AECI AND DYNO NOBEL TO FORM A JOINT VENTURE IN ELE
AECI AND DYNO NOBEL TO FORM A JOINT VENTURE IN ELECTRONIC DETONATION
AECI LIMITED
Incorporated in the Republic of South Africa
(Registration No. 1924/002590/06)
Share code: AFE ISIN No. ZAE000000220
AECI AND DYNO NOBEL TO FORM A JOINT VENTURE IN ELECTRONIC DETONATION
AECI Limited (AECI) and Dyno Nobel ASA (Dyno Nobel) of Norway have signed heads
of agreement for the establishment of a 50:50 joint venture company, DetNet
International.
DetNet International will acquire all the existing electronic detonator systems,
technologies and associated assets of both parties. Dyno Nobel will also
contribute the initial US$7 million of the joint venture"s cash requirements, an
amount that represents the difference between the estimated value of the
business and the assets which the two companies bring to the joint venture.
DetNet International will be responsible for all future design, manufacture,
promotion and support of electronic detonator systems. Marketing and sales will
be implemented primarily through Dyno Nobel and AEL, AECI"s wholly owned
subsidiary. Christopher "Tiff" Whitehouse, currently managing director of
AECI"s DetNet Solutions (Pty) Limited, will be appointed CEO of the new entity.
The joint venture with AECI will support Dyno Nobel"s vision of being the
world"s leading commercial explosives company, with particular emphasis on
technical leadership in initiation systems and explosives products. For AECI,
the establishment of DetNet International is a major step in gaining access to
international markets for its highly specialised, world class electronic
detonators in partnership with the global leader in explosives initiating
systems.
AEL has extensive experience in the development and use of electronic detonator
systems. In 2002 it consolidated its electronic detonator interests in its
subsidiary, DetNet Solutions, which is the largest global supplier of electronic
detonator initiation systems. AEL is a leading mining solutions supplier to the
African and South African mining sector and provides a full range of commercial
explosives and initiation systems. It has annual revenues of approximately
US$300 million and operates in 14 countries in Africa.
Dyno Nobel Holding ASA and the Ensign-Bickford Company combined their commercial
explosives businesses earlier this year. The resulting entity has a major
presence in blast initiation systems and specialty blasting products, and is
also a leading global explosives company that manufactures and markets a full
range of commercial explosives and blasting services. It has revenues of nearly
US$900 million and operations in 35 countries.
The Boards of directors of both AECI Limited and Dyno Nobel ASA have given
approval for the heads of agreement and, subject to final formal agreements and
regulatory approvals, it is expected that the joint venture will commence
activities in the first quarter of 2004.
While the transaction is not expected to have a discernible effect on AECI"s
headline earnings per share in 2004, it has the potential to add material value
for AECI shareholders in the longer term.
Ends.
Sponsor
JP Morgan
Date: 10/12/2003 08:30:04 AM Produced by the JSE SENS Department
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