BSI STEEL LIMITED - Disposal of immovable property

Disposal of immovable property

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 IMMOVABLE PROPERTY

1.   INTRODUCTION
     Shareholders are advised that on 15 November 2017 BSI’s wholly-owned property
     owning subsidiary Red Chip Investments (Proprietary) Limited (“Seller”) entered into a
     sale agreement (“Agreement”) with an entity trading as Rock Solid Properties
     (Proprietary) Limited (“Purchaser”).
     In terms of the Agreement, the Purchaser will acquire the property known as Erf 2229
     Shorts Retreat situated at 46 Eden Park Drive, Murrayfield Park, Shorts Retreat,
     Pietermaritzburg (“Property”) and all the furniture, fittings and equipment (“Furniture
     and Fittings”) situated thereat from the Seller (“Disposal”). The parties have also
     agreed that the Seller will lease a portion of the administration building for a period of 24
     months from the date of transfer of the Property.

2.   THE DISPOSAL
     2.1    The nature of the Seller’s business

            The Seller owns the Property from which the Company’s Pietermaritzburg
            operations are conducted.

     2.2    Rationale for the Disposal

            The Disposal has been effected in line with BSI’s strategy of relocating the
            Company’s administration function to the BSI Kliprivier office in Gauteng.

     2.3    Consideration for the Disposal
            The total purchase price for the Disposal is R28 million (“Purchase
            Consideration”) comprising R26 million for the Property and R2 million for the
            Furniture and Fittings.
            The Purchase Consideration will be settled in cash upon transfer of the Property
            to the Seller.
            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    Conditions precedent and effective date
            The Disposal was not subject to any conditions precedent and will be effective
            upon the transfer of the Property from the Seller to the Purchaser.

3.   THE NET ASSETS AND PROFITS ATTRIBUTABLE TO THE PROPERTY AND
     FURNITURE AND FITTINGS
     As set out in the Seller’s most recently reviewed annual financial statements for the year
     ended 31 March 2017 which were prepared in accordance with International Financial
     Reporting Standards:
        -   the value of the Property as at 31 March 2017 was R23 171 379;
        -   the value of the Furniture and Fittings was R454 761; and
        -    the costs attributable to the Property and Furniture and Fittings (“Disposal
            Assets”) for the year ended 31 March 2017 were R1 027 093. There was no
            income attributable to the Disposal Assets for the period under review as the
            Property was owner occupied.

4.   CATEGORISATION OF THE DISPOSAL
     The Disposal is a Category 2 transaction as contemplated in Section 9 of the JSE
     Limited Listings Requirements.

Johannesburg
17 November 2017

Designated Adviser and Corporate Advisor
Sasfin Capital (a member of the Sasfin Group)

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