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HOWDEN AFRICA HOLDINGS LIMITED - Agreement amendment

Release Date: 06/07/2015 15:00
Code(s): HWN     PDF:  
Wrap Text
Agreement amendment

Howden Africa Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/002982/06)
Share code: HWN
ISIN: ZAE000010583
("HAHL" or “the Company”)

Agreement amendment

Shareholders are referred to the announcement dated 1 June 2015 wherein, inter alia, it was
stated that HAHL plans to adopt a formal 10% cap on the management services and ERP
software license agreements (“the Agreements”) concluded with Howden Group Limited (an
indirect subsidiary of Colfax Corporation) in order to provide clarity and certainty to HAHL’s
stakeholders in relation to the scope and magnitude of costs of these arrangements.

The board of HAHL now advises that an addendum to the Agreements has been concluded
which provides for the 10% cap which has been based on the market capitalization of the
Company as at 1 June 2015. Accordingly, the combined maximum fees for the Agreements
will not exceed R225 056 469 until the respective expiry of these Agreements. The
management services fees under the management services agreement shall be payable
until 31 December 2017, the ERP project fees under the ERP software agreement shall be
payable until 31 December 2022 and the ERP support charges under the ERP software
agreement shall be payable until 31 December 2020. Should the Agreements need to be
extended beyond their respective expiry dates, or new agreements are entered into for
whatever reason, the HAHL board will ensure that in consultation with the JSE, those new or
extended agreements are in compliance with the JSE Listings Requirements. Furthermore,
stakeholders are assured that the highest standards of corporate governance will be
observed in any renewal of or amendments to any of the Agreements.

We believe that this is both a reasonable and practical response to shareholders who have
expressed concern regarding the nature and effects of these Agreements, and wish to re-
emphasize that the Agreements are an imperative for the Company, are market related and
form a part of management’s key mandate to manage the Company’s business based on
best practice and utilizing the resources and knowhow of the greater international Howden
group.

The JSE has been consulted throughout this process. Typically, the nature of the
Agreements would not fall within the regulatory sphere of Section 9 of the JSE Listings
Requirements (the “Requirements”) on the basis that it is deemed to be in ordinary course of
business of the Company and does not constitute a transaction. The Company has also
ensured that it met a further exclusion element pursuant to Section 9 of the Requirements by
adopting a voluntary 10% cap on the Agreements based on the market capitalization of the
Company, as advised above.

Booysens, Johannesburg
6 July 2015

Sponsor:
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited

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