PROPER GROUP LIMITED - FURTHER CAUTIONARY ANNOUNCEMENT
PROPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/001940/06)
Share code PRO ISIN ZAE000027181
("Proper" or "the company")
FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the announcement released on 30 March 2004. The
board advises that it has decided to seek an offer of compromise in terms of
Section 311 of the Companies Act, 1973 (as amended) ("compromise offer") with
the creditors of Proper as a first step in the rescue and restructure of the
company and group. As a consequence of the capital adequacy shortfall at one of
the company"s subsidiaries, Propermark (Pty) Ltd ("Propermark"), Propermark"s
membership of the South African Futures Exchange ("SAFEX") was terminated in
terms of SAFEX rules. Shareholders are advised that 19% of the losses incurred
by the group for the 12-months ended 31 August 2003 were attributable to the
operations conducted by Propermark. Management remains in negotiations with the
creditors of Propermark to secure their support for a compromise offer to
creditors.
As part of the ongoing process of restructuring and repositioning the group, the
board has taken operational control of all the subsidiaries, with the assistance
of corporate restructuring specialist and controlling shareholder, Gandalf
Trust. At this stage, the exact outcome of the process is still uncertain, but
shareholders are advised that the conclusion of the Propermark negotiations and
the interdependent loan account structure in the group may necessitate further
compromise offers in, and/or liquidations of, other subsidiaries.
Financial effects
The financial effect of the Proper compromise offer will be to restore the
company to a solvent financial position at the date of the sanctioning of the
compromise offer.
Withdrawal of cautionary and further cautionary announcement
Shareholders are advised that the negotiations referred to in the cautionary
announcement dated 12 February 2004, were inconclusive. Shareholders are
further advised that the restructuring of the company and its subsidiaries may
have a material effect on the price at which the company"s securities trade on
the JSE Securities Exchange South Africa and that they should accordingly
continue to exercise caution when dealing in the company"s securities until a
further announcement in this regard is made.
Pretoria
7 May 2004
Sponsor:
River Sponsors (Pty) Ltd
Date: 07/05/2004 02:07:07 PM Produced by the JSE SENS Department
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