ASTRAPAK LIMITED - Disposal of the Business of East Rand Plastics

Disposal of the Business of East Rand Plastics

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")

DISPOSAL OF THE BUSINESS OF EAST RAND PLASTICS

1. Introduction & Rationale

   Astrapak has today entered into agreements ("Transaction Agreements") to dispose of
   East Rand Plastics (a division of Astrapak Manufacturing Proprietary Limited) ("East Rand
   Plastics") and the property occupied by East Rand Plastics ("the Property") to Transpaco
   Limited ("Transpaco") ("the Transaction").

   The decision to dispose of East Rand Plastics accords with Astrapak's strategic objective
   to focus on operations of scale within the food, beverage, personal care, pharmaceutical
   and petrochemical markets.

2. Overview of East Rand Plastics

   East Rand Plastics operates as a manufacturer of polyethylene flexible packaging
   materials predominantly active in the production of refuse bags. The business also has the
   ability to produce multi-layered industrial film and tubing. The majority of its products are
   marketed through all major national retail stores in South Africa under its own brand Garbie
   and individual retailer house brands.

   East Rand Plastics was devastated by a fire in January 2013 and the business was
   downsized significantly post the rationalization of Astrapak's Flexible Division in 2014. The
   insurance proceeds from this event were retained and applied mainly to reduce the net
   gearing position of Astrapak.

3. Nature of the Transaction

   In terms of the Transaction Agreements, Astrapak will dispose of all the fixed assets,
   including the associated long-term liabilities, inventory and goodwill, of East Rand Plastics
   ("the Business"), as well as the Property in Vulcania Springs, from which the business of
   East Rand Plastics currently operates.

4. Disposal consideration

   The disposal consideration in respect of the Transaction is based on an estimated value of
   R77.5m as at the closing date for the Business and R14.0m for the Property, representing
   an aggregate cash consideration for the Business and the Property of R91.5m. This
   represents a premium of R33.2m to the book value of the total net assets being disposed
   of in terms of the Transaction. Transpaco will further assume an estimated R13.2m in long
   term liabilities associated with the fixed assets being disposed of in terms of the
   Transaction.

   Transpaco will be financing the Transaction through a combination of existing facilities and
   cash resources and the proceeds will be utilised by Astrapak to reduce its current level of
   gearing.

5. The value of the net assets and the profits attributable to the net assets

   As at the financial year ended 28 February 2015, the value of the total net assets,
   including the Property, that are the subject of the Transaction was R54.3m. The Business
   generated turnover of R188.5m and had an attributable profit of R9.4m for the financial
   year ended 28 February 2015.

6. Conditions precedent

   The Transaction is subject to the following conditions precedent:

   -   approval of the Transaction by the financiers of Astrapak;
   -   consents of counterparties to material contracts: and
   -   approval of the Transaction by the Competition Commission Authority.

7. Effective date

   The effective date of the Transaction will be the first day of 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 a category 2 transaction in terms of paragraph 9.5(a) of the JSE Limited
   Listings Requirements and accordingly no shareholder approval is required.

9. Cautionary announcement

   Shareholders are referred to the renewal of cautionary announcement released on the
   Stock Exchange News Service on 25 March 2015. Given the various negotiations referred
   to therein, Astrapak shareholders are advised to continue exercising caution when trading
   in their Astrapak shares.

Johannesburg
31 March 2015

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

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