| Mon 18 Dec 2006, 12:05 | | BAW/ PPC - Barloworld/ PPC - Actions following com |
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BAW PPC
BAW PPC
BAW/ PPC - Barloworld/ PPC - Actions following completion of strategic review
Barloworld Limited
(Registration number 1918/000095/06)
JSE code: BAW
NSX Code: BWL
ISIN code: ZAE000026639
("Barloworld")
Pretoria Portland Cement Company Limited
Incorporated in the Republic of South Africa
(Registration number 1892/000667/06)
("PPC" or "the company")
JSE code: PPC
ISIN code: ZAE000005559
Joint announcement by Barloworld Limited and Pretoria Portland Cement Company
Limited ("PPC"): Actions following completion of strategic review
In the 2006 Barloworld annual report released today, Warren Clewlow, Chairman of
Barloworld, said that the Board has conducted a comprehensive review of both the
structure and strategic direction of the Group during the past year.
To that end, Barloworld and PPC announce the following strategic actions and
management changes:
Unlocking Barloworld shareholder value
Subject to shareholder and regulatory approval and other consents that might be
necessary, PPC will be unbundled from Barloworld during 2007. This will further
improve the focus of the Group and will unlock value for Barloworld shareholders
in the near term. It will also greatly enhance tradability and free-float of
PPC shares.
Addressing areas of underperformance at Barloworld
The underperformance of certain businesses has been receiving priority attention
during 2006. Action by management has already been taken in this regard as
evidenced by the sales of the Steel Tube Division and the UK and US leasing
books of Barloworld Industrial Distribution.
To improve returns further, Barloworld is currently undertaking other disposals
including part of Coatings Australia and the Scientific Division. The restricted
tender process to dispose of Melles Griot is at an advanced stage and completion
of the deal is expected in the next few months. Several options are being
considered for the Laboratory business and the chosen option will be implemented
in 2007.
Proceeds from the disposal of assets will be returned to shareholders. R1
billion emanating mainly from the recent disposals will be returned to
shareholders in an optimal manner by the end of March 2007. This will be in
addition to the Barloworld dividend of approximately R900 million for the year
ended 30 September 2006. The capital structure will be reviewed on an ongoing
basis. At all times the capital structure of the Group should take into
consideration the requirements of, and commitments to, its franchise principals.
Future leadership
At Barloworld, Tony Phillips, who has been with the Group for 39 years and CEO
for the last eight years, has decided that this is an opportune time to step
down from his position as CEO. Clive Thomson, currently CEO of Barloworld
Equipment and former Finance Director of the Group, succeeds Tony Phillips as
CEO of Barloworld. He will retain his current direct responsibilities for the
Equipment Division. The operating divisions reporting to the CEO will be run by
Andre Lamprecht (Coatings), Martin Laubscher (Motor), John Blackbeard
(Scientific) and Brandon Diamond (Industrial Distribution). Peter Surgey will be
responsible for Corporate Office and Group Administration. Don Wilson, who was
recently appointed Finance Director, will continue in that role.
At PPC, John Gomersall will continue as CEO. Following his decision to stand
down as CEO of Barloworld, Tony Phillips will also relinquish his position as
Chairman of PPC after the PPC Annual General Meeting to be held on 23rd January
2007. It is the PPC Board`s intention to appoint a black chairman thereafter.
BEE and transformation
Good progress has been made on Black Economic Empowerment and transformation at
Barloworld and PPC. Both companies are expected to finalise meaningful BEE
equity ownership transactions in the near future.
Barloworld intends concluding a BEE equity transaction involving a number of
stakeholders including Ayavuna Women`s Investments (Proprietary) Limited led by
Hixonia Nyasulu. It will also include current and future staff and management,
black non executive directors and an educational trust. Further details of the
Barloworld transaction will be announced early next year.
PPC is well advanced with its own significant BEE transaction. This will meet
the requirements of the Mining Charter and will involve lead investors, current
and future staff and management, black non executive directors, construction
industry associations and community and educational trusts. Further details will
be announced by PPC early next year.
Both of these transactions reflect the firm intentions of Barloworld and PPC, in
accordance with government guidelines, to achieve genuine broad based
empowerment and senior black management participation.
Board composition and structure
Two new non executive directors have been invited to join the Barloworld Board
in February 2007, namely Hixonia Nyasulu and Trevor Munday. Ms. Nyasulu will
assist in the transformation programme and Mr. Munday will assist in the
disposal programme and provide independent input to the management of the motor
and coatings divisions. Warren Clewlow advised that he intends to retire as
Chairman during 2007 but will oversee the implementation of the Barloworld BEE
transaction and PPC unbundling.
Future direction
Barloworld is being positioned for the future as a more focused Group comprising
market leading businesses. The Barloworld Board will continue to review the
Group structure and further unbundlings or disposals will follow in the future.
Warren Clewlow, on behalf of the Barloworld Board, thanked Tony Phillips for his
loyal and valuable service to Barloworld and PPC over many years.
A further update on the progress on these initiatives will be made at the Annual
General Meeting of Barloworld on 25 January 2007.
Enquiries:
Nicholas Williams, College Hill
011 447 3030; 083 607 0761
18 December 2006
Sponsor: JPMorgan
Date: 18/12/2006 12:05:06 Produced by the JSE SENS Department.
