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Disposal of SAFIC Business
ACCÉNTUATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
JSE Share code: ACE ISIN: ZAE000115986
(“Accéntuate” or “the Company”)
DISPOSAL OF SAFIC BUSINESS
Introduction
Accéntuate is a group of companies involved in the flooring market, water treatment, chemical blending, industrial and
commercial cleaning and metal treatment sectors.
In terms of section 9.15 of the JSE Listings Requirements, Shareholders are advised that Accéntuate (“the Seller”),
has agreed to the key terms of a proposed transaction with Safic Proprietary Limited (“Safic”) (the “Agreement”)
whereby Accéntuate will dispose of its entire 100% shareholding in Safic to the Purchasers (“the Transaction”) (“the
Parties”).
Finalisation of the Transaction is subject to the fulfilment of conditions precedent set out below.
The Purchasers
Eric William Platt, Douglas Murray Cutter and Luke Robert Ralph Quinn (“the Purchasers”), will jointly purchase the
entire issued share capital in Safic.
Rationale for the Transaction
Accéntuate has decided to focus strategically on the flooring business. As a result, the Safic business has been
deemed as non-core and a process was instituted to dispose of this business.
Accéntuate will continue to focus on the core business during a challenging macro environment.
Effective date and conditions precedent
The Accéntuate Board in the form of a resolution approved the sale of shares and cession of the sales claim in Safic
to the Purchasers.
The Transaction will become effective once the conditions precedent outlined below have been met:
* Approval by the Board of Accéntuate of accepting the Sale of Shares and Claims Agreement;
* Purchasers securing a R5 500 000 (five million five hundred thousand rand) working capital facility for Safic to the
reasonable satisfaction of the Accéntuate Board;
* Approval in terms of the Sale of Shares and Claims Agreement by Ion Exchange India Limited;
* Approvals by all Convertible Debt Holders of the terms of the Sale of Shares and Claims Agreement and the release
of the Security Document held (directly or indirectly held);
* Approval from First National Bank (“FNB”) of the terms of the Safic Transaction and cancellation of cross
guarantees and security cession of debtors;
* The approval of the JSE, the Takeover Regulation Panel, the Competition Commission and other relevant
authorities (if any) of the proposed Transaction and all the documents associated with implementing the proposed
Transaction;
* Resignation of the Accéntuate nominees to the board of directors of Safic.
* The requisite approval by Shareholders of Accéntuate approving the Sale of Shares and Sale Claims Agreement
at a general meeting.
The Parties undertake to use all reasonable commercial endeavours to procure the fulfilment of the conditions, as
soon as is practically possible.
The Transaction is also subject to the condition that Ion Exchange Safic Proprietary Limited (“IES”) secure a working
capital facility in the amount of at least R3 300 000 (three million three hundred thousand rand) by 30 April 2020 and
the written consent from Ion Exchange India Limited. If this condition is not fulfilled, the claims by Safic against IES by
virtue of Shareholders loans and trading account receivables, as calculated as at the effective date (“IES Claims”), will
be ceded and sold to the Company and the Purchase Consideration will be reduced by the value of the IES Claims.
The Parties may, by written consent, mutually agree to waive a condition or extend its due date. If any of the conditions
fail, the Sale of Shares and Claims Agreement shall cease to be of any further force or effect and the Parties shall be
restored as near as may be to the positions in which they would have been had this Agreement not been entered into.
Neither the Seller nor the Purchasers shall have any claim against the other of them as a result of the failure of the
conditions.
Purchase Consideration
The purchase consideration payable by the Purchasers to Accéntuate is R10 000 000 (ten million rand only)
(“Purchase Consideration”), less the value of the IES Claims (only if the conditions relating to the IES Claims are not
fulfilled), plus interest that will have accrued on the term loan to Accéntuate Management Services Proprietary Limited
calculated from 1 January 2020 to the final date of payment.
Payment of the Purchase Consideration will be made in 5 tranches the first of which will be paid on 10 April 2020 and
the balance by 30 April 2020.
Application of the Purchase Consideration
The proceeds will be applied to the working capital of the group and to reduce the exposure to FNB.
Warranties and Terms and Conditions
Neither Party shall be entitled to cancel the Agreement as a consequence of any breach of the warranties from the
other Party unless such breach is capable of being remedied without prejudice to the other Party and is so remedied
within a period of 30 (thirty) days after written notice given to such Party requiring it to remedy the same.
Each of the Parties represents and warrants to the other that as at the signature date and the closing date, being 3
days after the Conditions Precedent have been met:
- It has the necessary power and legal capacity to enter into and perform its obligations under the Agreement and
all matters contemplated therein;
- It has taken all necessary corporate and/or internal action to authorise the execution and performance of the
Agreement;
- The provisions of the Agreement are and shall remain legally binding on it and the obligations imposed on it
pursuant to the Agreement constitute its legal, valid and binding obligations, enforceable in accordance with the
terms; and
- The execution if the Agreement and performance of its obligations does not contravene any law or regulation, or
any provision of its constitutional documents.
Net Asset and Attributable Profits
The audited combined Net Asset Value (“NAV”) of the Company was R 91 556 000 (ninety-one million five hundred
and fifty-six thousand rand) as at 30 June 2019. The audited loss attributable to the net assets for the year ended 30
June 2019 on an IFRS basis is R 23 330 000 (twenty-three million three hundred and thirty thousand rand).
Pro Forma Financial Effects of the Transaction
The table below sets out the pro forma financial effects of the Transaction and is based on the audited financial results
of Accéntuate for the year ended 30 June 2019. The pro forma financial effects of the Transaction have been prepared
for illustrative purposes only to provide information about how the Transaction may affect Accéntuate’s financial
position and financial performance and, because of its nature, may not give a fair reflection of Accéntuate’s financial
performance and financial position, changes in equity, and results of operations and cash flows after the Transaction.
The pro forma financial effects have been prepared using accounting policies that comply with IFRS and that are
consistent with those applied in the published audited financial results of Accéntuate for the year ended 30 June 2019.
The pro forma financial effects are presented in accordance with the JSE Listings Requirements, the Guide on Pro
Forma Financial Information issued by the South African Institute of Chartered Accountants and ISAE 3420 (Assurance
Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus).
The Designated Adviser, together with the Directors of Accéntuate, are responsible for the compilation, contents and
preparation of the pro forma financial effects. Their responsibility includes determining that the pro forma financial
effects have been properly compiled on the basis stated, which is consistent with the accounting policies of Accéntuate
and that the pro forma adjustments are appropriate for purposes of the pro forma financial information disclosed
pursuant to the JSE Listings Requirements.
Pro forma financial effects of the Transaction
Before 1 Pro forma after % change
the Transaction 2
Earnings and diluted earnings per shares (cents) (17.46) (12.57) -28%
Headlines and diluted headline earnings (cents) (17.46) (28.14) 61%
Net asset value per share (cents) 65.69 73.45 12%
Net tangible asset value per share (cents) 64.87 73.45 13%
Weighted and diluted average number of shares ('000) 133 610 000 133 610 000
Number of ordinary shares in issue ('000) 139 366 188 139 366 188
Treasury shares in issue ('000) 3 978 890 3 978 890
Number of shares in issue ('000) 135 387 298 135 387 298
Notes and assumptions:
1) The ‘Before’ column has been extracted without adjustment from the published audited Accéntuate financial
results for the year ended 30 June 2019.
2) The “Pro forma after the Transaction” column reflects the impact of the pro forma adjustments on Accéntuate
as a consequence of the Transaction.
3) The detailed notes and assumptions to the pro forma financial effects will be presented in a Circular and the
pro forma financial effects should be read in conjunction with Accéntuate’s pro forma group statement of
financial position and the pro forma group income statement contained therein. The Independent Reporting
Accountant’s assurance report on the pro forma financial effects and pro forma financial information will be
contained in the Circular.
Cautionary re Categorisation
The Company is in discussions with the JSE as it relates to the categorisation of the Transaction. Shareholders are
advised to exercise caution when dealing in the Company’s securities until an announcement is made regarding the
categorisation of the Transaction.
Johannesburg
6 April 2020
Designated Adviser: Bridge Capital Advisors Proprietary Limited
Date: 06-04-2020 05:40:00
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