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Category 1 Transaction - Proposed disposal of Stefanutti Stocks’ indirect 49% shareholding in Al Tayer Stocks LLC
Stefanutti Stocks Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/003767/06)
Share code: SSKISIN: ZAE000123766
(“Stefanutti Stocks” or the “company” or the “group”)
1. CATEGORY 1 TRANSACTION - PROPOSED DISPOSAL OF STEFANUTTI STOCKS’ INDIRECT 49%
SHAREHOLDING IN AL TAYER STOCKS LLC
Stefanutti Stocks shareholders (“Shareholders”) are hereby advised that in terms of Section 9 of the JSE
Limited Listings Requirements (“Listings Requirements”), Stefanutti Stocks International Holdings
Proprietary Limited (registration number: 2005/015885/07), a wholly owned subsidiary of Stefanutti Stocks
(“the Seller”), has entered into an agreement (“the Agreement”) dated 23 June 2021 (“Signature Date”)
with Investment Trading Group LLC (or its nominee) (“the Purchaser”) to dispose of the Seller’s entire
interest, representing 49% of the issued share capital, in Al Tayer Stocks LLC (“ATS”) (“ATS Shares”) on the
terms and conditions set out in the Agreement (“the Proposed Transaction” or “the Disposal”).
2. Rationale
As previously disclosed to Shareholders in various announcements, the Restructuring Plan has been
approved by both the company’s board of directors and the Lenders and envisages inter alia the sale of
non-core assets as well as the sale of certain divisions/subsidiaries to achieve its purpose and objectives.
The purpose of the Restructuring Plan is to put in place an optimal capital structure and access to liquidity
to position the group for long-term growth, and the Proposed Transaction forms part of the Restructuring
Plan and is in furtherance of achieving its objectives.
3. Background information on ATS
ATS is a building and interior fit-out contracting company, offering a full range of services across all
industries, delivering projects in the interior fit-out & design and building sectors in the United Arab
Emirates (“UAE”). Since its formation in 1998, the business has grown significantly, undertaking interior fit-
out projects in retail, corporate training centres, hotels, healthcare facilities, luxury villas, warehouses and
industrial units. ATS also offers a broad spectrum of building services with projects being undertaken in
sports facilities, warehouses and luxury villas.
4. The Purchaser
The initial purchaser is Investment Trading Group LLC, a privately owned company based in the UAE which
is held as to its entire share capital by Mr. Ahmed H. Al Tayer, Mr. Obaid H. Al Tayer, Mr. Matar H. Al Tayer,
Dr. Tariq H. Al Tayer and Mr. Saeed H. Al Tayer, each Emirati nationals (the “Al Tayer family”). The core
financial obligations of Investment Trading Group LLC under the Proposed Transaction are guaranteed by
Al Tayer Group LLC, a privately owned company based in the UAE which is also held as to its entire share
capital by the Al Tayer family. Al Tayer Group LLC owns the remaining 51% interest in the share capital of
ATS. The Agreement also anticipates the assignment of all rights from Investment Trading Group LLC to Al
Tayer Ventures LLC once it has been incorporated. Al Tayer Ventures LLC is a UAE privately owned company
currently under incorporation, to be held as to its entire share capital by the Al Tayer family. The assignment
from Investment Trading Group LLC to Al Tayer Ventures LLC does not affect the commitments of Al Tayer
Group LLC as stated above.
5. Conditions Precedent
In terms of the Agreement the Seller gives certain warranties, undertakings and indemnities to the
Purchaser which are customary for transactions of this nature. The Proposed Transaction is also subject to
the fulfilment and/or waiver of conditions customary for transactions of this nature including:
• the shareholders resolutions of the Purchaser approving and authorising the entry into and
implementation of the Proposed Transaction having been delivered to the Seller;
• the Shareholders resolutions of the company and Seller confirming the entry into and
implementation of the Proposed Transaction having been adopted by the requisite majority of
Shareholders and a copy thereof having been notarised, legalised and attested to in accordance with
the standard required by the UAE Embassy and provided to the Purchaser;
• the group obtaining the requisite written consent of the Lenders for the implementation of the
Proposed Transaction; and
• the Seller ensuring that any regulatory and/or corporate approvals required under the applicable law
for the implementation of and entry into the Proposed Transaction are procured including, for
example, from the JSE Limited.
6. Completion date
The Proposed Transaction will, subject to fulfilment of the conditions contemplated above be implemented
on the Completion Date being the date on which the updated commercial registration reflecting the change
in shareholding of the ATS Shares from the Seller to the Purchaser is issued by the Dubai Department of
Economic Development.
7. Net assets & attributable profits
The consolidated value of the net assets of ATS at 30 June 2020 amounted to Emirati Dirham
(AED)100,6 million. The loss after tax for the year ended 30 June 2020 attributable to ATS was
AED7,7 million.
8. Purchase Consideration
The purchase consideration for the Proposed Transaction is based on the Preliminary Equity Value of ATS
less an Equity Value Adjustment ("Purchase Consideration") with a portion of the Purchase Consideration
retained by the Purchaser ("Retention Adjustment"). The Purchase Consideration may be increased with
the Equity Value Adjustment as contemplated below.
Assuming an exchange rate of AED1,00 equating to ZAR3,83 at 17 June 2021,
1. The Preliminary Equity Value is ZAR252,4 million
2. The Equity Value Adjustment is ZAR65,2 million and
3. The Retention Adjustment is ZAR99,9 million.
The initial payment of the Purchase Consideration is ZAR87,3 million payable in cash into the Seller's bank
account by way of electronic funds transfer of immediately available funds on the 8th business day
following the finalisation of the regulatory submissions required by Dubai Department of Economic
Development. The remaining portion of the Purchase Consideration shall be paid to the Seller in accordance
with the terms and conditions of the Agreement. In this regard, as is customary in the construction industry,
ATS is in the process of recovering costs and/or fees from its clients. The Equity Value Adjustment and
Retention Adjustment, and consequently the balance of the Purchase Consideration, is calculated with
reference to this recovery process. To the extent that these processes are resolved favourably, Stefanutti
Stocks' portion of the Equity Value Adjustment and Retention Adjustment shall be paid to Stefanutti Stocks
over a period of time. However, if these processes are not successfully resolved, Stefanutti Stocks' portion
of the Equity Value Adjustment and Retention Adjustment will not be payable.
9. Application of proceeds
The proceeds of the Proposed Transaction will be applied to the reduction of Stefanutti Stocks' current
funding facilities provided by the Lenders in accordance with the Restructuring Plan.
10. Categorisation
The Disposal has been categorised as a category 1 transaction in terms of the Listings Requirements and
accordingly the Disposal is required to be approved by an ordinary resolution of Shareholders.
11. Distribution of Circular
A circular containing the full details of the Proposed Transaction, incorporating a notice convening a
shareholders meeting, will be distributed to Shareholders in due course. The salient dates and times of the
Proposed Transaction, including the date of the shareholders meeting, will also be announced on the Stock
Exchange News Service at the time of distributing the circular.
12. Cautionary
In terms of paragraph 9.15 of the Listings Requirements the Company is required to issue a cautionary
announcement if all of the information required by paragraph 9.15 is not available for inclusion in this
announcement. The value of the net assets that are the subject of the Proposed Transaction and the profit
attributable to the net assets as at 31 December 2020 that are the subject of the Proposed Transaction are
still in the process of being prepared. Accordingly, shareholders are advised to exercise caution when
dealing in the Company’s securities until a further announcement is made regarding this information, which
is expected to be included in the circular to shareholders to approve the Proposed Transaction.
Johannesburg
24 June 2021
Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor to Stefanutti Stocks: Webber Wentzel
Transaction Advisor: Birkett Stewart McHendrie Proprietary Limited
Date: 24-06-2021 09:25:00
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