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Category 1 disposal of investment in Torre
STELLAR CAPITAL PARTNERS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/015580/06)
Share code: SCP ISIN: ZAE000198586
(“Stellar Capital”)
CATEGORY 1 DISPOSAL OF INVESTMENT IN TORRE
1. Introduction
Shareholders are referred to the announcement released by
Torre Industries Limited (“Torre”) on the Stock Exchange News
Service (“SENS”) on 12 November 2018 wherein Torre
shareholders were advised that Torre has received a firm
intention from Main Street 1641 Proprietary Limited, a special
purpose vehicle established by Ethos Mid-Market Fund I and
Apex Partners Proprietary Limited collectively (“Consortium”)
to make an offer (“Offer”) to acquire 100% of the issued
shares in Torre by way of a scheme of arrangement in terms of
the Companies Act, No. 71 of 2008 and the subsequent delisting
of Torre from the Main Board of the JSE Limited (
“Transaction”).
Stellar Capital is the holder of 57% of the issued shares of
Torre and has provided the Consortium with an irrevocable
undertaking to vote in favour of any and all resolutions
required to approve the Transaction as well as an undertaking
to accept the Offer (“Disposal”). The effective date of the
Disposal will be the operative date of the Transaction, which
is expected to be on or about 28 February 2019.
2. Consideration for the Disposal
The Offer will comprise a cash consideration of R1.05 and a
maximum deferred, top-up cash payment of up to R0.10 per Torre
share, subject to the achievement of performance targets and
the Scheme becoming operative (“Offer Consideration”).
In addition, the board of Torre declared a cash dividend of
R0.35 per Torre share on Monday, 12 November 2018, which will
be paid to Torre shareholders on Monday, 3 December 2018
(“Cash Dividend”).
The aggregate cash proceeds payable to Stellar Capital, as a
result of the Transaction (including the Cash Dividend), is
expected to be between R410 841 780 and R440 187 621.
3. Further documentation
Further details relating to the Transaction will be included
in a circular to Torre shareholders, which will contain, inter
alia, a notice of the Torre general meeting, a form of proxy
and a form of acceptance, surrender and transfer ("Circular").
The Circular is expected to be posted to Torre shareholders on
or about Thursday, 20 December 2018. The salient dates in
relation to the Transaction will be published on SENS and in
the press by Torre at or about the posting date of the
Circular.
4. Rationale for the Disposal
Stellar Capital has communicated its commitment to reducing
its exposure to the Industrial sector in a practical and
organised process and, in turn, to ensuring that its long-term
approach results in improved shareholder returns and the
efficient allocation of capital.
The Cash Dividend and Offer Consideration represent a material
premium relative to the traded price of the Torre shares on
the JSE. Specifically, the Offer Consideration translates to a
44.67% premium to the 30-day volume weighted average traded
price of the Torre shares on the JSE as at 7 November 2018,
being the last practicable date prior to the date on which the
Offer was announced.
Stellar Capital will utilise the Disposal proceeds to reduce
levels of debt as part of the process to optimise its capital
structure.
5. Nature of the Business of Torre
Torre is a JSE Main Board listed industrial group which
provides value added sales and rentals of branded capital
equipment, the distribution of high-quality aftermarket parts
and the delivery of critical support services to its
customers’ expansion programmes.
6. Conditions Precedent to the Disposal
The Offer constitutes an "affected transaction" as defined in
section 117(1)(c) of the Companies Act. The Offer will be
implemented by way of the Scheme.
The Offer is subject to the fulfilment or waiver (as the case
may be) of the conditions as set out in the Torre announcement
relating to the Transaction.
In the event that the Scheme becomes operative, the listing of
Torre’s Shares on the Main Board of the JSE will be
terminated, and Torre shareholders will be deemed to have sold
all of their Torre Shares for the Offer Consideration.
7. Net assets and profits of Torre
The value of the net assets of Torre as reported at 30 June
2018 amounts to R834 million (eight hundred and thirty-four
million rand). The loss after tax reported for the year ended
30 June 2018 attributable to Torre is R59 million (fifty-nine
million rand).
This audited historical financial information for Torre, as
contained in its 2018 Integrated Annual Report was prepared in
accordance with International Financial Reporting Standards.
8. Categorisation
The Disposal constitutes a category 1 transaction in terms of
section 9.5(b) of the JSE Limited Listings Requirements. No
circular or shareholders’ approval are required in terms of
Stellar Capital’s Investment Policy as approved by the JSE
Limited and Stellar Capital shareholders.
Cape Town
13 November 2018
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 13/11/2018 12:00:00 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.
