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Category 2 Transaction: Disposal of Tydstroom Abbatoir Business in Hartebeespoort
QUANTUM FOODS HOLDINGS LIMITED
(previously Business Venture Investments No 1792 Proprietary
Limited)
(Incorporated in the Republic of South Africa)
Registration Number: 2013/208598/06
Share Code: QFH
ISIN Code: ZAE000193686
(“Quantum Foods” or “the Company”)
CATEGORY 2 TRANSACTION: DISPOSAL OF TYDSTROOM ABBATOIR BUSINESS IN
HARTEBEESPOORT
1. THE TRANSACTION
Shareholders of the Company are hereby advised that the Company
and Quantum Foods Proprietary Limited, being a wholly-owned
subsidiary of the Company (“the Sellers”), have entered into an
agreement (“the Agreement”) with Sovereign Food Investments
Limited (“Sovereign”) and Crown Chickens Proprietary Limited
(“the Purchaser”), dated 7 May 2015, in terms of which the
Sellers will dispose of the Tydstroom abbatoir business in
Hartebeespoort, Gauteng (“the Business”), as a going concern,
which Business relates to the slaughtering and processing of
broilers for human consumption (“the Transaction”).
The Sellers, the Purchaser and Sovereign are hereinafter
collectively referred to as “the Parties”.
The effective date of the Transaction shall be the date being 5
business days after all the conditions precedent to the
Transaction, as set out in paragraph 4.1 to 4.6 below, have been
fulfilled (“the Effective Date”).
The Business comprises of the following:
1.1 portion 81 of the Farm No.488, Schurveberg, registration
division JQ, Gauteng, measuring 23.0723 hectares in extent
and held under deed of transfer T17648/2012(“the Farm”);
1.2 fixed assets, equipment and vehicles used in the Business;
1.3 stock-in-trade of the Business as at the close of business
on the day preceding the Effective Date;
1.4 the abattoir and processing facility known as Tydstroom
Abattoir, including all equipment; and
1.5 the contracts concluded by the Sellers in relation to the
Business as at the Effective Date, as agreed between the
Parties.
2. RATIONALE FOR THE DISPOSAL
The disposal will result in the Sellers exiting the broiler meat
market served from the Hartebeespoort abattoir in Gauteng. It
will furthermore result in an aligned broiler business model for
Quantum Foods in both the Western Cape and Gauteng, with Quantum
Foods being a contract producer of live broilers and not
participating directly in the broiler meat market.
3. PURCHASE CONSIDERATION
The purchase consideration for the Business is R120,000,000 (one
hundred and twenty million Rand) (“Purchase Consideration”),
which includes VAT at the rate of 0%, payable on the date of
registration of the transfer of the Farm into the name of the
Purchaser.
The Purchase Consideration shall be secured by a guarantee
issued in favour of the Sellers by a reputable financial
institution.
The Purchase Consideration shall be used by Quantum to increase
cash reserves available for investment in line with the
strategic priorities of the Quantum Foods group.
4. CONDITIONS PRECEDENT
The Transaction is subject to the following conditions
precedent, namely:
4.1. by no later than 31 December 2015, the unconditional
approval, in writing, of the applicable competition
authorities in terms of the Competition Act, No. 89 of
1998 in respect of the Transaction (or if such approval is
conditional, each of the Parties having approved such
condition in writing and delivered such written approval
to the other Parties) be obtained;
4.2. by no later than 31 December 2015, to the extent
necessary, all regulatory consents and other approvals,
including but not limited to the approval of the
Johannesburg Stock Exchange, be obtained;
4.3. by no later than 30 days from the date of signature of the
Agreement (“Date of Signature”), the Purchaser completing
a due diligence investigation to its satisfaction;
4.4 by no later than 45 days from the Date of Signature, the
Parties concluding a sale of business agreement in respect
of the Transaction, containing all the usual provisions
required for a transaction of this nature;
4.5 by no later than 45 days from the Date of Signature the
Sellers delivering to the Purchaser a copy of any special
resolutions required in terms of the Companies Act, No. 71
of 2008 (as amended); and
4.6 by no later than 45 days from the Date of Signature the
Parties concluding a broiler supply agreement, the
material terms of which have been agreed to between the
Parties.
The Parties may, by agreement in writing and by no later than
the dates stipulated for fulfilment thereof, waive or extend the
date for fulfilment or waiver of all or any of the conditions
precedent contained in paragraphs 4.1 to 4.6 above (unless any
such condition is in law incapable of waiver).
5. EXCLUSIVITY
The Sellers have granted exclusivity to the Purchaser and
Sovereign from the Date of Signature until the earlier of: (i)
the Effective Date; or (ii) the date on which the Agreement
fails as a result of the non-fulfilment of any of the conditions
precedent, as set out in paragraphs 4.1 to 4.6 above, or is
terminated.
6. FINANCIAL EFFECTS
The value of the net assets attributable to the Business is R90
million and the attributable loss of the Business, excluding an
impairment of the Business assets for the year ended 30
September 2014 was R26 million.
The financial information contained in this announcement has not
been reviewed or reported on by the Company’s auditors.
7. CATEGORISATION
The Transaction is a Category 2 transaction for the Company as
contemplated in the Listings Requirements of the JSE Limited.
Wellington
11 May 2015
Sponsor
PSG Capital Proprietary Limited
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