TONGAAT HULETT LIMITED - Tongaat Hulett disposes of its interest in Tongaat Hulett (Namibia) (Proprietary) Limited

Tongaat Hulett disposes of its interest in Tongaat Hulett (Namibia) (Proprietary) Limited

Tongaat Hulett Limited
(Registration number 1892/000610/06)
Share code: TON
ISIN ZAE000096541
("Tongaat Hulett" or "the Company")

TONGAAT HULETT DISPOSES OF ITS INTEREST IN TONGAAT HULETT (NAMIBIA)
(PROPRIETARY) LIMITED

1.   Introduction

     Shareholders of Tongaat Hulett are referred to the announcements released by the
     Company on SENS, in particular the announcement of 31 May 2019 in relation to the
     ongoing strategic and financial review ("Strategic Review") of the Tongaat Hulett group.

2.   Background and rationale

     As part of the Strategic Review, the board of directors of Tongaat Hulett ("Board") is
     pleased to announce that it has approved the disposal of the business of Tongaat Hulett
     (Namibia) (Proprietary) Limited ("THN" or "the Seller"), in which Tongaat Hulett owns an
     effective 51% beneficial interest.

     Accordingly, THN has entered into a sale of business agreement ("Sale Agreement") to
     sell the entire sugar packaging and distribution business ("Namibian Business") of THN
     to Bokomo (Namibia) (Proprietary) Limited ("Bokomo") as a going concern
     ("Proposed Transaction").

     Notwithstanding that THN is a strong and well-established business in Namibia, the Board
     has considered it as non-core and is of the view that its disposal would allow the Namibian
     Business to grow into new areas while facilitating Tongaat Hulett's access to the market
     via long term sugar and related products supply agreements concluded with Bokomo.

3.   Salient terms of the Proposed Transaction

     The Proposed Transaction will become effective from the first calendar day following the
     calendar month during which the last of the suspensive conditions in the Sale Agreement
     is fulfilled or waived ("the Effective Date").

     The risk in, and benefit of the Namibian Business will pass to Bokomo on the Effective
     Date.

     The purchase price on a debt free basis for the Namibian Business is N$220 000 000
     (R220 000 000) payable in cash on closing, subject to a post-closing adjustment relating
     to any variation from the agreed normalised working capital level of N$25 000 000 (R25
     000 000). Tongaat Hulett, as 51% beneficial owner of the Seller, will ultimately share in
     51% of the proceeds from the sale, and assuming no post-closing adjustments are made
     to the purchase price, 51% of the proceeds will equate to N$112 200 000 (R112 200 000)
     before deductions for taxes and transaction costs are made. Tongaat Hulett plans to use
     its share of the proceeds to reduce its debt levels.

4.   Conditions Precedent

     The implementation of the Proposed Transaction is conditional upon the fulfilment or
     waiver (as applicable) of, amongst others, the following suspensive conditions:

        -   the Namibian Competition Commission approving the Proposed Transaction and,
            in particular, the sale of the Namibian Business; and

        -   the completion of a due diligence investigation into the Namibian Business to the
            satisfaction of Bokomo by no later than 30 November 2019.

     Shareholders are advised that the due diligence investigation is largely complete and the
     process for filing with the Namibian Competition Commission is underway.

5.   Net asset value and Profit attributable to the Seller

     The net asset value attributable to the Namibian Business as at 31 March 2019 was N$37
     152 135 (R37 152 135). Profit after tax for the year ended 31 March 2019 was N$30 130
     633 (R30 130 633), while attributable earnings were N$15 366 623 (R15 366 623). This
     information has been extracted from the unpublished management accounts and the
     Company confirms that it is satisfied with the quality of such management accounts.

     This financial information has however not been reviewed or reported on by Tongaat
     Hulett’s external auditors.

6.   Categorisation

     The Proposed Transaction is categorized as a category 2 transaction in terms of the
     Listings Requirements of the JSE Limited and accordingly no shareholder approval is
     required.


     19 November 2019


      Corporate Advisor and Transaction Sponsor
      PricewaterhouseCoopers Corporate Finance Proprietary Limited


      Legal Advisors to Tongaat Hulett
      Webber Wentzel

      Legal Advisors to Bokomo
      Engling Stritter & Partners


      Company Sponsor
      Investec Bank Limited

Date: 19/11/2019 01:00:00
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