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YRK - York - Press Release - York Confirms Landmark Acquisition Of Global Forest Products The York Timber Organisation Limited (Registration number 1916/004890/06) Share code: YRK ISIN: ZAE000008108 ("York" or "the Company") YORK CONFIRMS LANDMARK ACQUISITION OF GLOBAL FOREST PRODUCTS JSE listed timber company, The York Timber Organisation Limited ("York"), has confirmed its acquisition of Global Forest Products (Pty) Limited and South African Plywood (Pty) Limited (collectively referred to as GFP) for a purchase price of R1.695 billion. The transaction is effective retrospective to 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. Making the announcement, York CEO Lance Cooper said that the company had acquired the shares in and claims against GFP from Global Environmental Fund and the IDC in one indivisible transaction, having met all suspensive conditions. This includes approval by the Competition Authorities and shareholder approval at a general meeting held on 9 July 2007. The purchase, which is underpinned by the value of GFP`s forests, is being effected through a rights offer, debt facilities and a vendor consideration issue of shares in York to the IDC. Through the rights offer, R350 million cash will be raised, which is fully underwritten by York`s controlling shareholder Blackstar Investors plc. Pending implementation of the rights offer at the beginning of August, money raised through a specific issue for cash and bridging finance has arranged with Rand Merchant Bank (RMB) will be utilised to settle the purchase consideration initially. The remainder of the cash purchase consideration will be discharged through a series of loans amounting to approximately R845 million, made available to York in terms of agreements with RMB. Some R350 million of the IDC aggregate interest of approximately R500 million in GFP will be settled by way of a vendor consideration issue of York ordinary shares at R15.00 a share, after completion of the rights offer. The remaining R150 million of the IDC interest is specifically earmarked to enhance the 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. Commenting on the acquisition, 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 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 acquisition will materially enhance York`s saw milling capacity, securing its position as an important 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. Ends ISSUED FOR: YORK TIMBER ORGANISATION LIMITED: 013 750 8888 CONTACT : Lance Cooper, CEO: 083 227 4700 FAX NO : 013 750 1567 E-MAIL : lance@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 : 12 July 2007 Date: 12/07/2007 12:33:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
