STEFANUTTI STOCKS HOLDINGS LIMITED - Disposal of property

Disposal of property

     Stefanutti Stocks Holdings Limited
     (Incorporated in the Republic of South Africa)
     (Registration number 1996/003767/06)
     Share code: SSK      ISIN: ZAE000123766
     (“Stefanutti Stocks” or “the Group” or “the Company”)


     DISPOSAL OF PROPERTY


1.   INTRODUCTION


     Shareholders are advised in terms of Section 9 of the JSE Limited Listings Requirements, that Stefanutti
     Stocks Proprietary Limited (“the Seller”), a wholly-owned subsidiary of the Company, has entered into an
     agreement (“the Agreement”) dated 16 May 2022 with Badenoch Investments Proprietary Limited,
     registration number 1977/003032/07, ("the Purchaser") to dispose of a property (“the Proposed
     Transaction”) being Portion 64 of the Farm Rietfontein 63 (IR), Province of Gauteng, measuring
     approximately 47 252m², more commonly known as 176 Barbara Road, Henville, Germiston (“the Barbara
     Road Property”).


2.   THE PURCHASER

     The Barbara Road Property will be purchased by the Purchaser for a purchase consideration of
     R33 000 000 (Thirty three million Rand) excluding Value Added Tax (“VAT”), that is R37 950 000 (Thirty
     seven million, nine hundred and fifty thousand Rand) with VAT (“the Purchase Consideration”), subject to
     the fulfilment of conditions precedent typical of a transaction of this nature.


3.   BACKGROUND AND RATIONALE FOR THE TRANSACTION


     As previously disclosed to Stefanutti Stocks Shareholders in various announcements, the most recent being
     the Unaudited Condensed Consolidated Results of Stefanutti Stocks for the 6 months ended 31 August
     2021 published on SENS on 25 November 2021 and the SENS announcement dated 1 March 2022, the
     Restructuring Plan has been approved by both the Board of Directors and the Lender Group and envisages
     inter alia the sale of non-core assets as well as the sale of certain divisions/subsidiaries to achieve its
     purpose and objectives.


     The purpose of the Restructuring Plan is to put in place an optimal capital structure and access to liquidity
     to position the Group for long-term growth. The Proposed Transaction forms part of the Restructuring Plan
     and is in furtherance of achieving its objectives.

     The Barbara Road Property, which has been owned by Stefanutti Stocks since 6 July 2012, will be disposed
     of pursuant to the Proposed Transaction.


4.   CONDITIONS PRECEDENT
     In terms of the Agreement, the Seller gives certain warranties, undertakings and indemnities to the
     Purchaser which are customary for transactions of this nature. The Proposed Transaction is also subject to
     the fulfilment and/or waiver of conditions customary for transactions of this nature including:


        •    the Group obtaining the requisite written consents of the Lenders for the implementation of the
             Proposed Transaction;
        •    the board resolutions required to approve the Proposed Transaction having been adopted by the
             board of directors of the Group; and
        •    any applicable regulatory approvals required for the Proposed Transaction being obtained.


5.   EFFECTIVE DATE


     The Effective date will be the date on which the conditions precedent to the Proposed Transaction have
     been fulfilled or waived, as the case may be, and the Proposed Transaction becomes unconditional.


6.   NET ASSETS & ATTRIBUTABLE PROFITS


     As set out in the Annual Financial Statements of the Group for the period ended 31 August 2021 the Barbara
     Road Property is valued at R30 million. The Proposed Transaction will result in an accounting profit after
     incurring costs to sell the Barbara Road Property of R1,5 million plus VAT at 15% (Fifteen per centum).


7.   CONSIDERATION


     The Purchase Consideration for the Proposed Transaction is R33 000 000 (Thirty three million Rand)
     excluding VAT, that is R37 950 000 (Thirty seven million, nine hundred and fifty thousand Rand) with VAT.
     The Purchase Consideration will be settled as follows (i) within 7 calendar days of the signature of the
     Agreement, a non-refundable deposit of R1 million (one million Rand) will be deposited with the Seller’s
     conveyancers, who will hold the deposit in trust and (ii) the balance of the Purchase Consideration will be
     secured by way of a banker's guarantee made payable to the Seller or its nominee.


8.   APPLICATION OF PROCEEDS


     The proceeds of the Proposed Transaction will be applied to the reduction of Stefanutti Stocks' current
     funding facilities provided by the Lenders in accordance with the Restructuring Plan.


9.   THE DISPOSAL OF THE BARBARA ROAD PROPERTY


     Securities did not form part of the Purchase Consideration received.


10. CATEGORISATION OF THE TRANSACTION
For purposes of categorisation, the Proposed Transaction constitutes a Category 2 transaction in terms of
the Listings Requirements of the JSE Limited and accordingly does not require shareholder approval.



Johannesburg
17 May 2022
Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor: Webber Wentzel

Date: 17-05-2022 03:15:00
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