ASTRAPAK LIMITED - The disposal of the business of Cinqpet and further cautionary announcement

The disposal of the business of Cinqpet and further cautionary announcement

ASTRAPAK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1995/009169/06)
Share Code: APK
ISIN: ZAE000096962
Share Code: APKP
ISIN: ZAE000087201
("Astrapak", "the Group" or "the Company")


THE DISPOSAL OF THE BUSINESS OF CINQPET AND FURTHER CAUTIONARY ANNOUNCEMENT


1. Introduction and rationale
   
   Further to the cautionary announcement released on the Stock Exchange News Service of the JSE
   Limited ("JSE") on 18 February 2015, shareholders are advised that Astrapak has entered into an
   agreement to dispose of Cinqpet (a division of Astrapak Manufacturing Holdings (Pty) Limited)
   ("Cinqpet") to Boxmore Plastics SA (Pty) Limited ("Boxmore") ("the Transaction").

   The polyethylene terephthalate ("PET") market remains highly competitive and the fundamentals
   continue to change rapidly. The trend of customers moving in-house to blow their own bottles and
   consolidating filling facilities in terms of centers of excellence continues to further impact the
   sustainability of businesses operating in this market segment. Accordingly and in line with
   Astrapak’s strategy, the Company decided to dispose of the business of Cinqpet.

   The Transaction will enhance the financial performance of Astrapak following its implementation.

2. Nature of the Transaction

   In terms of the Transaction Astrapak will be disposing of all the fixed assets, working capital and
   goodwill of Cinqpet.

3. Overview of Cinqpet

   Cinqpet is a supplier of mainly PET bottles for the non-carbonated soft drink market in
   Johannesburg and surrounds and is based in Denver, Johannesburg.

4. Purchase consideration

   The purchase price payable is based on an estimated value of R44.4m for the business as at the
   closing date of the Transaction. This represents a premium of R6.0m to the book value of the
   assets being disposed of in terms of the Transaction.

   Boxmore will be financing the acquisition of Cinqpet through a combination of existing facilities
   and cash resources and the purchase consideration will be utilised by Astrapak to reduce its
   current level of gearing.

5. The value of assets and profits attributable to the net assets which are the subject of the
   Transaction

   As at the end of the financial year 28 February 2015 the value of the net assets that are the
   subject of the Transaction were R38.4m and the business of Cinqpet had an attributable loss of 
   R7.4m for the same financial year.

6. Conditions precedent

   The Transaction is subject to the usual and normal suspensive conditions applicable to a
   transaction of this nature, namely:

   -   approval of the Transaction by the Boards of Directors of both Astrapak and Boxmore;
   -   approval of the Transaction by the Boxmore shareholders;
   -   approval of the Transaction by the financiers of Astrapak;
   -   consents of counterparties to material contracts;
   -   cession of lease agreements with existing landlords; and
   -   approval of the Transaction by the Competition Commission Authority.


7. Effective date

   The effective date of the Transaction will be the month following the fulfilment of all the
   conditions precedent, which is expected to be on or about 30 June 2015.

8. JSE categorisation

   The Transaction is categorised as a category 2 transaction in terms of the JSE Listings Requirements
   and accordingly no shareholder approval is required.

9. Further cautionary announcement

   Given the various negotiations referred to in the cautionary announcement dated 18 February
   2015, Astrapak shareholders are advised to continue exercising caution when trading in their
   Astrapak shares.


Johannesburg
25 March 2015

Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 25/03/2015 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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