Yorkcor - Acquisition Of "The Bluechip" Sawmilling Assets

Yorkcor - Acquisition Of "The Bluechip" Sawmilling Assets                       
The York Timber Organisation Limited                                            
(Incorporated in the Republic of South Africa)                                  
(Registration number 1916/004890/06)                                            
Share code YRK   ISIN ZAE000008108                                              
("Yorkcor")                                                                     
ACQUISITION OF "THE BLUECHIP" SAWMILLING ASSETS                                 
Introduction                                                                    
Sasfin Bank Limited is authorised to announce that Yorkcor has successfully     
tendered for the land and buildings, and complete plant and equipment of        
Bluechip Timbers Mpumalanga (Proprietary) Limited and Bluechip Industrial       
Timbers (Proprietary) Limited (collectively "the Bluechip companies"), both     
companies in liquidation, for R6 450 000 excluding value added tax (`the        
acquisition"). The Master of the High Court consented to the acquisition on 11  
November 2002.                                                                  
The acquisition                                                                 
The assets acquired comprise two complete sawmills located in Mpumalanga. They  
have not operated since the Bluechip companies were placed in liquidation.      
The acquisition complements the sawmilling activities of York Timbers Limited,  
Yorkcor`s main operating subsidiary.                                            
The R 6 450 000 consideration payable will be settled by way of R5 250 000 in   
cash from Yorkcor`s own cash resources and by the sale of one of the properties,
in the Lothair district, for R 1 200 000 to Nedcor Bank Limited ("Nedcor"), a   
secured creditor of the Bluechip companies. This property will be leased by     
Yorkcor for R10 000 per month for an initial period of 5 years, after which     
Nedcor will be entitled to either extend the lease on similar terms or "put" the
property to Yorkcor for R 1 200 000.                                            
Financial effects of the acquisition                                            
The assets, having been bought out of liquidation, did not earn any income      
during the six month period ended 30 June 2002, being Yorkcor`s last reporting  
period.                                                                         
It is proposed that operations will commence during the first quarter of 2003.  
By virtue of the sound operating condition and location of the plant and        
equipment it is anticipated that the acquisition will provide a positive        
contribution during 2003.                                                       
For the purposes of this announcement it has therefore been assumed that the    
acquisition was effected on 30 June 2002 with no resultant effect on the net    
asset value and the earnings of Yorkcor as at and for the six months ended 30   
June 2002.                                                                      
A statement of the proforma financial effects of the acquisition would not      
fairly represent the financial position of Yorkcor at 30 June 2002 if it were to
be assumed that it had been implemented on 1January 2002 as only costs of       
financing the acquisition but no revenue or operating costs would be accounted  
for.                                                                            
Rationale for the acquisition                                                   
The acquisition represents a cost effective expansion opportunity where Yorkcor 
will be able to apply its extensive know-how and goodwill to revitalise these   
sawmilling operations. It will reinforce Yorkcor`s prospects by way of the      
expected privatisation of state forestry assets and it will enable Yorkcor to   
take advantage of various other opportunities in the timber market. These       
sawmills are well located to the Gauteng and Kwa Zulu Natal markets.            
To set up these sawmills from grassroots would have been extremely costly.      
Yorkcor is planning to make a social contribution to the region through the     
creation of employment opportunities and the promotion of empowerment           
enterprises. It is anticipated that this will also be a positive factor in      
Yorkcor`s proposed participation in a bid to acquire the Komatiland forests.    
Documentation                                                                   
As this acquisition constitutes a Category 1 transaction in terms of the        
Listings Requirements of the JSE Securities Exchange South Africa ("the JSE"), a
circular detailing the transaction in full and incorporating a notice of general
meeting to approve the acquisition will, subject to JSE approval, be posted to  
shareholders within 28 days of the date of this announcement.                   
PRETORIA                                                                        
13 November 2002                                                                
SPONSOR                                                                         
SASFIN BANK LIMITED                                                             
Date: 13/11/2002 03:31:47 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department