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PPE / SPA - Purple Capital / Spanjaard - Acquisition And Withdrawal Of

Release Date: 13/04/2007 10:19:42      Code(s): PPE SPA
PPE / SPA - Purple Capital / Spanjaard - Acquisition And Withdrawal Of          
                                        Cautionary Announcement                 
Purple Capital Limited                                                          
(Incorporated in the Republic of South Africa)                                
  (Registration number 1998/013637/06)                                          
  Share code: PPE   ISIN: ZAE000071411                                          
  ("Purple Capital")                                                            
Spanjaard Limited                                                               
  (Incorporated in the Republic of South Africa)                                
  (Registration number 1960/004393/06)                                          
  Share code: SPA   ISIN: ZAE000006938                                          
1. Introduction                                                                 
Spanjaard manufactures and formulates an extensive range of specialised       
lubricants and allied chemical products for the automotive, industrial, marine, 
mining and consumer markets, both in Southern Africa as well as internationally.
In addition, a metal powder operation, located in separate premises,            
manufactures various raw materials supplied directly to manufacturers of        
friction materials such as brake pads, with the bulk of this production being   
  Purple Capital is a financial services and investment group which will make   
equity investments in established companies where it expects its input of       
merchant banking expertise will make a significant difference to the funding,   
growth prospects and ultimate shareholder value of the company.                 
  Purple Capital and Spanjaard are accordingly pleased to announce that they    
have concluded an agreement in terms of which Purple Capital will subscribe for 
2 442 850 new ordinary shares in Spanjaard at a subscription price of 260 cents 
per share, being an aggregate amount of R6,35 million for an effective equity   
stake of 29,99% post subscription for the new shares ("the specific issue"). The
subscription price for the specific issue is the weighted average price of      
Spanjaard shares over the 30 days prior to determination of the subscription    
2. Background to and rationale for the transaction                              
The Spanjaard subscription is an investment banking opportunity for Purple    
Capital. Spanjaard is a company of long standing with well established clients, 
products and geographical reach. Together with the existing board and management
of Spanjaard, Purple Capital believes there is an opportunity to unlock value   
through acquisitions in the industry, improved cost structures and operating    
  From the Spanjaard point of view the association with Purple Capital and its  
major shareholders is a catalyst and a vital enabling factor in successfully    
enabling Spanjaard to increase its presence in international markets.           
  The synergy flowing from the association with Purple Capital will enable      
Spanjaard to start benefiting fully from its listing in facilitating the growth 
for which Spanjaard feels it is now ready.                                      
The cash received by Spanjaard will be used to fund future acquisitions and   
other expansion opportunities.                                                  
  Mark Barnes, Executive Chairman of Purple Capital, will be appointed as a     
non-executive director to the Board of Spanjaard.                               
3. Financial effects of the specific issue on Spanjaard                         
  The table below sets out the financial effects on Spanjaard of the specific   
issue based on the unaudited financial statements of Spanjaard for the six      
months ended 31 August 2006. These financial effects are the responsibility of  
the directors of Spanjaard, are prepared for illustrative purposes only and,    
because of their nature, may not fairly present the financial position, changes 
in equity, results of operations or cash flows of Spanjaard after the specific  
Before the    After the                
                                           specific     specific                
                                              issue        issue     Change     
                                  Note       (cents)      (cents)        (%)    
Earnings per share                    1        10.77         7.54     (30.00)   
Headline earnings per share           1        10.11         7.07     (30.00)   
Tangible net asset value per share    2       248.74       252.10       1.35    
Net asset value per share             2       248.74       252.10       1.35    
Number of shares in issue (000`s)              5 700        8 143      42.85    
  1. On the assumption that the specific issue was effective throughout the six 
months ended on 31 August 2006 and that the subscription monies had been        
invested in an interest bearing account earning 7% before tax for 6 months;     
  2. On the assumption that the specific issue was effective on 31 August 2006. 
4. Terms and conditions                                                         
  The transaction is subject to the following conditions precedent:             
*    Confirmatory due diligence;                                             
   *    Such regulatory, shareholder and other approvals and documentation that 
are required for a transaction of this nature. In this regard, a circular to    
shareholders is being prepared and will be dispatched to shareholders in due    
   *    Robert Spanjaard, Executive Chairman of Spanjaard, has undertaken to    
vote all shares under his control (being 76,60% before the specific issue) in   
favour of the transaction.                                                      
5. Withdrawal of cautionary announcement by Spanjaard                           
  The cautionary announcement issued by Spanjaard on 10 April 2007 is hereby    
13 April 2007                                                                   
Sponsor to Purple Capital                                                       
  Bridge Capital                                                                
Sponsor to Spanjaard                                                            
Arcay Moela Sponsors (Proprietary) Limited                                    
  (Registration number 2006/033725/07)                                          
Date: 13/04/2007 10:19:41 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  

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