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Further cautionary announcement
Erbacon Investment Holdings Limited
(Registration number 2007/014490/06)
(Incorporated in the Republic of South Africa)
Share Code: ERB ISIN: ZAE000111571
(“Erbacon” or “the Company”)
FURTHER CAUTIONARY ANNOUNCEMENT
Pursuant to the SENS announcement made on 04 February 2013,
shareholders are further advised that the Company has
finalised agreements with certain providers of financial
facilities. The Company’s principal bankers have approved a
new over-draft facility on substantially the same terms and
conditions as the Company previously enjoyed. The Company’s
major guarantee provider has increased its facilities
available to the Group on the basis of the provision of
increased security, as approved by the receipt of irrevocable
letters of consent from over 90% of shareholders. These
banking and guarantee facilities will be applied to strengthen
the position of the Company’s major operating subsidiary,
Civcon Construction (Pty) Ltd (“Civcon”).
The main security issued to the Company’s major guarantee
provider is all of the shares in all of the Company’s
subsidiaries. The guarantee provider has the right to hold the
security until such time as it is satisfied with the Group’s
financial and operating position, or until the Group has no
further exposure to the guarantee provider. The guarantee
provider is entitled to realise its security should the
Company still be indebted to the guarantee provider three
months after the time of a cash advance to the Company or
payment by the guarantee provider to or on behalf of the
Company. The Board is actively pursuing options to raise
alternative sources of long-term funding such that no amounts
are owed to the guarantee provider.
Shareholders are further advised that after the material
losses incurred on a contract in the Eastern Cape by the
Company’s subsidiary, Armstrong Building Contractors (Pty) Ltd
(“Armstrong”), the required actions have been instituted to
voluntarily wind up the subsidiary. Shareholders are advised
that, as a result of the winding up of Armstrong, the net
asset value per ordinary share at 31 August 2012 of 37 cents
will reduce by 7 cents as a result of the full impairment of
the goodwill attributed to Armstrong. As at 31 January 2013
there were no other material changes to the net asset value
per ordinary share of the Company. The Company does, however,
have a contingent liability of approximately R59 million in
respect of cross guarantees given to guarantee providers for
performance bonds issued to clients of Armstrong. The
Company’s exposure to this contingent liability is being
actively managed in partnership with the guarantee providers.
The financial information provided above was prepared by the
Company’s financial director and has not been audited or
reviewed by the Company’s auditors.
More detailed information will be provided in due course and
shareholders are advised to remain cautious in dealing with
the securities of the Company.
Midrand
7 February 2013
Designated adviser: PSG Capital Proprietary Limited
Date: 07/02/2013 05:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
