To view the PDF file, sign up for a MySharenet subscription.

INSIMBI REFRACTORY & ALLOY SUP LIMITED - Detailed Cautionary Announcement - Proposed Acquisition by Insimbi of the AMR Group

Release Date: 22/06/2016 14:59
Code(s): ISB     PDF:  
Wrap Text
Detailed Cautionary Announcement - Proposed Acquisition by Insimbi of the AMR Group

Insimbi Refractory and Alloy Supplies Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2002/029821/06)
Share code: ISB ISIN: ZAE000116828
(“Insimbi” or “the Company”)

DETAILED CAUTIONARY ANNOUNCEMENT – PROPOSED ACQUISITION BY INSIMBI OF THE
AMR GROUP

1.   Introduction

The board of directors of Insimbi (“the Board”) is pleased to announce that in terms of a memorandum
of understanding (“MOU”) concluded between Insimbi (“the Purchaser”) and the controlling
shareholders of Amalgamated Metals Recycling Proprietary Limited, Amalgamated Metals Recycling
SA Proprietary Limited, Amalgamated Metals West Rand Proprietary Limited (collectively, the AMR
Group”) the Purchaser intends to acquire 100% of the AMR Group, as well as the properties from
which the AMR Group operates (“the AMR Transaction”).

2.   Nature of the business of the AMR Group

The business conducted by the AMR Group is that of the aggregation, processing, recycling and sale
of scrap metal, which business is conducted from three facilities on the properties located at Devland,
Roodepoort and Booysens.

3.   Rationale for the Transaction

The rationale for the AMR Transaction is to create a larger, diversified group of companies, and to
become a significant player in the metals market. The acquisition will also create a significant Rand
hedge benefit to the group. The combined group will have approximately R3 billion in revenue and a
profit after tax of R 80 million (based on historical Insimbi and AMR Group results) for the year ended
29 February 2016.

It is envisaged that the transaction will also allow for improved share liquidity.

4.   Transaction Consideration

The purchase price for the AMR Group, and the properties shall be an aggregate amount of R284.1
million (“AMR Purchase Price”), of which R234.1 million will be payable in cash. The cash requirement
will be raised via a specific placement of Insimbi shares, and term debt facilities to be negotiated. The
balance of R 50 million will be settled in Insimbi shares, which are to be issued at R1.00 per Insimbi
share.

5.   Conditions Precedent
The Transaction will be conditional upon the conclusion of, amongst others, the following conditions
precedent:

-   Conclusion of definitive sale and purchase agreements; and
-   All regulatory approvals, as required in terms of the JSE Limited Listings Requirements (“LR”)
    and the applicable competition authorities.

6.   Categorisation of the Transaction

The full details of the categorisation will be issued in due course.

7. Shareholder to act with caution

Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities
until further announcements are made.

Johannesburg
22 June 2016
Corporate Advisor and Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor for Insimbi: Falcon & Hume Incorporated Attorneys
Legal Advisor for AMR: Chris Boulle Incorporated

Date: 22/06/2016 02:59:00 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.

Share This Story