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Disposal Of Speciality Chemical Businesses By Aeci

Release Date: 06/12/2000 07:27:19      Code(s): AFE AFEP
AECI LIMITED
  (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
  (REGISTRATION NUMBER 1924/002590/06)
  ("AECI")
DISPOSAL OF SPECIALITY CHEMICAL BUSINESSES BY AECI
1.  INTRODUCTION
   FURTHER TO THE CAUTIONARY ANNOUNCEMENT DATED 26 OCTOBER 2000, CHASE IS
AUTHORISED TO ANNOUNCE THAT, SUBJECT TO THE FULFILMENT OF THE CONDITIONS
PRECEDENT REFERRED TO IN PARAGRAPH 5 BELOW, AGREEMENT HAS BEEN REACHED BETWEEN
AECI AND CHEMICAL SERVICES LIMITED ("CHEMSERVE"), IN TERMS OF WHICH CHEMSERVE
WILL ACQUIRE AS A SINGLE INDIVISIBLE TRANSACTION FROM AECI, EFFECTIVE 1 JANUARY
2001, AECI'S 80,1% INTEREST IN AECI COATINGS (PROPRIETARY) LIMITED ("AECI
COATINGS") AS WELL AS THE BUSINESS OPERATIONS OF INDUSTRIAL URETHANES AND
KYNOCHEM, AS GOING CONCERNS (COLLECTIVELY, "THE DISPOSAL").
   AECI WILL NOT DISPOSE OF THE BUSINESS OPERATIONS OF AECI AROMA AND FINE
CHEMICALS, AS REPORTED PREVIOUSLY IN THE CAUTIONARY ANNOUNCEMENT.
2.   TERMS OF THE DISPOSAL
   AECI WILL SELL TO CHEMSERVE ITS 80,1% INTEREST IN AECI COATINGS AND THE
BUSINESS OPERATIONS, EXCLUDING LOANS AND CASH, OF KYNOCHEM AND INDUSTRIAL
URETHANES ("THE DISPOSAL BUSINESSES"), AS GOING CONCERNS FOR AN ESTIMATED
AMOUNT OF R275 MILLION, BUT SUBJECT TO A MAXIMUM AMOUNT OF R300 MILLION. THE
FINAL AMOUNT TO BE RECEIVED PURSUANT TO THE DISPOSAL ("THE DISPOSAL
REALISATION") WILL BE DETERMINED WITH REFERENCE TO THE AUDITED NET ASSET VALUE
AT 31 DECEMBER 2000 OF THE DISPOSAL BUSINESSES PLUS INTELLECTUAL PROPERTY AND
GOODWILL OF R84 MILLION.
   THE DISPOSAL REALISATION WILL BE SETTLED THROUGH THE ALLOTMENT AND ISSUE OF
8 000 000 NEW CHEMSERVE SHARES TO BE ISSUED AT R13,00 EACH, BEING THE AVERAGE
PRICE AT WHICH CHEMSERVE SHARES TRADED ON THE JSE SECURITIES EXCHANGE SOUTH
AFRICA ("JSE") DURING THE 30-DAY PERIOD PRIOR TO THE CAUTIONARY ANNOUNCEMENT
DATED 26 OCTOBER 2000, WITH THE BALANCE OF THE DISPOSAL REALISATION BEING
SETTLED IN CASH.
3.   RATIONALE FOR THE DISPOSAL
   OVER THE PAST TWO YEARS AECI HAS SOUGHT TO STREAMLINE AND REFOCUS ITS
BUSINESS PORTFOLIO INTO MANAGED CLUSTERS OF SPECIALITY CHEMICALS, SPECIALITY
FIBRES AND MINING SOLUTIONS. THE DISPOSAL BUSINESSES FALL WITHIN THE SPECIALITY
CHEMICAL CLUSTER WHERE CHEMSERVE HAS AN ESTABLISHED RECORD OF EFFECTIVE
PARENTING OF SUCH BUSINESSES.
4.   FINANCIAL EFFECTS OF THE DISPOSAL FOR AECI
   THE TABLE BELOW INDICATES THE FINANCIAL EFFECTS OF THE DISPOSAL ON THE
ORDINARY SHARES IN AECI ("THE AECI SHARES") BASED ON UNAUDITED PUBLISHED
INTERIM RESULTS FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2000:
                                 BEFORE       AFTER        PERCENTAGE
                                 THE DISPOSAL THE DISPOSAL CHANGE
                                 (CENTS)      (CENTS)
EARNINGS PER AECI SHARE          64           64           NIL
HEADLINE EARNINGS PER AECI SHARE 73           73           NIL
NET ASSET VALUE PER AECI SHARE   1 982        1 997        1
5.   CONDITIONS PRECEDENT
   THE DISPOSAL IS SUBJECT, INTER ALIA, TO THE FULFILMENT OF THE FOLLOWING
CONDITIONS PRECEDENT:
* THE NECESSARY REGULATORY APPROVAL BEING RECEIVED FROM THE JSE;
* THE DELIVERY TO AND REVIEW BY CHEMSERVE OF THE AUDITED FINANCIAL STATEMENTS
OF THE DISPOSAL BUSINESSES FOR THE YEAR ENDING 31 DECEMBER 2000; AND
* THE APPROVAL BY THE CHEMSERVE MINORITY SHAREHOLDERS IN A GENERAL MEETING TO
ACQUIRE THE DISPOSAL BUSINESSES.
SANDTON
6 DECEMBER 2000
SPONSORING BROKER
  CHASE
  MEMBER OF THE JSE SECURITIES EXCHANGE SOUTH AFRICA



                                        
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