W G WEARNE LIMITED - Potential transaction to dispose of the business of Wearne Precast (Pty) Ltd to a consortium led by Jade Capital

Potential transaction to dispose of the business of Wearne Precast (Pty) Ltd to a consortium led by Jade Capital

WG Wearne Limited
(Registration number: 1994/005983/06)
JSE Share code: WEA ISIN: ZAE000078002
(“Wearne” or “the Company” or “the Group”)

POTENTIAL TRANSACTION TO DISPOSE OF THE BUSINESS OF WEARNE PRECAST (PTY) LTD TO A CONSORTIUM
LED BY JADE CAPITAL PARTNERS (PTY) LTD AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT


1. INTRODUCTION

Further to the cautionary announcement on 8 April 2016 shareholders are advised that Wearne has reached an
advanced stage in its negotiations with a consortium led by Jade Capital Partners (Pty) Ltd (“the consortium”) in
regards to the proposed disposal of the business as a going concern of Wearne Precast (Pty) Ltd (“Precast”) to a
new company (“NewCo”) to be incorporated by the consortium (“the transaction”).

2. RATIONALE AND BACKGROUND FOR THE TRANSACTION

Precast has been identified as non-core and the transaction will be the Group’s first step in a restructuring
process to divest of its non-core assets.

3. TERMS AND CONDITIONS OF THE TRANSACTION

The transaction is subject to formal written agreements being entered into between the parties. In this regard, the
parties have reached in-principle agreement with regard to the following:
3.1     NewCo will acquire the business as a going concern.
3.2     The salient terms of the transaction will include:
        - Consideration of R20 million for Plant and Equipment;
        - In addition to the above stock will be acquired at the lower of cost or net realisable value on 60 day
            terms after the deduction of advanced payments received up to the effective date;
        - All other assets and all the liabilities will be excluded from the transaction; and
        - The immovable property owned by Wearne, on which Precast operates, is to be acquired by NewCo
            for R1 200 000 upon the relevant rezoning and subdivision being approved. The parties will enter
            into a lease agreement for the interim period.

3.3     The conditions precedent to the transaction include, among others:
        - The conclusion of funding agreements between Newco and its funders and the fulfilment of all
            conditions thereto;
        - The successful conclusion of a due diligence investigation by the consortium;
        - The conclusion of definitive agreements between Newco and Wearne in order to implement the
            transaction and the fulfilment of all conditions thereto; and
        - Obtaining shareholders’ approval for the transaction in a general meeting of shareholders.

3.4     The effective date proposed for the transaction is anticipated to be 1 July 2016.

4.    USE OF PROCEEDS

The transaction proceeds will be used to reduce debt and improve the liquidity position of the Group in
general.

5.    FINANCIAL INFORMATION IN RESPECT OF THE ACQUISITION
The net value of Precast, which is the subject of the transaction, was R6 183 458 as at the half year ended 31
August 2015. The profit attributable to Precast, which is the subject of the transaction, was R793 566 for the six
months ended 31 August 2015.

6.   CATEGORISATION OF THE TRANSACTION

The transaction constitutes a Category 1 transaction in terms of the JSE Listings Requirements. Accordingly, a
circular will be distributed to Wearne shareholders in due course providing further information relating to the
transaction and convening a general meeting of shareholders in order to obtain shareholder approval for the
transaction.



Designated Advisor
Exchange Sponsors


10 May 2016
Johannesburg

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