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Acquisition of an Indirect 12,5% Shareholding in GRI Wind Steel South Africa Proprietary Limited (“GRI WSSA”)
HULISANI LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2015/363903/06)
Share code: HUL ISIN: ZAE000212072
(“Hulisani” or “the Company”)
ACQUISITION OF AN INDIRECT 12,5% SHAREHOLDING IN GRI WIND STEEL
SOUTH AFRICA PROPRIETARY LIMITED (“GRI WSSA”)
1. INTRODUCTION
Hulisani is pleased to announce that it has entered into an
agreement to acquire an indirect 12,5% shareholding in GRI
WSSA from GRI Renewables Industries, SL (“GRI”) for a
subscription price of R41,25 million by way of a cash
subscription for a 50% shareholding of Pele SPV13
Proprietary Limited (“Pele13”)(the“Hulisani Subscription”),
which in turn has entered into an agreement with GRI to
acquire a 25% shareholding in GRI WSSA (the “Acquisition”)
for an amount of R82,5 million.
In addition, Hulisani has subscribed for preference shares
to the amount of R41,25 million in Pele198 (RF) Proprietary
Limited (“Pele198”), to enable Pele198 to fund its indirect
12,5% shareholding in GRI WSSA by way of subscription for a
50% shareholding of Pele13 for a subscription price of R41,25
million (the “Preference Share Subscription”).
The preference shares pay a dividend at a dividend rate
equivalent to the Prime Rate plus 2% per annum and are
redeemable in 9 years. The preference shares are secured
by a guarantee by Pele Green Energy Proprietary Limited
(“PGE”) in favour of Hulisani guaranteeing the performance
of Pele198’s obligations under the Preference Share
Subscription, a pledge and cession by PGE of its shares in
Pele198 in favour of Hulisani and a cession and pledge by
Pele198 of its bank accounts and shares and shareholder
loans in Pele13 in favour of Hulisani (the “Security
Documents”).
2. RATIONALE FOR THE ACQUISITION
Hulisani was established to pursue the acquisition of, and
investment in, companies focused on, and operating in, the
energy sector and which evidence good potential for growth.
Since the conclusion by Hulisani of its 6.67% effective
shareholding in the Kouga Wind Farm, the Company has also
acquired a 66% shareholding in the Rustmo1 Solar Farm.
The Acquisition provides Hulisani with vertical integration
into the wind farm supply chain, both by providing local
content to South African operators, but through the
relationship with GRI, access to the ever-growing
international demand for components to the wind generating
industry. In addition, the preference share funding is
significant as it enables further black participation in the
manufacturing value chain.
A significant portion of GRI’s order book is for overseas
clients, which through the relationship with GRI is
anticipated to grow.
3. INFORMATION ON GRI RENEWABLE INDUSTRIES S.L “GRI”
GRI is a Spanish company incorporated in 2008 as a subsidiary
of Corporacion Acek, and has a global presence focusing on
the manufacturing of wind towers. GRI has 13 factories in
Spain, Brazil, India, China, United States, Turkey and South
Africa, employing over 3 700 people with a manufacturing
capacity of approximately 2 000 towers and 100 000 tons of
flanges per annum. GRI concentrates its efforts in
integrating all the main industrial processes to enhance its
know-how and reduce supplier risks.
4. INFORMATION ON GRI WIND STEEL SOUTH AFRICA “GRI WSSA”
GRI WSSA opened its wind tower manufacturing plant in
Atlantis, Cape Town, in 2014 with the view to enhance clean
and renewable energy in the country.
The goal of GRI WSSA is to provide the local and
international market with wind towers (it will supply more
than 150 towers per year) thus contributing to the strong
development of renewable energy in South Africa. The
facility has also created more than 300 jobs of which
approximately 250 employees will be from Atlantis and the
surrounding area.
Shareholders are advised that the value of the net assets
of GRI WSSA for the year ended 31 December 2016 is R115
million and that it sustained a loss of R13,5 million due
to the ramp up process and transfer of skills. That
notwithstanding, for the first three months of the 2017
fiscal year, GRI WSSA’s management accounts reflect a profit
after tax of R7.75 million.
Since 2008, GRI has consolidated its position as the leading
industrial supplier in the renewable energy markets and GRI
WSSA has a promising pipeline of orders for the next 5 years.
5. CONDITIONS PRECEDENT TO THE HULISANI SUBSCRIPTION AND THE
PREFERENCE SHARE SUBSCRIPTION
The Preference Share Subscription is conditional upon,
amongst others, Pele198 fulfilling the conditions precedent
under the Security Documents. The Hulisani Subscription is
conditional upon, amongst others, the Preference Share
Subscription becoming unconditional.
The effective date will be the earlier of the satisfaction of
the conditions precedent under the Preference Share
Subscription and the Hulisani Subscription or 31 July 2017.
6. CATEGORISATION
In aggregate, Hulisani Subscription and the Preference Share
Subscription qualify as a Category 2 acquisition in terms
of the JSE Listings Requirements.
Johannesburg
20 July 2017
Sponsor: PSG Capital Proprietary Limited
Date: 20/07/2017 04:59:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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