PSV HOLDINGS LIMITED - Disposal of PSV Mitech Control Valves Proprietary Limited

Disposal of PSV Mitech Control Valves Proprietary Limited

PSV Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/004365/06)
Share code: PSV ISIN: ZAE000078705
("PSV" or “the Group”)


DISPOSAL OF PSV MITECH CONTROL VALVES PROPRIETARY LIMITED (“MITECH”)


1. INTRODUCTION

  The board of directors of PSV (“the Board”) is pleased to advise shareholders that PSV has entered into
  an agreement with Lambertus Antonie Alberts and Lesole Jacob Mtolo (collectively referred to herein as
  the “Purchasers”), to dispose of 100% of the sale shares and claims of Mitech to the Purchasers for a
  total consideration of R7 000 100 (“the Disposal”).

2. THE DISPOSAL

  2.1 Nature of the Mitech business

      Mitech is a specialised control valves business that produces valves which are primarily used in the
      mining and petrochemical industries. Each Mitech valve produced has essentially one application
      and its own pattern, thus ensuring that Mitech is a highly specialised and niched valve producer.

  2.2 The rationale for the Disposal

      Mitech did not meet PSV’s return on investment targets. It was therefore decided to dispose of
      Mitech and focus effort on maximising the returns generated by the rest of the companies within the
      Group.

  2.3 Consideration and effective date

      The total consideration of R7 000 100 for the Disposal is to be settled by the Purchasers in cash, and
      will be injected into the remaining businesses as working capital.

      The effective date of the Disposal is 1 April 2013 and there are no outstanding conditions precedent.

3. PRO FORMA FINANCIAL EFFECTS

  The table below sets out the unaudited pro forma financial effects of the Disposal, on PSV’s earnings per
  share, headline earnings per share, net asset value per share and tangible net asset value per share.

  The unaudited pro forma financial effects have been prepared to illustrate the impact of the Disposal on
  the reported financial information of PSV for the six months ended 31 August 2012, had the Disposal
  occurred on 1 March 2012 for statement of comprehensive income purposes and on
  31 August 2012 for statement of financial position purposes. The unaudited pro forma financial effects
  have been prepared using accounting policies that comply with International Financial Reporting
  Standards and that are consistent with those applied in the annual financial statements of PSV for the
  year ended 29 February 2012.

  The unaudited pro forma financial effects, which are the responsibility of the directors, are provided for
  illustrative purposes only and, because of their pro forma nature may not fairly present PSV’s financial
  position, changes in equity, results of operations or cash flow.

                                                                  Before the        After the   Percentage
                                                                   Disposal         Disposal    change (%)
   Basic loss per share (cents)                                        (9.03)          (7.88)       12.74%
   Headline earnings per share (cents)                                   1.72            2.76       60.47%
   Net asset value per share (cents)                                    35.68           35.35       (0.92%)
   Tangible net asset value per share (cents)                           23.92           23.58       (1.42%)
   Weighted average number of shares in issue (000’s)                255 791         255 791               -
   Total number of shares in issue (000’s)                           272 548         272 548               -
     Notes:
     1. The amounts in the “Before the Disposal” column relate to the unaudited financial interim results of
        PSV for the six months ended 31 August 2012.
     2. The amounts in the “After the Disposal” column reflect the financial effects of the Disposal on PSV
        as if it had occurred on 1 March 2012 for statement of comprehensive income purposes and on 31
        August 2012 for statement of financial position purposes.
     3. The consideration of R7 000 100 will be settled in cash which will be injected into the Group’s
        working capital. Therefore no account has been taken of interest earned on the consideration when
        calculating basic earnings per share and headline earnings per share.
     4. The effects on basic earnings per share and headline earnings per share are calculated based on
        the assumption that the Disposal was effected on 1 March 2012.
     5. The effects on net asset value per share and tangible net asset value per share are calculated
        based on the assumption that the Disposal was effected on 31 August 2012.

4. CLASSIFICATION OF THE ACQUISITION

   The Disposal is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE
   and does not require shareholder approval.


   Johannesburg
   13 May 2013

   Designated Adviser
   Merchantec Capital

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