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ACE - Accentuate Limited - Disposal by Accentuate of the operational assets and
liabilities of CGA fenestrations (PTY) Limited ("CGA" OR "THE DISPOSAL")
Accentuate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
JSE Share code: ACE ISIN: ZAE000115986
("Accentuate" or "the Company")
DISPOSAL BY ACCENTUATE OF THE OPERATIONAL ASSETS AND LIABILITIES OF CGA
FENESTRATIONS (PTY) LIMITED ("CGA" OR "THE DISPOSAL")
1 INTRODUCTION
The directors of Accentuate are pleased to announce that Accentuate has
entered into an agreement with Wys Investments (Pty) Limited ("the
Purchaser") to dispose of the operational assets and liabilities of CGA for
an amount of R 9,557 million (nine million, five hundred and fifty seven
thousand rand) ("the Disposal Price").
2 CGA - BRIEF COMPANY PROFILE
CGA is a company specialising in the design and erection of glass and
aluminium solutions since 1993. CGA operates in the construction sector,
currently a manufacturer and installer for the commercial, retail and top-
end residential markets of glass facades, shop fronts, windows, doors and
aluminium composite panel cladding.
3 SALIENT FEATURES OF THE DISPOSAL
In line with the earlier announcements in this regard, Accentuate is
disposing of the operational assets and liabilities of CGA. The claims that
Accentuate has against the previous vendors of CGA are on-going and will
remain due to Accentuate until such time that they are resolved.
4 RATIONALE OF THE DISPOSAL
The under-performance of this company has been an area of concern for
Accentuate for some time and notwithstanding serious remedial action, this
division has remained a drain on the resources of the group. In addition,
the macro-economic factors impacting on CGA have deteriorated over a number
of years and management does not foresee a dramatic change in these macro-
economic conditions in the short to medium term. This coupled with the fact
that CGA has taken up a disproportionate amount of Accentuate management
time and resources, has led to the disposal of CGA as a going concern. The
net effect of this transaction is that Accentuate can focus its time and
resources on the core cash generative assets that have performed
consistently since listing. The relationships that Accentuate has developed
since its establishment in 1953, provide a platform for both organic and
acquisitive growth within its areas of expertise and competency.
5 CONDITIONS PRECEDENT
The Disposal is subject to the following conditions precedent:
* The Purchaser pays a sum of R 4 million on or before 15 December 2011;
* Approval by the Board of Directors of Accentuate; and
* Granting of all regulatory approvals as may be required.
6 CATEGORISATION OF THE DISPOSAL
The Disposal is a category 2 transaction in terms of the JSE Listings
Requirements.
7 FINANCIAL EFFECTS OF THE DISPOSAL
The unaudited pro forma financial effects of Accentuate before and after
the disposal are based on the audited results of Accentuate for the year
ended 30 June 2011. The unaudited financial effects are presented for
illustrative purposes only, to provide information on the impact of the
disposal may have impacted on the results and financial position of
Accentuate. The unaudited pro forma financial effects are the
responsibility of Accentuate`s directors. Due to the nature of the
unaudited pro forma financial effects, they may not fairly present
Accentuate`s financial position and the results of its operations after the
disposal. It has been assumed for the purpose of the calculation of
headline earnings per share and earnings per share that the disposal took
place with effect from 1 July 2010, and for the calculation of net asset
value ("NAV") and tangible net asset value ("TNAV"), the disposal took
effect from 30 June 2011. The financial effects do not purport to be
indicative of what the financial results would have been, had the disposal
been implemented on a different date. The unaudited pro forma financial
information has been presented in a manner consistent in all respects with
IFRS as well as Accentuate`s accounting policies which have been applied
consistently throughout the period.
The financial effects of the disposal are set out below:
Before the After the % change
disposal disposal
Amount Amount
Basic earnings per share (EPS) (71.58) (59.14) 17.4
(cents)
Diluted earnings per share (EPS) (71.58) (59.14) 17.4
(cents)
Headline earnings per share (3.72) 8.72 334.4
(HEPS) (cents)
Diluted headline earnings per (3.72) 8.72 334.4
share (HEPS) (cents)
Net asset value per share (NAV) 105 105 0.0
(cents)
Tangible net asset value (TNAV) 73 73 0.0
(cents)
Shares in issue 111 108 119 111 108 119 0.0
Weighted average number of 104 231 138 104 231 138 0.0
shares in issue
Notes:
1 The "Before the disposal Amount" and "After disposal Amount" basic earnings
per share include the impairments of R70.8 million disclosed in the June
2011 annual report. Such impairments equates to a loss of 68 cents per
share.
2 The EPS, HEPS, Diluted EPS and Diluted HEPS in the "Before" column of the
table are based on the audited statement of comprehensive income of
Accentuate for the year ended 30 June 2011 and 104,231,138 Accentuate
ordinary shares in issue (being the weighted diluted number of ordinary
shares in issue for the year ended 30 June 2011)
3 The EPS, HEPS, Diluted EPS and Diluted HEPS in the "After" column of the
table are based on 104,231,138 Accentuate ordinary shares in issue and the
assumptions that:
- the Disposal became effective on 1 July 2010 and the purchase price
was settled on that date;
- the Disposal Price was settled in cash; and
- the cash was invested on the Money Market at an after tax rate of
4.3%, yielding an annual after tax interest of R 412,862.
4 The NAV per share and TNAV per share in the "Before" column of the table
are based on the audited statement of financial position of Accentuate at
30 June 2011 with 111,108,119 Accentuate ordinary shares in issue.
5 The NAV per share and TNAV per share in the "After" column of the table are
based on the assumptions that the disposal was completed on 30 June 2011
with 111,108,119 Accentuate ordinary shares in issue.
6 The pro forma financial effects have not been reviewed by Accentuate`s
auditors.
Johannesburg
14 December 2011
Designated Advisor and Corporate Advisor: Bridge Capital Advisors (Pty) Limited
Date: 14/12/2011 13:00:01 Supplied by www.sharenet.co.za
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