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Disposal of Immovable Property and the Fruit Farming Business Conducted thereon to Witzenberg Properties Pty Ltd
CROOKES BROTHERS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1913/000290/06)
Share code: CKS
ISIN: ZAE000001434
(“Crookes Brothers” or “the Company”)
DISPOSAL OF IMMOVABLE PROPERTY IN THE WESTERN CAPE AND THE DECIDUOUS FRUIT
FARMING BUSINESS CONDUCTED THEREON, AS A GOING CONCERN, BY CROOKES BROTHERS
(SOUTH AFRICA) PROPRIETARY LTD, A WHOLLY OWNED SUBSIDIARY OF THE COMPANY, TO
WITZENBERG PROPERTIES PROPRIETARY LIMITED (“WITZENBERG” OR THE "PURCHASER")
1. INTRODUCTION
Crookes Brothers’s shareholders (“Shareholders”) are advised that on 26 May 2023 (the “Signature Date”)
the Company via its subsidiary, Crookes Brothers South Africa Proprietary Limited (the “Seller”), concluded the
commercial terms of an agreement (the “Disposal Agreement”) in terms of which it will, subject to the fulfilment
of certain suspensive conditions, as one indivisible transaction, dispose of certain immovable properties
(collectively referred to as “the Property”) and the deciduous fruit farming business conducted thereon (“the
Business”) to the Purchaser, as a going concern (the “Disposal”). The aggregate Disposal consideration is
approximately R200 million, as detailed in paragraph 4.3 below.
Witzenberg is not a related party of the Company. The beneficial owner of Witzenberg is the Pieter Johannes
Graaff Family Trust.
2. RATIONALE AND BACKROUND TO THE DISPOSAL
Crookes Brothers is a South African public company with agricultural operations in the KwaZulu-Natal,
Mpumalanga and Western Cape provinces of South Africa, as well as in Eswatini, Zambia and Mozambique. It
listed on the main board of the JSE in 1948. The Company specialises in the production of primary agricultural
products, including sugar cane, bananas, deciduous fruit and macadamia nuts. Regarding the use of capital,
the board of directors of the Company (the “Board”) has recognised the need to establish a portfolio of projects
where each project performs at a level which will provide Shareholders with the required return on their capital.
To this end, mindful of the need for crop and geographical diversification, the Board has initiated processes to
sell certain farming properties that are not generating returns commensurate with its targets. It is intended that
the funds realised from the sale of such assets will enable Crookes Brothers to reduce its financial gearing and
to assist in completing its other diversification projects. The Purchaser is a Western Cape based fruit farming
business.
3. SUBJECT MATTER OF THE DISPOSAL
The subject matter of the Disposal is comprised of the Property and the Business, which includes the following:
3.1 The Property includes the following immovable properties: -
3.1.1 Remainder of the farm Vygeboom Number 86, In the Theewaterskloof Municipality, Division Caledon,
Province of the Western Cape, measuring 417,7507 hectares;
3.1.2 Remainder of Portion 3 (Boesmans Poort) of the farm Ou Werf Number 21, In the Theewaterskloof
Municipality, Division Caledon, Province of the Western Cape, measuring 78,6144 hectares;
3.1.3 Remainder of Portion 10 of the farm Ou Werf Number 21, In the Theewaterskloof Municipality, Division
Caledon, Province of the Western Cape, measuring 74,8052 hectares;
3.1.4 Remainder of the farm Ou Werf Number 21, In the Theewaterskloof Municipality, Division Caledon,
Province of the Western Cape, measuring 157,8174 hectares;
3.1.5 Remainder of Portion 7 (portion of Portion 6) of the farm Vygeboom Number 86, In the Theewaterskloof
Municipality, Division Caledon, Province of the Western Cape, measuring 69,0748 hectares;
3.1.6 Portion 30 (a portion of Portion 7) of the farm Vygeboom Number 86, In the Theewaterskloof
Municipality, Division Caledon, Province of the Western Cape, measuring 36,0075 hectares;
held by Deed of Transfer Number T18014/2019.
The Property comprises the deciduous fruit farms known as Vyeboom Fruit Farm, consisting of
approximately 404 planted hectares situated between Grabouw and Villiersdorp in the Western Cape
and includes all plantations, orchards, crops, buildings, water pipelines and infrastructure, water pumps,
structures and other improvements of any nature thereon, including all fixtures contained in the
buildings, structures and other improvements located on the Property as at the date of the Disposal
Agreement.
3.2 The Business comprises the following:-
the Vyeboom Fruit Farm Business conducted on the Property, which includes, inter alia, the business
names Vyeboom, Ou Werf and Dennebos and the Business assets, being all the assets owned by the
Seller and used in or in connection with the Business, and in addition to the Property includes, but is
not limited to, the following:
3.2.1 Business contracts concluded but not yet fulfilled at the Signature Date;
3.2.2 lease agreements;
3.2.2 water use rights;
3.2.3 movable assets;
3.2.4 the shares held by the Seller in Two-a Day Group Proprietary Limited (“TAD”), previously Elgin Fruit
Packers Co-operative Limited, an unlisted private company, a leading fruit growing, packing and
marketing company; and
3.2.5 the shares held by the Seller in Rainbow Fruit Farming Proprietary Limited (”Rainbow”), an unlisted
private company, an empowerment farming company that was created for the benefit of the employees
of shareholder-producers of TAD;
3.2.6 stock comprising of diesel, fertiliser and chemicals of the business (“Stock”) as on the Effective Date,
but shall exclude the accounts receivable and cash on hand of the Business as on the Effective Date.
4. TERMS OF THE DISPOSAL
The Purchaser will acquire the Property and the Business as a going concern from the Seller on the terms and
conditions set out below.
4.1 Effective date of the Disposal
The fulfilment date of the Disposal Agreement shall be the first business day after fulfilment or waiver of the last
of the suspensive conditions detailed in paragraph 4.2 below (“Fulfilment Date”). The effective date of the
Disposal shall be the later of 1 September 2023 or the fifth business day after the Fulfilment Date (“Effective
Date”). The transfer date of the Property shall be the date of registration of transfer of the Property into the
name of the Seller at the Deeds Office and is expected to occur on or shortly after 1 October 2023 (“Transfer
Date”).
4.2 Suspensive Conditions
The Disposal is subject to the fulfilment, within 120 days of the Signature Date of, inter alia, the following
outstanding suspensive conditions:
4.2.1 the Disposal shall have been approved, to the extent necessary, in terms of the Competition Act, either
unconditionally or subject to such conditions which the Seller and the Purchaser confirm to each other
in Writing (within 7 (seven) days after receipt of such conditional approval) are acceptable to them,
which acceptance shall not be unreasonably withheld or delayed;
4.2.2 Crookes Brothers shall have obtained the approval of Shareholders at a general meeting of
Shareholders convened for that purpose of the Disposal as required pursuant to section 9 of Listings
Requirements of the JSE Limited’ (“JSE”);
4.2.3 the Purchaser shall have obtained written confirmation that a loan in the amount of R200 million, or
such lesser amount as the Purchaser may in its discretion agree to accept, has been granted to the
Purchaser by Standard Bank of South Africa Limited, on terms acceptable to the Purchaser, in respect
of the funding of the purchase of the Property.
4.2.4 the board of directors of TAD shall have passed a board resolution authorising the transfer of the shares
in TAD to the Purchaser; and
4.2.5 the board of directors of Rainbow’ shall have passed a board resolution authorising the transfer of the
shares in Rainbow to the Purchaser.
4.3 The Consideration and Application of Proceeds
The aggregate purchase price payable by the Purchaser to the Seller for the Property will be two hundred million
Rand inclusive of Value Added Tax at 0% plus the value of the Stock as determined on the Effective Date (the
“Consideration”). The Consideration is payable without any deduction, free of bank charges, as follows:
4.3.1 a deposit of two million Rand within 5 business days from the Signature Date to the conveyancing
attorneys responsible for registration of transfer of the Property; and
4.3.2 the balance of the Consideration on the Transfer Date.
The Consideration will be applied by the Company to reduce financial gearing in the Company, including
repayment of a portion of the overdraft which is secured by a mortgage bond registered over the Property,
amongst other security, and to assist in funding its further diversification projects.
4.4 Additional Significant Terms of the Disposal Agreement
4.4.1 All reasonable and necessary costs and expenses incurred by the Seller in connection with any
outgoing payments made in the ordinary course of business in respect of the planting of new apple and
pear trees on the Property from 1 June 2023 until the Effective Date shall be refunded by the Purchaser
to the Seller.
4.4.2 All income received or accrued in respect of the 2023 fruit harvesting season, shall accrue for the benefit
of the Seller.
4.5 Profit / Losses and net asset value attributable to the Property
The audited after tax profit of the subject matter of the Disposal for the year ended 31 March 2022, was R9.8
million while the audited net asset value at 31 March 2022 was R265.2 million.
These audited figures have been extracted from the Company’s latest annual financial statements and have
been prepared in accordance with International Financial Reporting Standards.
4.6 Warranties and indemnities
The Purchaser and the Seller have given each other such warranties and indemnities as are usual in
transactions of this nature. Save for these warranties the Property and Business are sold on a “voetstoots”
basis.
5. CATEGORISATION OF THE DISPOSAL
The Disposal is classified as a category 1 transaction in terms of the Listings Requirements of the JSE and
requires the approval of Shareholders in a general meeting. A circular incorporating a notice convening the
general meeting and setting out information regarding the Disposal, including the valuation of the Property by
independent professional valuers and such financial information on the subject of the Disposal as is required
by the JSE Listings Requirements, will be despatched to Shareholders in due course.
Mt Edgecombe
30 May 2023
Sponsor
Questco Corporate Advisory Proprietary Limited
Legal Advisor
Livingston Leandy Inc.
Date: 30-05-2023 02:45:00
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