BARLOWORLD LIMITED - Category 2 Transaction Announcement : Disposal of Iberian Equipment Operations

Category 2 Transaction Announcement : Disposal of Iberian Equipment Operations

Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld” or “the Company")

CATEGORY 2 TRANSACTION ANNOUNCEMENT: Disposal of Iberian Equipment
Operations

1. Background and Rationale

Following the strategic review concluded in 2017, Barloworld has been
considering various options to address the underperformance of its Iberian
Caterpillar operations. The group communicated its intentions in an
announcement during September 2017 and the board classified the assets and
liabilities as held for sale at the end of September 2017.

Negotiations with an interested party have successfully concluded and the
board has approved the entering into of a sale and purchase agreement with
Tesa S.p.A. (Tesa), a privately owned Italian Group, on the conditions set
out below.

Tesa, through its subsidiary CGT, became the Caterpillar dealer for the
north of Italy in 1934 and in 2010 acquired the service territory for the
south of Italy subsequently becoming the sole dealer for Italy. In 1990
they also acquired the service territory of the Balkans, operated under the
name of Teknoxgroup.

2. Particulars of the proposed transaction.

Barloworld Limited acting through its wholly owned UK subsidiary Barloworld
UK Limited will sell 100% of the issued shares in Barloworld International,
the holding company of the Iberian businesses, to Tesa.

The sale price will be determined at the closing date using the
shareholders’ equity attributable to Barloworld after negotiated asset
impairments and an agreed premium. Part of the purchase price, €10 million
(R151 million), is deferred and payable in equal instalments over a 5-year
period. On closing Tesa will settle a maximum of €142 million (R2,144
million) in cash. This will subsequently be adjusted after the true up
period. The overall proceeds of the transaction are estimated to be €160
million (R 2,416 million). The group has also provided specific warranties
and indemnities as well as a guarantee in respect of its obligations post-
closing.

(Exchange rate of ZAR: EUR of 15.10:1)

The price represents a small premium to the net asset value of the business
at 30 September 2017 and the proceeds will remain offshore to be used to
fund future growth initiatives that are currently under consideration.
3. Consents and Conditions Precedent

Caterpillar has given the necessary consent in respect of the transaction,
which remains subject to the following conditions precedent:

   -   Spanish and Portuguese competition approval
   -   Consent and release by the group’s lenders under various funding
       agreements.

4. About the Iberian Caterpillar operations

Barloworld has represented Caterpillar in Spain and Portugal for the last
26 years. The business employees around 1,075 full time employees.

5. Closing Date

The transaction is expected to close no later than 2 July 2018 after all
conditions have been met.



6. Net Asset Value and Profits attributable to the Iberian Business as at
   30 September 2017

Net assets: R2 424 million (€ 152 million)

Loss after tax: R269 million (€ 17 million)

(Exchange rate of ZAR: EUR = 15.96: 1)

The historical financial information for Equipment Iberia was prepared in
accordance with International Financial Reporting Standards, which was
audited by the group’s external auditors, Deloitte and Touché.

7. Categorisation
The sale price represents 6.4% of Barloworld’s market capitalisation at the
date of signing of the agreement which is a Category 2 transaction in terms
of the JSE Listings Requirements.



On behalf of the board
LP Manaka                              Sandton
Secretary                              25 April 2018

Sponsor: J.P. Morgan Equities South Africa Proprietary Limited

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