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YRK - York - York`s Strategic Acquisition Of Global Forest Products & Sa Plywood The York Timber Organisation Limited (Registration number 1916/004890/06) Share code: YRK ISIN: ZAE000008108 ("York" or "the Company") YORK`S STRATEGIC ACQUISITION OF GLOBAL FOREST PRODUCTS & SA PLYWOOD JSE listed timber company, The York Timber Organisation Limited (York), has announced that it is to acquire 100% of Global Forest Products (Pty) Limited and South African Plywood (Pty) Limited, collectively referred to as GFP, for a purchase price of R1,694 billion, effective 30 June 2007. GFP is an environmentally sustainable, vertically integrated forestry company, headquartered in Sabie, managing 56 805 hectares of certified plantation forests. GFP also owns and operates three large sawmills and a plywood plant. The GFP yield is between 600 000 m3 and 700 000 m3 of pine logs per annum on a sustainable basis. The company also has 29 101 hectares of land reserved for conservation, streams, natural heritage sites, roads and access routes. York will acquire the shares in and claims against GFP from Global Environmental Fund and the IDC in one indivisible transaction, which is subject to certain suspensive conditions. The IDC holds an effective 30% interest in GFP, which will be exchanged for ordinary shares in the capital of York through a subscription by the IDC at a value to be announced in due course. Some R150 million of the IDC interest is specifically earmarked to enhance the previously announced broad-based BEE and staff participation in the enlarged York group. The specific purpose of the BEE and staff transaction will be the upliftment of communities in the geographic areas in which York and GFP operate. The purchase price will be further funded through the issue of additional York shares amounting to R350 million. Subscription for this new equity will be through a claw-back rights offer to York shareholders, fully underwritten by Blackstar Investors plc. Blackstar is the controlling shareholder of York, having recently acquired its interests in York from companies owned and controlled by Ivor and Solly Tucker. The remainder of the purchase price will be paid through approved loan facilities available to York from Rand Merchant Bank for the provision of up to R1,23 billion in senior and mezzanine loan facilities. Commenting on the acquisition, York CEO Lance Cooper says that it will result in York boosting its forestry ownership to levels at which more than 70% of the enlarged group`s forecast sawmill log input will be internally generated. "This is in line with York`s strategy to secure the supply of its timber on a long term, sustainable basis and, more importantly, at competitive input prices," he notes. The impact of the input cost saving between the spot price and York`s own supply through GFP and its existing plantations, is expected to materially enhance the company`s earnings. In addition, Cooper says York`s management expects that log recoveries and efficiencies historically achieved by GFP will be improved to approach levels currently attained by York`s sawmills. "This should result in further earnings growth not currently derived by GFP on a stand-alone basis," he says. The purchase price is underpinned by the value of GFP`s forest. "The acquisition will materially enhance York`s saw milling capacity, securing its position as a leading domestic forestry resource company, capable of supplying a buoyant market that continues to be fuelled by unprecedented infrastructure and construction growth rates, both locally and abroad," says Cooper. "York remains the only JSE listed timber company through which investors are able to gain focused exposure to assets of this nature," he points out. "This is a life changing opportunity for both companies, as they merge and improve a number of highly efficient processing units underpinned by sustainable raw material supplies. The merged entity provides greater stability to the highly efficient York mills, as well as improved efficiencies for the GFP mills by way of a cross pollination of processing techniques." says Cooper. "There is great scope for affirmative action in the new merged entity with its eight processing plants. Black sawmill managers will be learn the ropes of management at our smaller operations and move up to more complex operations as their skills and experience increase," he explains The acquisition is conditional on the fulfillment of certain suspensive conditions, including approval by the JSE and any other relevant regulatory authorities; approval by York shareholders; approval by the competition authorities; and the consent of the Exchange Control Department of the South African Reserve Bank. As further announcements are to be made on the reviewed financial effects, when the salient dates and times of the acquisition are finalized, and when any of the conditions precedent have been fulfilled or waived, York continues to trade under a cautionary announcement. Ends ISSUED FOR: YORK TIMBER ORGANISATION LIMITED: 012 804 9730 CONTACT: Lance Cooper, CEO: 083 227 4700 or John Lehman, CFO: 082 388 8998 FAX NO: 012 804 8611 E-MAIL: Lance@yorkcor.co.za; john@yorkcor.co.za WEBSITE: www.yorkcor.co.za ISSUED BY: Letsema Communications CONTACT: Tish Stewart 011 442 5536 / 082 443 6399 Jonathan Mahapa 011 325 4195
FAX NO: 011 325 4199 E-MAIL: tish@letsemacom.co.za; jonathan@letsemacom.co.za DATE: 02 April 2007 Date: 02/04/2007 12:00:50 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
