The board of directors of PSV ("the Board") is pleased to advise shareholders that PSV has entered into a Sale of Shares Agreement ("Disposal Agreement") with WPIL International Pte Ltd ("WPIL"), a private company incorporated in accordance with the laws of the Republic of Singapore and a subsidiary of WPIL Ltd, a global player in large engineered water handling pumps for the power, municipal mining and oil and gas sectors. In terms of the disposal agreement, and subject to the fulfilment or waiver of the conditions precedent set out below, WPIL will acquire from PSV 100% of the issued share capital of each of APE Pumps (Pty) Ltd ("APE Pumps") ("APE Shares"), Mather + Platt (SA) (Pty) Ltd ("Mather + Platt") ("Mather + Platt Shares"), PSV Properties 2 (Pty) Ltd ("PSV Properties 2") ("PSV Properties 2 Shares"), PSV Services (Pty) Ltd ("PSV Services") ("PSV Services Shares") and PSV Zambia Limited ("PSV Zambia") ("PSV Zambia Shares"), and 100% of all and any claims on loan account, or otherwise ("Claims"), due to PSV by APE Pumps, Mather + Platt, PSV Properties 2, PSV Services and PSV Zambia, collectively referred to hereinafter as the "Companies" or the "Pump Business", at the effective date of the disposal detailed in paragraph 1.4 below, for a total consideration of R54 million ("Disposal"). The APE Shares, the Mather + Platt Shares, the PSV Properties 2 Shares, the PSV Services Shares and the PSV Zambia Shares, which are collectively referred to hereinafter as the "Shares", together with the Claims, are referred to hereinafter as the "Interest". 1.2 Nature of the Pump Business and rationale for the Disposal PSV's Pump Business, which operates primarily in South Africa and Zambia, has been designing, manufacturing, maintaining, refurbishing and importing pumps for over five decades, and has an extensive product base in mines, municipalities, paper mills, minerals beneficiation companies, ports and harbours, water authorities, power generation utilities and petrochemical refineries throughout Africa and worldwide. The rationale for the disposal is to expunge PSV's primary debt and inject free cash flow back into the remaining subsidiaries for working capital purposes.

Purchase consideration
The total purchase consideration, payable by WPIL to PSV for the Interest, comprising the shares and the claims, is R54 million, which is payable in cash by WPIL to PSV. It is the intention of the Board to utilise the purchase consideration to reduce its current levels of debt, inject working capital into its remaining subsidiaries and pay a special dividend to its shareholders. In essence, PSV will dispose of approximately 20% of its business at a price which is about 20% in excess of its current market capitalisation.

Effective date and conditions precedent
The effective date of the disposal is the first day of the month following the date on which the last of the conditions precedent is fulfilled or waived, as the case may be. The disposal is subject to the fulfilment or waiver of the following conditions precedent:
*on approximately 24 February 2012, the boards of PSV and WPIL passing a resolution to approve the Disposal;
*on approximately 19 March 2012, PSV providing WPIL with written confirmation that Investec Bank Ltd unconditionally agrees to release all securities currently held over the Shares and/or assets of the companies upon receipt of the purchase consideration;
*on approximately 19 March 2012, WPIL delivering to PSV confirmation from its bankers that WPIL will have sufficient funds in its bank account at the closing date, being the seventh business day after the effective date, to settle the purchase consideration;
*on approximately 20 March 2012, PSV delivering to WPIL a signed copy of the companies' management accounts for the period ended 28 February 2012;
*on approximately 30 March 2012, shareholders of PSV in a general meeting passing the resolutions necessary to give effect to the disposal in accordance with the provisions of the Listings Requirements of JSE Ltd ("JSE");
*on approximately 30 March 2012, the Boards of PSV and WPIL, to the extent required, obtaining all approvals from the relevant regulatory authorities in South Africa and India, including if applicable, the Competition Commission; and
*on approximately 30 March 2012, the PSV group having undergone an internal restructure in order to transfer all of the assets owned by PSV but which, as at the date of signature of the disposal agreement, are being utilised by any of the companies to conduct their business.

Other
PSV at any time prior to the effective date, shall be entitled, but not obliged to declare, as a dividend, all consolidated audited after tax profits generated by the companies between 1 March 2011 and the effective date, which shall be paid either in cash, by offsetting any amounts due and payable to any of the companies, or in specie. The Disposal of the Pump Business, which is subject to warranties that are normal in this type of transaction, is also subject to a net asset value warranty in terms of which PSV warrants to WPIL that the consolidated audited net asset value of the Companies at the effective date will be no less than the consolidated audited net asset value of the companies as at 28 February 2011. In calculating such consolidated audited net asset value of the Companies, PSV shall be entitled to reduce PSV Zambia's inventory value as at 28 February 2011 by not more than R2.2 million. WPIL shall be entitled to use the names 'PSV Services' and 'PSV Zambia' for a period of no more than 12 months thereafter, WPIL shall procure that the aforementioned names shall be changed as not to incorporate the name `PSV` or any such similar name or trademark.

Proforma financial effects
The pro forma financial effects of the disposal of the pump business on the reported financial information of PSV will be announced to shareholders in due course.

Categorisation of the disposal and further documentation
The disposal of the pump business constitutes a category 1 disposal in terms of section 9.5(b) of the Listings Requirements of the JSE. Accordingly, a circular containing full details of the disposal of the pump business, including, inter alia, a notice to convene a general meeting of PSV shareholders in order to consider and, if deemed fit to pass, with or without modification, the resolutions necessary to approve and implement, inter alia, the disposal of the pump business, will be distributed to PSV shareholders in due course.

Cautionary announcement
Further to paragraph 1.6 above, shareholders are advised to exercise caution when dealing in PSV's securities until a further announcement, incorporating the pro forma financial effects of the disposal of the pump business, is made.







2012-02-22 13:09:08