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TRENCOR LIMITED AND MOBILE INDUSTRIES LIMITED - PROBABLE SALE OF EQUIPMENT AND
CLOSURE OF TRENCOR"S PAROW TANK CONTAINER FACTORY
TRENCOR LIMITED
(Reg No 1955/002869/06)
("Trencor")
Share Code: TRE, TED2
ISIN: ZAE000007506, ZAE000007282
MOBILE INDUSTRIES LIMITED
(Reg No 1968/014997/06)
("Mobile")
Share Code: MOB, MBN, MOBD
ISIN: ZAE000004602, ZAE000012274, ZAE000004610
PROBABLE SALE OF EQUIPMENT AND CLOSURE OF TRENCOR"S PAROW TANK CONTAINER FACTORY
Holders of securities in Trencor and Mobile are advised that the Board of
Directors of Trencor"s wholly-owned subsidiary, Trencor Containers (Pty) Ltd,
has resolved that the equipment, machinery and intellectual property of its
stainless steel tank container manufacturing facility at Parow, Cape Town, be
sold effective 15 April 2004 to Chang Sheng Trading Co. Inc, a container
manufacturer in China. The sale does not include the land and buildings that
house the factory. The transaction is subject to certain suspensive conditions
including, inter alia, obtaining all necessary regulatory approvals and the
seller complying with its consultation obligations under the applicable labour
legislation in regard to the likely consequences for the employees if the
transaction becomes final (which would result in the probable cessation of
manufacturing activities at the Parow factory, the probable permanent closure of
the factory and the consequent retrenchment of all employees at the factory).
The proposed sale allows for the completion of all existing orders.
After the closure of the Group"s dry freight marine container factory in
Isithebe at the end of 1999, it was reported that the Parow factory would remain
open but that its future would be under constant review. Unfortunately, current
and foreseeable business conditions are such that keeping the factory open is no
longer a viable option. Despite starting the year with a good forward order
position, prices have been under severe pressure throughout the year, and more
recently the aggressive pricing policies of Chinese and other manufacturers
combined with the strength of the Rand against the US dollar has exerted further
downward pressure on demand and prices (in Rand terms). It is thus no longer
possible to keep the production line reasonably full at acceptable prices or to
achieve an acceptable return. Earlier attempts at securing a buyer for the
business as a going concern or to merge the business with other South African
tank container manufacturers have also proved unsuccessful.
Taking into account the costs and write-downs that would be associated with a
closure (which are expected to amount to approximately R14 million), as well as
the sale proceeds and prior provisions, it is not anticipated that the Group
will show any losses as a result of the probable closure. The disposal will not
have an effect on earnings apart from avoiding the continuation of losses
suffered in the past.
ON BEHALF OF THE BOARDS
NI JOWELL
CHAIRMAN
TRENCOR LIMITED
C JOWELL
CHAIRMAN
MOBILE INDUSTRIES LIMITED
27 NOVEMBER 2003
www.trencor.net
www.mobile-industries.net
Sponsor
HSBC
Date: 27/11/2003 03:00:05 PM Produced by the JSE SENS Department
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