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BAW
BAW
Barloworld Limited - Sells Steel Tube Division
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(ISIN: ZAE000026639)
("Barloworld" or "the Company")
BARLOWORLD SELLS STEEL TUBE DIVISION TO A CONSORTIUM INCLUDING MANAGEMENT
AND BLACK ECONOMIC EMPOWERMENT PARTNERS FOR A CASH CONSIDERATION OF
APPROXIMATELY R480 MILLION
INTRODUCTION AND RATIONALE
Industrial brand management company Barloworld Limited has finalised the
details of the sale of its steel tube division to a consortium representing
the division"s existing management, staff, a black economic empowerment
grouping and private equity interests ("the Transaction").
Wholly-owned Barloworld subsidiary Barloworld Robor (Proprietary) Limited
("Barloworld Robor") will sell its underlying assets and businesses to
Robor (Proprietary) Limited ("Robor"). The shareholders in Robor are the
current management of the steel tube division, led by Barloworld Robor"s
CEO Mike Coward (44%), a black economic empowerment company RBR Investments
(Proprietary) (18%) whose shareholders include Yard Capital (Proprietary)
Limited led by Leslie Maasdorp, RBR Staff Investments Holdings
(Proprietary) Limited which represents senior black managers and staff of
Robor (10%), and private equity business RMB Ventures (Proprietary) Limited
(28%).
Barloworld"s Chief Executive Officer, Tony Phillips, said: "This is an
extremely satisfactory conclusion to the strategy of exiting the steel tube
division which we announced in May this year. The decision to exit the
business was made as part of our strategy to create sustainable value by
focusing on a core group of market leading businesses. Once again we have
been able to create a significant empowerment transaction while at the same
time unlocking value for our shareholders."
THE CONSIDERATION
The total cash consideration is estimated to be approximately R480 million"
which is equivalent to the net asset value of Barloworld"s steel tube
division, and will be finalised upon the determination of the quantum of
certain liabilities of Barloworld Robor at the date of closing of the
Transaction.
Barloworld will facilitate the Transaction by making interest-bearing loans
to Robor through its wholly-owned subsidiary Barloworld Capital
(Proprietary) Limited. The loans comprise a loan of approximately R125
million secured by properties and repayable over ten years and a loan of
approximately R43 million repayable mainly from the proceeds of the sale of
certain identified assets.
The proceeds of the Transaction will be used by Barloworld for its general
corporate purposes.
CONDITIONS PRECEDENT
The Transaction was subject to the fulfilment of a number of conditions
precedent, including Competition Tribunal approval. All conditions
precedent have been met.
FINANCIAL EFFECTS
The effect of the Transaction on the earnings and net assets of the Company
is not significant as defined in the Listings Requirements of the JSE
("JSE") ("the Listings Requirements").
RELATED PARTY TRANSACTION
As the ownership of Robor includes existing management and directors of
Barloworld Robor, the Transaction is a related party transaction as defined
in the Listings Requirements. Since the consideration in respect of the
Transaction is greater than 0.25% and less than 5% of Barloworld"s market
capitalisation, the Transaction is defined as a small related party
transaction in terms of the Listings Requirements. Accordingly, the opinion
of an independent professional expert acceptable to the JSE is required to
be obtained.
OPINION OF INDEPENDENT EXPERT
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited was
appointed to advise the board of directors of Barloworld on whether the
terms and conditions of the Transaction are fair and reasonable to
Barloworld shareholders. The report, a copy of which has been submitted to
the JSE and which may be inspected at Barloworld"s offices at 180 Katherine
Street, Sandton, until 5 January 2007, states that the terms and conditions
of the Transaction are fair and reasonable Barloworld shareholders.
FURTHER INFORMATION
For further information contact Mark Drewell, Head of Corporate
Communications at Barloworld:
phone +27 11 445 1204,
email mdrewell@barloworld.com
Sandton
1 December 2006
Investment bank
Standard Bank
Attorneys
Bowman Gilfillan Incorporated
Independent expert
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Sponsor
JP Morgan Equities Limited
Date: 01/12/2006 03:38:04 PM Produced by the JSE SENS Department
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