TASTE HOLDINGS LIMITED - Additional Information in relation to the Starbucks Disposal and Withdrawal of Cautionary Announcement

Additional Information in relation to the Starbucks Disposal and Withdrawal of Cautionary Announcement

TASTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2000/002239/06)
Share code: TAS
ISIN: ZAE000081162
(“Taste” or “the Company”)


ADDITIONAL INFORMATION IN RELATION TO THE STARBUCKS DISPOSAL AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT


1.     INTRODUCTION

1.1.     Shareholders are referred to the Company’s SENS announcement of 1 November 2019   
         (“Announcement”), regarding the conclusion of an agreement on 31 October 2019
         (“Agreement”), by the Company, through its wholly-owned subsidiary Taste Food Franchising
         Proprietary Limited (“Taste Food”) with Rand Capital Coffee (South Africa) Proprietary Limited
         (formerly “K2019548958”) (“Purchaser”), a related party of the Company, in terms of which the
         Company agreed to dispose of its Starbucks franchise business in South Africa (“Starbucks
         Business”) as a going concern to the Purchaser (“Disposal”).

1.2.     In the Announcement, shareholders were advised to exercise caution when dealing in the
         Company’s securities until a further announcement regarding the fairness opinion to be
         obtained by the Company from an independent expert in relation the Disposal and the financial
         information relating to the Disposal had been published. The procurement of the fairness
         opinion was also a condition to the Disposal.

1.3.     The Company has obtained a fairness opinion from an independent expert, Bridge Capital
         Advisors, in relation to the Disposal and has set out the financial information relating to the
         Disposal in this announcement.

2.     FAIRNESS OPINION

2.1.     The Company has obtained a fairness opinion from an independent expert, Bridge Capital
         Advisors, acceptable to the JSE, confirming that the terms of the Disposal are fair as far as the
         shareholders of the Company are concerned (“Fairness Opinion”).

2.2.     The Fairness Opinion has been made available for inspection at the Company’s registered
         office, from the date of this announcement to 30 December 2019.

3.     FINANCIAL INFORMATION

3.1.     Shareholders should note that the financial information set out below is historic and does not
         factor in the following:

3.1.1.         the lease obligations of approximately R43.9 million for the 12 stores currently in
               operation;

3.1.2.         the future capital obligations pursuant to the license agreement with Starbucks, estimated
               to be R350 million, in order to meet the minimum store build obligations; and
3.1.3.         the capital required to fund the Starbucks Business’ on-going and deteriorating operating
               losses.

3.2.     The audited loss after tax attributable to the Starbucks Business for the period ended 28
         February 2019, was R25.6 million, based on the audited annual financial statements of Taste
         for the year ending 28 February 2019, which were prepared in terms of IFRS.

3.3.     The value of the net assets comprising the Starbucks Business as at 28 February 2019, being
         the date of the last audited annual financial statements of Taste, was R64.1 million. The
         majority of the aforementioned net assets consists of Starbucks proprietary shop fittings and
         equipment.

4.     CONDITIONS PRECEDENT

       Shareholders are reminded that the Disposal remains subject to the fulfilment of certain
       conditions precedent set out in the Agreement.

5.     WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

       As the Fairness Opinion has now been completed and the financial information relating to the
       Disposal have been published, shareholders are advised that caution is no longer required to be
       exercised by shareholders when dealing in the Company’s securities.

Johannesburg
29 November 2019

Sponsor
PSG Capital

Date: 29-11-2019 01:12:00
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