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The Disposal Of Bsi’s Interest In Qinisa Steel Solutions Proprietary Limited
BSI Steel Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
JSE share code: BSS ISIN: ZAE000125134
(“BSI” or “the Company”)
ANNOUNCEMENT REGARDING THE DISPOSAL OF BSI’S INTEREST IN QINISA STEEL
SOLUTIONS PROPRIETARY LIMITED (“QINISA”)
1. INTRODUCTION
Shareholders are advised that on 4 April 2017 BSI entered into a sale agreement
(“Agreement”) with Grant Mackenzie (“Mackenzie”) and the trustees representing the
Jamand Trust (the “Trust”), in terms of which BSI will sell:
- its 45% interest in the issued share capital of Qinisa (“Sale Shares”) to
Mackenzie; and
- its loan account against Qinisa (“Shareholder Claim”) as at the Effective Date
(defined below) to the Trust (herein after collectively referred to as the
“Disposal”).
2. THE DISPOSAL
2.1 Nature of Qinisa’s business
Qinisa is steel value-add and trading business specialising in precision tube laser
processing and structural cut to size and CNC drilling operations.
2.2 Rationale for the Disposal
The move into more value-add and processing is not BSI’s core business.
Qinisa has not performed to expectations and has continued to make losses.
2.3 Consideration for the Disposal
The total purchase price for the Disposal is R9 000 740, being:
- R740 (“Sale Shares Price”) in respect of the Sale Shares; and
- R9 000 000 (“Claim Price”) in respect of the Shareholder Claim.
The Sale Shares Price will be settled in cash within three business days of the
Effective Date while the Claim Price will be settled in cash by no later than
31 March 2018. The Trust has pledged 18 000 000 BSI shares to BSI as security
against payment of the Claim Price.
The proceeds of the Disposal will be used to reduce the BSI group’s borrowings
and will also be applied to fund the BSI group’s working capital requirements.
2.4 Other significant terms of the Agreement
BSI will continue to provide support services including. human resources,
administration and IT to Qinisa until no later than 31 March 2018.
2.5 Conditions precedent and effective date
The Disposal was not subject to any conditions precedent and will be effective
from 31 March 2017 (“Effective Date”).
3. THE NET LIABILITIES AND LOSSES ATTRIBUTABLE TO QINISA
The value of the net liabilities that are the subject of the Disposal as at 30 September
2016, being BSI’s most recent interim period, was R5 805 726. The loss after tax
attributable to the net liabilities that are the subject of the Disposal for the six months
ended 30 September 2016 was R1 388 102.
4. CATEGORISATION OF THE DISPOSAL
The Disposal is below the size of a Category 2 transaction while the Trust is a related
party as contemplated in Section 10 of the JSE Limited Listings Requirements
(“Listings Requirements”) as it is a material shareholder of BSI. This announcement
has, therefore, been made in compliance with paragraph 21.11(c) of the Listings
Requirements, in terms of which all transactions with related parties must be announced
irrespective of the size of the transaction.
Johannesburg
4 April 2017
Designated Adviser and Corporate Advisor
Sasfin Capital (a division of Sasfin Bank Limited)
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