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TNT
THGL
Tongaat-Hulett: - Acquisition of a 50,35% interest in Hippo Valley Estates
Tongaat-Hulett Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1892/000610/06)
Share Code: TNT
Issuer Code: THGL
ISIN: ZAE000007449
("Tongaat-Hulett" or the "Company")
ACQUISITION OF A 50,35% INTEREST IN HIPPO VALLEY ESTATES LIMITED
("HIPPO VALLEY") ("THE TRANSACTION")
1 Introduction
Shareholders are advised that Triangle Sugar Corporation Limited
("Triangle"), a wholly-owned subsidiary of Tongaat-Hulett, has entered
into binding agreements with Anglo American Corporation Zimbabwe
Limited ("AmZim") to acquire AmZim"s 50,35% stake ("the Hippo Shares")
in Hippo Valley. The Transaction will result in the disposal by AmZim
of its sugar interests in Zimbabwe.
The terms of the transaction are set out below.
2 Details of the Transaction
2.1 Rationale for the Transaction
Hippo Valley owns and operates the second largest sugar producing and
refining business in Zimbabwe and is listed on the Zimbabwe Stock Exchange
("ZSE"). Hippo Valley and Triangle have complementary operations in
Zimbabwe, adjacent to each other. The Transaction provides Tongaat-Hulett
with an opportunity to benefit from the synergies between Hippo Valley and
Triangle.
2.2 Transaction consideration
As consideration for the acquisition of the Hippo shares, Triangle will
issue shares representing a 25,3% interest in the enlarged Triangle ("the
Consideration Shares") to AmZim. Tongaat-Hulett will, through a wholly-
owned foreign subsidiary Bassieres Holding S.A., after the allotment and
issue of the Consideration Shares to Amzim, acquire the Consideration
Shares for a purchase price of US$36 million. This will be funded from
Tongaat-Hulett"s existing offshore cash resources.
2.3 Financial effects
The pro forma financial effects of the Transaction on Tongaat-Hulett"s net
asset value per share, net tangible asset value per share, historical
earnings per share and historical headline earnings per share are not
significant.
3. Conditions precedent
The implementation of the Transaction is subject to the fulfillment of the
following condition precedent:
The Transaction being unconditionally approved, or alternatively approved
subject to conditions acceptable to Tongaat-Hulett, by the Zimbabwe Reserve
Bank.
4. Related party transaction
As 50,6% of Tongaat-Hulett"s share capital is held by Anglo South Africa
Capital (Pty) Limited (of which AmZim is a wholly-owned subsidiary), the
Transaction is classified as a `small related party transaction" in terms
of s.10.7 of the JSE Listings Requirements and as such requires written
confirmation from an independent professional expert, confirming that the
Transaction is fair and reasonable to Tongaat-Hulett shareholders. Java
Capital was appointed to undertake this review and in their professional
opinion the terms of the Transaction are fair and reasonable to the
shareholders of Tongaat-Hulett. The fair and reasonable opinion statement
will be available for inspection at the Tongaat-Hulett registered office
for a period of 28 days from the date of this announcement.
It should also be noted that, as a reorganisation of Anglo American plc"s
sugar interests in Zimbabwe, the Transaction will not trigger an offer to
Hippo minorities and confirmation of this has been obtained from the
Zimbabwe Stock Exchange.
7 December 2006
Tongaat
Merchant bank and advisor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Sponsor
INVESTEC BANK LIMITED
Independent financial advisor
JAVA CAPITAL
Date: 07/12/2006 07:00:19 AM Produced by the JSE SENS Department
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