the Seekoegat farm is expected to provide the following key
benefits to CBL:
Enhance CBL"s strategic objective of producing the highest quality primary
agricultural products in the most efficient and cost effective manner;
To maintain sugar cane production as one of its core products;
As the farm is adjacent to CBL"s existing Komatipoort farming operations, it can
to a large extent be conducted on a marginal costing basis;
The farm also adjoins the Transvaal Suiker Beperk ("TSB") Komati sugar mill and
therefore cane haulage costs are minimal in comparison to industry averages; and
Make an immediate positive impact on CBL"s earnings.
3. THE TRANSACTION
The salient features of the transaction are as follows:
The effective date of the acquisition is 1 September 2003;
The property, including all buildings, dams and other improvements thereon, is
sold voetstoots or as it now stands;
The vehicles, irrigation and other equipment, as detailed in the acquisition
agreement are sold voetstoots;
The total purchase price of R30 million is for immovable and movable assets
acquired at net asset value. Accordingly, no goodwill is attributable to the
acquisition. The purchase consideration is payable in cash on the date of
registration of transfer pursuant to the acquisition agreement and bears
interest from 15 September 2003 to the date of payment at 3% below the prime
overdraft rate charged by BOE Bank Ltd;
The purchase consideration will be funded by a short term credit facility
granted by FirstRand Bank Ltd of up to a limit of R24 million. The balance of
the consideration will be funded from CBL"s existing cash resources;
The farming enterprise has 661,5 hectares of sugar cane lands registered with
the TSB Komati sugar mill and the delivery rights are included in the
acquisition agreement;
The Seekoegat property is entitled to water rights totaling 340,8 hectares and
these water rights form part of the acquisition agreement. The seller also
warrants that the dam on the property is registered with the Department of Water
Affairs and has a capacity of not less than
one million cubic metres; and
The farming employees, as detailed in the acquisition agreement, are considered
as part of the "going concern" and CBL shall be placed in the shoes of the
seller in respect of the employment contracts of the said employees. The seller
warrants that all monies owing to these employees will be paid to them on the
effective date.
4. CONDITIONS PRECEDENT
The transaction is subject to the fulfilment of the following conditions
precedent:
The approval of the transaction by the Land Claims Commissioner in terms of
Clause 11(7)(a) of the Restitution of Land Rights Act, No.22 of 1994, which
approval has now been granted; and
The approval of the transaction, as required in terms of the Competition Act
(No. 89 of 1998).
5. FINANCIAL EFFECTS
The pro forma financial effects of the transaction on CBL"s earnings, net asset
value, headline earnings and net tangible asset value per share for the year
ended 31 March 2003 are not material.
6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement dated 1 August 2003 is hereby withdrawn.
Shareholders no longer need to exercise caution when dealing in their
securities.
7. DOCUMENTATION
A circular containing full details of the transaction will be posted to CBL
shareholders within 28 days from the date of this announcement.
RENISHAW
14 August 2003
Sponsor Transactional Sponsor
Sasfin Corporate Finance Deloitte & Touche Sponsor
(a division of Sasfin Bank Services
Limited) (Registration number
1996/000034/07)
Date: 14/08/2003 04:00:52 PM Produced by the JSE SENS Department
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