PRIMESERV GROUP LIMITED - Disposal of shares in Primeserv Training (Pty) Ltd trading as Stanford Business and Computer College ("Stanford")

Disposal of shares in Primeserv Training (Pty) Ltd trading as Stanford Business and Computer College ("Stanford")

PRIMESERV GROUP LIMITED

(Incorporated in the Republic of South Africa)  

(Registration number 1997/013448/06)

Share code: PMV 

ISIN: ZAE000039277

("Primeserv" or "the company")

DISPOSAL OF SHARES IN PRIMESERV TRAINING (PTY) LTD TRADING AS STANFORD BUSINESS AND COMPUTER COLLEGE ("STANFORD") BY PRIMESERV

1.    INTRODUCTION

      Shareholders are advised that Primeserv has entered into an agreement with Ultimate Income Investments 107 (Pty) Ltd ("Ultimate") for the disposal of all of its    shares held in Stanford (hereinafter referred to as the ÒDisposal TransactionÓ).

2.    RATIONALE

      As previously advised, Primeserv has implemented a decision to discontinue its non-core Colleges Business and in accordance with this decision has pursued a number of avenues to dispose of the business and avoid the concomitant closure costs.

      The outcome of negotiations with several interested parties has resulted in the Disposal Transaction.

3.    TERMS OF THE DISPOSAL TRANSACTION

3.1   Primeserv sells to Ultimate the 100 shares which it  holds in the share capital of Stanford for a purchase consideration of R1,00.

3.2   The value of certain assets, including the effective date debtors, are excluded from the transaction and will be paid to Primeserv upon realisation, subject to a maximum amount of R9,5 million. From a JSE Limited categorisation perspective, this amount is required to be included as part of the purchase proceeds in determining the category of the transaction, which equates to a Category 2 transaction in terms of the JSE Listings Requirements.

3.3   The agreement was signed on 29 May 2013, with the effective date of the Disposal Transaction specified in the agreement as 1 May 2013.

3.4   All cash proceeds received in terms of the Disposal Transaction will be invested in the Group's existing banking facilities.

3.5   There are no outstanding conditions precedent to the Disposal Transaction.

4.    PRO FORMA FINANCIAL INFORMATION

4.1   The table below sets out the unaudited pro forma financial effects of the Disposal Transaction on the unaudited interim results for the six months ended 30 September 2012. The unaudited pro forma financial effects have been prepared in accordance with the JSE Listings Requirements. Accounting policies used to prepare the unaudited pro forma financial effects are consistent with those applied in the preparation of the unaudited interim results for the six months ended 30 September 2012.

4.2   The unaudited pro forma financial effects are the responsibility of the directors and have been prepared for illustrative purposes only, in order to provide     information about how the Disposal Transaction may have affected shareholders on the relevant reporting date. Due to the nature of pro forma financial information, it may not give a true reflection of the PrimeservÕs actual financial position, changes in equity, results of operations or cash flows after implementation of the Disposal Transaction or of PrimeservÕs future earnings.

                              Before the    After the     

                                disposal     disposal  Percentage 

                             transaction  transaction      change

Earnings per share

 (cents)                            4,63         5,56          20

Headline earnings 

 per share (cents)                  4,63         5,56          20

Net asset value 

 ("NAV") per share (cents)            84           85           0

Net tangible asset 

 value ("NTAV") per 

 share (cents)                        54           55           0

Number of shares in 

 issue (000's)                    93 682       93 682           0

Weighted average number 

 of shares in issue 

 (000's)                          93 682       93 682           0

4.3      The pro forma earnings, headline earnings, NAV and NTAV per share have been prepared on the following assumptions:

4.3.1    figures as reported are based on the published unaudited interim results of Primeserv for the six months ended 30 September 2012;

4.3.2    the pro forma earnings and headline earnings per share calculations assume the effective date of the Disposal Transaction was 1 April 2012, and the pro forma NAV and NTAV per share calculations assume the effective date was 30 September 2012;

4.3.3    the pro forma earnings and headline earnings per share calculations assume the collection of excluded assets of R9,5 million on the basis that such assets were excluded assets from the assumed effective date of 1 April 2012; and

4.3.4    a tax rate of 28% was applied to the pro forma adjustments.

30 May 2013

Bryanston

SPONSOR

Deloitte & Touche Sponsor Services (Pty) Limited

(Incorporated in the Republic of South Africa)

(Registration number 1996/000034/07)




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