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EXL - Excellerate Holdings Limited - Announcement regarding the disposal by
Excellerate of certain of its trading and distribution businesses and further
cautionary announcement
EXCELLERATE HOLDINGS LIMITED
(Registration number 1997/009884/06)
JSE Code: EXL ISIN:ZAE000026092
(Incorporated in the Republic of South Africa)
("Excellerate" or "the Company" or "the Group")
ANNOUNCEMENT REGARDING THE DISPOSAL BY EXCELLERATE OF CERTAIN OF ITS TRADING AND
DISTRIBUTION BUSINESSES AND FURTHER CAUTIONARY ANNOUNCEMENT
1 Introduction
Further to the cautionary announcement published by Excellerate on SENS on
Monday, 30 May 2011 and in the press on Tuesday, 31 May 2011, Excellerate
shareholders ("Shareholders") are advised that Excelltrade (Proprietary)
Limited, a wholly-owned subsidiary of Excellerate ("the Seller"), has
entered into a sale of business agreement ("the Agreement") on Wednesday, 8
June 2011 with, inter alia, Cottonfield Trading 17 (Proprietary) Limited
("the Purchaser"), a wholly-owned subsidiary of Evertrade (Proprietary)
Limited, in terms of which the Seller will, subject to the fulfillment
and/or waiver of the suspensive conditions described below, dispose of its
General Merchandise and Trading businesses being conducted under the names,
"Goldenmarc", "Louis Smiedt" and "Hypertrade" ("the Businesses") to the
Purchaser on the terms and conditions set out below ("the Transaction").
The Businesses distribute, inter alia, home textiles, party products and
other general merchandise to mass-merchant retailers.
2 Rationale for the Transaction
As previously communicated, the Group is continuously looking for
opportunities to expand its presence in the outsourced services sector,
particularly in the areas of procurement and logistics services and
property related services, either by acquisition, or by organic growth. As
such the Group is in the process of identifying those investments that are
not at present delivering the required returns to Shareholders and are no
longer considered to be core to the Group`s operations, with a view to
either re-engineering the business models or disposing of such investments
on favourable terms.
In this context, the board of directors of Excellerate ("the Board")
believes that the businesses do not form part of the core assets of the
Company or the Company`s strategy going forward.
Proceeds received through the disposal will be applied towards improving
efficiencies with the current operations resulting in organic growth and
potentially the acquisition of new investments which will assist the Group
in achieving its core strategic directives of revenue growth, cash
management and cost containment.
3 Consideration and application of consideration
The purchase price payable by the Purchaser to the Seller will be an amount
of R49 186 257 ("the Purchase Price"), which shall be settled as follows:
3.1 R20 000 000 will be paid by the Purchaser to the Seller in cash;
and
3.2 the Seller will advance a vendor loan in the amount of R29 186
257 to the Purchaser ("the Loan") for purposes of settling the
remaining balance of the Purchase Price.
The Loan is repayable in 36 equal monthly installments together with
interest accrued at the prime interest rate. The Purchaser has granted
security in favour of the Seller in the form of intra-group suretyships, a
cession and pledge of the shares in and loan account against the Purchaser
and a second mortgage bond over the movable assets of the Purchaser.
4 Suspensive conditions
The Transaction is subject to the fulfillment and/or waiver of the
following suspensive conditions:
4.1 the Purchaser raising the necessary funding for purposes of
settling its payment obligations referred to in paragraph 3.1
above;
4.2 the Board and Excellerate as the sole shareholder of the Seller
adopting the necessary resolutions approving and/or ratifying the
Transaction; and
4.3 all requisite regulatory consents and/or authorisations required
for the Transaction being obtained, including, without
limitation, the JSE Limited.
5 Effective Date
The Transaction will be implemented on the 3rd business day following the
fulfillment and/or waiver of the last of the supsensive conditions and will
be effective from 1 August 2010.
6 Pro forma financial effects and further cautionary
Shareholders are advised to continue to exercise caution when dealing in
the Company`s securities until such time as a further announcement
containing the pro forma financial effects of the Transaction is published
Sandton
9 June 2011
Sponsor:
One Capital
Attorneys to Excellerate:
Glyn Marais Incorporated
Attorneys to the Purchaser:
Malan Scholes Incorporated
Date: 09/06/2011 14:30:00 Supplied by www.sharenet.co.za
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