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ACCENTUATE LIMITED - Disposal of Pentafloor business

Release Date: 21/02/2019 16:55
Code(s): ACE     PDF:  
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Disposal of Pentafloor business

Accentuate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
JSE Share code: ACE ISIN: ZAE000115986
(“Accentuate” or “the Company”)

DISPOSAL OF PENTAFLOOR BUSINESS

INTRODUCTION:

Accentuate is a group of companies involved in the water treatment, chemical blending, industrial and
commercial cleaning and metal treatment sectors, as well as the flooring market.

In terms of section 9.15 of the Listings Requirements, shareholders are advised that Accentuate, has
agreed to the key terms of a proposed transaction (“Sale of Shares, Claims and Cancellation
Agreement”) with Pentafloor Proprietary Limited (“Pentafloor”) whereby Accentuate will dispose of its
entire 100% shareholding in Pentafloor to the original Pentafloor vendors.

Finalisation of the transaction is subject to the fulfilment of conditions precedent set out below.

THE PURCHASERS:

Bianca and Larry Shakinovsky, (“the Purchasers”) will jointly purchase the entire issued share capital
in Pentafloor.

RATIONALE FOR THE TRANSACTION:

In August 2017 Accentuate entered into a sale agreement (“2017 Sale Agreement”) with the
Purchasers in terms of which the Purchasers sold their entire shareholding in Pentafloor to
Accentuate. Pursuant to the 2017 Sale Agreement 5 317 431 Accentuate ordinary shares were issued
to the Purchasers as part payment of the purchase consideration (“the Accentuate Shares”). However
the transaction has not delivered on the expectations of the parties.

Accentuate will continue to focus on the core business during a challenging macro environment.

The cash component of the transaction will be used by the Company to settle the outstanding balance
on the term loan that was obtained to purchase part of the shares of Pentafloor.

Accentuate is required to obtain shareholder approval to buy back the Accentuate Shares from
Pentafloor within 180 days with effect from 28 February 2019 in terms of the Sale of Shares, Claims
and Cancellation Agreement (at no cost to Accentuate) as part payment of the purchase
consideration. Failing shareholder approval, Accentuate will be paid the market value of such shares.
A circular detailing the specific repurchase will be issued to Accentuate shareholders in due course.

Accentuate will have no beneficial interest in the 5 317 431 ordinary shares (Accentuate Shares) until
shareholder approval has been obtained for the repurchase.

EFFECTIVE DATE AND CONDITION PRECEDENT:

The Accentuate Board in the form of a resolution approved the sale of shares and cession of the
sales claim in Pentafloor to the Purchasers.

The transaction will become effective once the condition precedent outlined below has been met.
The Purchasers will have transferred the R13 081 177.02 into the trust account of Stein Scop
Attorneys Inc. in order to transfer the required funds to Accentuate by no later than 28 February 2019,
the implementation date.

PURCHASE CONSIDERATION:

The purchase consideration payable by the Purchasers to Accentuate is R13 081 177.02 plus the
value of the Accentuate Shares, alternatively, subject to shareholder approval, the delivery of the
Accentuate Shares. Ownership of the Accentuate Shares will only transfer to Accentuate if and after
shareholder approval has been obtained.

The cash component of the transaction will be used by the Company to settle the outstanding balance
on the term loan that was obtained to purchase part of the shares of Pentafloor (Pty) Ltd.

NET ASSETS & ATTRIBUTABLE PROFITS:

The combined Net Asset Value (“NAV”) of the Company was R6 283 870 as at the audited last year-
end being 30 June 2018.

The audited profits attributable to the net assets for the year ended 30 June 2018 on an IFRS basis is
R1 189 444.

The impact of the repurchase if approved by shareholders is that the shares are returned from the
original vendor and subsequently cancelled or held as treasury shares.

CATEGORISATION OF THE TRANSACTION:

For purposes of categorisation, the transaction is deemed a category 2 transaction, however
shareholder approval is required for the specific repurchase from the Purchasers.



Johannesburg
21 February 2019
Designated Adviser: Bridge Capital Advisors Proprietary Limited

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