ELB GROUP LIMITED - Terms announcement in respect of the disposal of B&W Instrumentation and Electrical by ELB Engineering

Terms announcement in respect of the disposal of B&W Instrumentation and Electrical by ELB Engineering

ELB GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1930/002553/06)
ISIN: ZAE000035101
JSE Code: ELR
(“ELB” or “the Company”)

TERMS ANNOUNCEMENT IN RESPECT OF THE DISPOSAL OF B&W INSTRUMENTATION AND
ELECTRICAL BY ELB ENGINEERING

1.     BACKGROUND AND RATIONALE

       The board of directors of ELB is pleased to announce that its subsidiary, ELB Engineering (Pty)
       Ltd (“Engineering”) entered into an agreement with Matatrim Proprietary Limited (registration
       number 2018/474293/07) (“Matatrim”) on 16 April 2019, in respect of which the parties agreed
       terms of the disposal by Engineering of the entire issued share capital (“B&W Shares”) of its
       wholly-owned subsidiary, B&W Instrumentation and Electrical Proprietary Limited (“B&W”) to
       Matatrim (“the Transaction”).

       B&W is an electrical and instrumentation construction company which services the mining, oil
       and gas, chemical, industrial and utilities, power generation, transmission and distribution and
       renewable energy sectors across Sub-Saharan Africa, and has been in existence for over 40
       years. B&W also provides specialist earthing and lightning protection services and electrification
       systems for mobile equipment.

       The Transaction will enable B&W to raise external funding, to build its external client base and
       to focus on growing external revenue, given that B&W’s capacity has mostly been absorbed by
       ELB group operations in the past while part of the ELB group.

2.     TERMS OF THE TRANSACTION

2.1.   Consideration

       The consideration payable to Engineering for the B&W Shares is an amount of R1.00 (one rand),
       payable in cash.

2.2.   Suspensive conditions

       The Transaction is not conditional upon the fulfilment or waiver of any suspensive conditions.

2.3.   Effective date

       Notwithstanding the date of signature of the agreement, the effective date of the Transaction is
       2 April 2019 (“Effective Date”). All benefits of and risks in and to the B&W Shares will have passed
       to Matatrim on the Effective Date.

2.4.   Other significant terms

       Other warranties and terms that are standard for a transaction of this nature were agreed
       amongst the parties to the Transaction.



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3.    NET ASSET VALUE AND TOTAL NET INCOME AFTER TAX ATTRIBUTABLE TO THE
      SUBJECT OF THE TRANSACTION

      The provisional loss attributable to the B&W group was R152 million and the provisional negative
      net asset value attributable to the B&W group was R39 million.

      The above financial information has been sourced from unpublished management accounts and
      the Company is satisfied with the quality of such management accounts.

4.    CATEGORISATION

      The Transaction constitutes a category 2 transaction in terms of the JSE Listings Requirements.



Rivonia
26 April 2019

Sponsor and Corporate Advisor
Questco Corporate Advisory Proprietary Limited




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