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Disposal of a property to a related party
SEARDEL INVESTMENT CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1968/011249/06
N-ordinary share code: SRN; Ordinary share code: SER
ISIN: ZAE000030144; ISIN: ZAE000029815
(“Seardel”)
DISPOSAL OF A PROPERTY TO A RELATED PARTY
1. Introduction
Seardel ordinary shareholders and N ordinary shareholders (collectively “Seardel Shareholders”) are
advised that Seardel Group Trading Proprietary Limited (“SGT”), a wholly-owned subsidiary of Seardel,
has concluded an agreement with Sactwu Properties Proprietary Limited (“Sactwu Properties”), a wholly
owned subsidiary of the Southern African Clothing and Textile Workers Union (“Sactwu”) for the sale by
SGT to Sactwu Properties of the letting enterprise as a going concern, conducted in respect of the
property situated at the corner of Bofors Circle and Losack Avenue, Epping Industria ll, Cape Town (“the
Property”), including all leases and assets, forming necessary parts of the letting enterprise (the
“Enterprise”) for a total purchase consideration (“Purchase Consideration”) of R52,2 million (the
“Proposed Transaction”).
The Property, which is a composite industrial manufacturing complex, measures approximately 2,0234
2
hectares and has a GLA of 18,391 m . It is currently tenanted by Seardel Apparel, a division of SGT
involved in the apparel manufacturing business, and a third-party tenant.
2. Rationale
The directors of Seardel have resolved to exit the Seardel Group’s apparel manufacturing businesses
through the closure of its Western Cape and KwaZulu-Natal operations and the disposal of the remainder
of its South African apparel manufacturing businesses (the “Apparel Manufacturing Business”), details
of which are set out in the circular to Seardel Shareholders dated 18 December 2013 (“Circular”).
Further to this strategy and following the disposal of the Apparel Manufacturing Business to Sactwu (or its
assignee), which is the primary tenant of the Property, SGT has entered into the agreement referred to in
paragraph 1 above in respect of the Proposed Transaction.
3. Terms of the Proposed Transaction
3.1. The Enterprise will be transferred from SGT to Sactwu Properties following the registration of
transfer of the Property into Sactwu Properties’ name (“Transfer Date”), which is expected to take
place by 30 June 2014.
3.2. Registration of transfer of the Property into Sactwu Properties’ name will be effected by SGT’s
conveyancers as soon as reasonably possible after Sactwu Properties has complied with the
provisions set out in paragraph 3.3 below and made payment to SGT’s conveyancers of all the costs
of and incidental to the registration of transfer of the Property into Sactwu Properties’ name and the
Purchase Consideration shall have been received by SGT.
3.3. Sactwu Properties and SGT will sign all documents required to be signed in connection with the
transfer of the Property and the cancellation of all bonds registered over the Property, including but
not limited to such documents required for compliance with the Financial Intelligence Centre Act and
such documents as may be required by the South African Revenue Service.
3.4. With effect from the Transfer Date:
- all risk and benefit in and to the Enterprise (including the Property) will pass to Sactwu Properties;
and
- Sactwu Properties will be liable for all rates, taxes and other imposts levied on the Property.
4. Conditions precedent to the Proposed Transaction
The Proposed Transaction is subject to the fulfilment or waiver of, inter alia, the following conditions
precedent:
4.1. the agreement in relation to the disposal of the Apparel Manufacturing Business to Sactwu (or its
assignee) becoming unconditional and being implemented in accordance with its terms. The details
of the aforementioned transaction are set out in the circular to Seardel Shareholders dated 18
December 2013;
4.2. the obtaining of the approval of the JSE Limited (“JSE”), insofar as may be necessary;
4.3. the obtaining of the consents of the bankers of Seardel to the Proposed Transaction; and
4.4. the obtaining of Competition Authority approval in terms of the Competition Act, No. 89 of 1998,
insofar as may be necessary.
5. Pro forma financial effects
The pro forma financial effects of the Proposed Transaction on Seardel’s historical earnings, headline
earnings, net asset value and net tangible asset value are not significant.
6. Categorisation and documentation
In terms of the Listings Requirements of the JSE (“Listing Requirements”), Sactwu is a related party to
Seardel as defined in the Listings Requirements as a result of its material shareholding in Hosken
Consolidated Investments Limited, Seardel’s majority shareholder. However, due to the size of the
Proposed Transaction, Proposed Transaction is classified as a small related party transaction.
Accordingly, Seardel Shareholder approval is not required in order to implement the Proposed
Transaction. An independent valuation has been performed in terms of the Listings Requirements as
detailed in paragraph 7 below.
7. Independent valuation
An independent valuation as at 1 October 2013 was carried out by Tony Freedman of David Newham
Property Management Co. Proprietary Limited, a registered professional valuer in terms of the Property
Valuers Profession Act, No. 47 of 2000. The independent valuation indicates that the Property’s fair value
is R52,2 million.
The valuation report relating to the Property will lie for inspection at Seardel’s registered office (1
Moorsom Avenue, Epping Industria ll, Cape Town, 7460) for a period of 28 days from the date of this
announcement.
Cape Town
24 December 2013
Investment bank and sponsor: Investec Bank Limited Corporate law adviser: Tabacks
Date: 24/12/2013 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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