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Update on the intended disposal of NUF, withdrawal of NUF Business Rescue Proceedings & Cautionary Announcement
NUTRITIONAL HOLDINGS LIMITED
(Registration number: 2004/002282/06)
(Incorporated in the Republic of South Africa)
(Share Code: NUT ISIN Code: ZAE000156485)
(“Nutritional Holdings” or “the Company”)
UPDATE ON THE INTENDED DISPOSAL OF NUTRITIONAL FOODS (PTY) LTD (‘NUTRITIONAL
FOODS”), WITHDRAWAL OF NUTRITIONAL FOODS BUSINESS RESCUE PROCEEDINGS AND
CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the announcements published on SENS on 24 February 2021
detailing the proposed disposal of Nutritional Foods and on 25 February 2021 in respect
of the subsequent decision to place Nutritional Foods into Business Rescue.
DISPOSAL OF NUTRITIONAL FOODS
Following the announcement on 24 February 2021 of the intended disposal of Nutritional
Foods, shareholders are advised that the Company received various expressions of
interest for the acquisition of Nutritional Foods, one of which was from Mr MM Suping, the
CEO of Nutritional Foods and a related party to Nutritional Holdings.
The offer has conditionally been accepted by the Board and the terms thereof are set
out below:
Terms:
The agreed purchase consideration for 100% of the shares in, and claims against,
Nutritional Foods is R15.2m, with a R250 000 non-refundable deposit and the provision of
a guarantee for the balance within 90 days thereafter. The R250 000 deposit still needs
to reflect in the Company’s bank account.
Conditions:
The disposal is conditional on a formal sale agreement being signed and any other
regulatory and shareholder approvals, if required.
Categorisation:
The consideration is below 10% of the market capitalisation of the Company as at date
of initial acceptance of the offer and as at the date of this announcement.
Accordingly, the disposal does not require shareholder approval nor a fairness opinion
from an independent expert.
Rationale:
The Board is focusing on sustainable, profitable and cash generating businesses and
Nutritional Foods is considered non-core to this strategy. Turnaround efforts were not
successful in 2020, primarily due to COVID-19. Shareholders are aware that a major
customer the Education Department and Schools, which had been severely hampered
due to the uncertainty of COVID-19 and the subsequent closure of schools during 2020,
which led to Nutritional Foods incurring further losses, impacting negatively on the group.
As shareholders are aware, Nutritional Foods has continuously made year on year losses
for the past seven years and thus is no longer positioned with the growth focus of the
newly reinvented Nutritional Holdings.
It is with the above in mind, that the Board, excluding Mr MM Suping who has an interest
in the disposal, has voted in favour of the disposal of Nutritional Foods as it is considered
to be in the best interest of shareholders. The focus of the group going forward will be
growing the vertically integrated CBD food products business as a JSE listed company.
Financial effects:
The financial effects of the transaction will be announced in due course once the
disposal agreement has been finalised and signed. Any other salient terms will also be
announced.
BUSINESS RESCUE PROCEEDINGS
The announcement on 25 February 2021 advised that the board of directors
unanimously agreed and passed a resolution on the 24 February 2021 to place
Nutritional Foods into Business Rescue effective 25 February 2021.
Correction to announcement and update
It is noted that in fact the Nutritional Holdings board did not pass a resolution
unanimously but by way of a majority of the Board. The Chief Executive Officer of
Nutritional Foods, Mr MM Suping, who is on the Nutritional Holdings board, was however
informed in writing on 25 February 2021 of the board’s decision to place Nutritional Foods
in to Business Rescue. The Board also advises that a resolution was not passed by the
board of Nutritional Foods to place it under Business Rescue and Nutritional Foods was
thus technically not actually placed into Business Rescue at that point in time. Instead,
Nutritional Holdings elected to launch a High Court application to place Nutritional
Foods into Business Rescue, which application was filed in the High Court of South Africa,
KwaZulu-Natal Local Division on 21 April 2021.
It is noted that the revenues generated by Nutritional Foods continue to decline and
losses continue to be incurred. However, Nutritional Foods is classified as an asset held
for sale as previously announced on 24 February 2021 and will no longer be
consolidated by Nutritional Holdings.
Withdrawal of Business Rescue proceedings
Shareholders are advised that following the board decision to enter into an agreement
for the disposal of Nutritional Foods as detailed above, there is no benefit of proceeding
with the Business Rescue proceedings and this will be withdrawn from the court.
CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution in dealing in their shares until a further
announcement is made regarding the disposal of Nutritional Foods and the publication
of the balance of the information required in terms of the JSE Listings Requirements.
By order of the Board
Durban
19 May 2021
Designated Advisor
AcaciaCap Advisors Proprietary Limited
Date: 19-05-2021 10:27:00
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