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SAN
SAN
Sanyati - Proposed acquisition of KZN Piling Group and further cautionary
Sanyati Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1988/002538/06)
(JSE code: SAN & ISIN: ZAE000081055)
("Sanyati" or "the company")
PROPOSED ACQUISITION OF KZN PILING GROUP AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 6 October 2006
and 24 November 2006.
Sanyati has, subject to the conditions precedent set out below, purchased all
the issued shares in and claims on loan account against African Olive Trading 69
(Proprietary) Limited trading as KZ Piling, Kwa Zulu Piling (Proprietary)
Limited, Triponza Trading 257 CC And Mega Pile CC (collectively known as KZN
Piling Group) from the shareholders of KZN Piling Group ("the Sellers") ("the
proposed acquisition"). The shareholders of the KZN Piling Group are Greg
Whittaker and John Oliver ("KZN Shareholders").
In terms of the Listings Requirements of the JSE Limited ("JSE") the proposed
acquisition is classified as a category 3 transaction.
2. RATIONALE
Sanyati is one of the larger black empowered civil engineering and construction
companies in KwaZulu-Natal. The company executes projects for a number of
private clients, parastatals and government departments. Large infrastructure
projects are tendered for and undertaken by Sanyati as main contractor and/or in
partnership with larger private or listed construction companies.
The acquisition will expand Sanyati"s service offering in its area of
operations.
3. DESCRIPTION OF KZN PILING GROUP"S BUSINESS
The KZN Piling Group is a KwaZulu-Natal based geotechnical engineering company
that focuses on piling projects in the province. The company has recently
completed the foundations for the parking garage at Durban International
Airport, the Point Bay development and residential buildings in Gateway.
4. TERMS AND CONDITIONS OF THE PROPOSED ACQUISITION
On 29 November 2006 Sanyati entered into agreements, subject to the fulfilment
of the conditions precedent in 5 below to purchase all the issued share capital
in and claims on loan account against KZN Piling Group, with effect from 1
December 2006. The purchase consideration is R 49.2 million and is subject to
profit warranties.
The purchase price is payable as follows: R 20 million in cash on the
transaction becoming unconditional, with the balance paid over two years,
subject to the meeting of profit warranties. 50% of the balance of payments
will be made in cash and the remainder payable in Sanyati ordinary shares,
issued at R1.60 per share.
Sanyati has completed a due diligence investigation on KZN Piling Group to its
satisfaction.
5. CONDITIONS PRECEDENT TO THE ACQUISITION
The proposed transaction is subject to the fulfilment of the following
conditions precedent:
* The KZN shareholders entering into employment contracts with non-compete
undertakings after termination of their employment;
* Obtaining approval from the Competition Commission.
6. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the proposed transaction will be set out in a
subsequent announcement.
7. FURTHER CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcements referred to in 1 above, shareholders are
advised to continue exercising caution when dealing in the company"s securities
until the financial effects of the proposed acquisition have been announced.
4 December 2006
Designated adviser Exchange Sponsors
Auditors PKF Chartered Accountants
Attorneys Deneys Reitz Inc.
Warning: The listing of ordinary shares in the company is on ALTx. Investors
are advised of the risks of investing in a company listed on ALTx. Investors are
advised that the JSE does not guarantee the viability or the success of a
company listed on ALTx. In terms of the Listings Requirements, the company is
obliged to appoint and retain a Designated Adviser, which is required to, inter
alia, attend all board meetings held by the company to ensure that all the
Listings Requirements and applicable regulations are complied with, approve the
Financial Director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a Designated
Adviser, it must make arrangements to appoint a new Designated Adviser within 10
business days, failing which the company faces suspension of trading of its
securities. If a Designated Adviser is not appointed within 30 days of its
suspension, the company faces the termination of its listing without the
prospect of an appropriate offer to minority shareholders.
Date: 05/12/2006 08:29:31 AM Produced by the JSE SENS Department
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