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Trading Statement, Acquisition By Ububele Agri Proprietary Limited Of A 51% Shareholding In Turf-Ag Products
Ububele Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/011074/06)
Share code: UBU
ISIN Code: ZAE000140182
(“Ububele” or “the Company”)
TRADING STATEMENT, ACQUISITION BY UBUBELE AGRI PROPRIETARY LIMITED
OF A 51% SHAREHOLDING IN TURF-AG PRODUCTS PROPRIETARY LIMITED AND
CAUTIONARY ANNOUNCEMENT
A) TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited
(“JSE”), a listed company is required to publish a trading
statement as soon as it becomes aware that the financial
results for the next period to be reported on will show a 20%
or more difference from those of the previous corresponding
period.
Ububele hereby advises that a reasonable degree of certainty
exists that, for the six months ended 31 December 2012:
• attributable earnings/(loss) per share from all operations
will be between 1.41 cents and 4.11 cents or between
110.4% to 130.4% higher than that for the six months ended
31 December 2011.
• headline earnings per share from all operations will be
between 1.27 cents and 1.73 cents or between 24.8% to
44.8% lower than that for the six months ended 31 December
2011; and
• attributable earnings per share from continuing operations
will be between 2.43 cents and 3.13 cents or between 12.1%
to 31.8% lower than that for the six months ended 31
December 2011;
• headline earnings per share from continuing operations
will be between 0.94 cents and 2.12 cents or between 64.2%
to 84.2% lower than that for the six months ended 31
December 2011;
The financial information included in this trading statement
has not been reviewed or reported on by the auditors of
Ububele.
B) ACQUISITION BY UBUBELE AGRI PROPRIETARY LIMITED OF A 51%
SHAREHOLDING IN TURF-AG PRODUCTS PROPRIETARY LIMITED
1. THE ACQUISITION
Shareholders are hereby advised that Ububele Agri Proprietary
Limited (“Ububele Agri”), a subsidiary of the Company,
together with Messrs Wilhelm de Wet (“de Wet”) and Albert
Lintvelt (“Lintvelt”)(collectively “the Purchasers”), have
entered into a sale of shares agreement (“the Agreement”)
with Mr Andries Willem Stefanus du Toit (“du Toit”) on behalf
of the Willie Du Toit Trust (“the Seller”), in terms of which
the Purchasers will acquire 100% of the issued share capital
in Turf-Ag Products Proprietary Limited (“Turf-Ag”) and all
rights, title and interest to Seller’s shareholder loans in
Turf-Ag (“the Acquisition”) from the Seller.
In terms of the Acquisition, the Purchasers will acquire the
following interests in Turf-Ag:
• Ububele Agri – 51%;
• de Wet – 24.5%; and
• Lintvelt – 24.5%.
2. BUSINESS CARRIED ON BY TURF-AG
Turf-Ag imports and distributes agricultural and turf
irrigation equipment. Turf-Ag operates throughout South
Africa and supplies products to the agriculture and turf
market. The company holds the distribution rights to the
well-known American irrigation brand, Hunter.
3. EFFECTIVE DATE OF THE ACQUISITION
The effective date of the Acquisition is 1 April 2013.
4. RATIONALE FOR THE ACQUISITION
The rationale for the Acquisition is that it will add
complementary products to the basket of products currently
supplied to Ububele clients. In addition, Ububele is in the
process of installing approximately 100 weather stations
throughout South Africa over a three year period, to provide
its clients with accurate, up to date weather information.
Ububele considers water management to be a critical future
resource focus area in Africa. With its new investment into
water management and irrigation, Ububele will enable its
clients to farm more scientifically and more effectively.
5. PURCHASE CONSIDERATION
The total consideration payable by the Purchasers to the
Seller for the Acquisition is the sum of R6 600 000, payable
in cash (“the Purchase Consideration”).
Ububele Agri’s portion of the Purchase Consideration, for its
effective 51% shareholding in Turf-Ag, is R3 093 080.13.
6. CONDITIONS PRECEDENT
The Acquisition is subject to the following conditions
precedent that has not been fulfilled:
i) by no later than close of business on 25 March 2013,
Messrs Wilhelm de Wet and Albert Lintvelt shall have
been granted a loan for the amount of their portion of
the Purchase Consideration by First National Bank;
ii) Within five business days from the Signature Date, the
Seller will deliver to the Purchasers a certified copy
of a resolution of the trustees for the time being of
the Seller:
(a) approving the terms and conditions of the sale
contemplated by the Agreement;
(b) confirming and ratifying the authority of the
person who signed the Agreement; and
(c) confirming and accepting that the Seller is bound
by the terms and conditions of the Agreement;
iii) within ten business days of the Signature Date each of
the counterparties to the Consent Contracts will approve
in writing unconditionally, or subject to conditions
acceptable to the Purchasers in their sole discretion,
the transactions contemplated in the Agreement; and
iv) within five business days of the Signature Date (or by such
later date as the Parties may agree in writing), the Seller
will deliver to the Purchasers a signed restraint of trade
agreement.
7. GUARANTEES AND WARRANTIES
The Purchaser will endeavour to procure the release of the
Seller and du Toit from the suretyships, guarantees or other
acts of intercession (“Guarantees”) that have been provided
in respect of Truf-Ag. The Seller and/or du Toit have
provided Guarantees in the amount of US$451 935 to Hunter
Industries Incorporated (“Hunter”) for the supply on credit
of various irrigation products (“the Hunter Guarantees”). The
Seller and du Toit have agreed to keep the Hunter Guarantees
and the security provided in place until 29 July 2015.
In addition to the Hunter Guarantees, Turf-Ag has an existing
current credit amount with Hunter, which the Purchasers will
endeavour to procure the release of the Seller and du Toit
from any obligation to Hunter in this regard.
Warranties as are normal in transactions of this nature have
been provided by the Seller, to the Purchasers.
8. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Acquisition will be
released following the publication of the interim results for
the six months ended 31 December 2012. It is anticipated that
the interim results will be released on SENS on or about 20
March 2013.
9. CATEGORISATION OF THE TRANSACTION
The Acquisition is classified as a Category 2 transaction in
terms of the Listings Requirements of the JSE.
10. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution when dealing in
the Company’s securities until a full announcement regarding
the pro forma financial effects in relation to the
Acquisition is made.
15 March 2013
Cape Town
Designated Adviser
PSG Capital
Date: 15/03/2013 12:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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