ACE
ACE
ACE - Accentuate Limited - Disposal by Accentuate of the operational assets
and liabilities of CGA Fenestrations (Pty) Limited
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 BY ACCENTUATE OF THE OPERATIONAL ASSETS AND LIABILITIES OF CGA
FENESTRATIONS (PTY) LIMITED ("CGA" OR "THE DISPOSAL")
This announcement replaces the announcement that was released on SENS on 14
December 2011 with regard to the disposal of CGA as there are additional
disclosures that have been included in the announcement.
1. INTRODUCTION
The directors of Accentuate are pleased to announce that Accentuate has
entered into an agreement with Wys Investments (Pty) Limited ("the
Purchaser") to dispose of the operational assets and liabilities of CGA
for an amount of R 9,557 million (Nine million, five hundred and fifty
seven thousand rand) ("the Disposal Price").
2. CGA - BRIEF COMPANY PROFILE
CGA is a company specialising in the design and erection of glass and
aluminium solutions since 1993. CGA operates in the construction sector,
currently a manufacturer and installer for the commercial, retail and
top-end residential markets of glass facades, shop fronts, windows,
doors and aluminium composite panel cladding.
3. WYS INVESTMENTS (PTY) LTD - BRIEF COMPANY PROFILE
Wys Investments (Pty) Ltd is a special purpose vehicle being utilised
for the purposes of this transaction, previously a dormant company. In
terms of the transaction agreement, the Purchaser has confirmed to
Accentuate that the Purchaser is not a related party in terms of the JSE
Listings Requirements.
4. SALIENT FEATURES OF THE DISPOSAL
In line with the earlier announcements in this regard, Accentuate is
disposing of the operational assets and liabilities of CGA. The claims
that Accentuate has against the previous vendors of CGA are on-going and
will remain due to Accentuate until such time that they are resolved.
5. RATIONALE OF THE DISPOSAL
The under-performance of this company has been an area of concern for
Accentuate for some time and notwithstanding serious remedial action,
this division has remained a drain on the resources of the group. In
addition, the macro-economic factors impacting on CGA have deteriorated
over a number of years and management does not foresee a dramatic change
in these macro-economic conditions in the short to medium term. This
coupled with the fact that CGA has taken up a disproportionate amount of
Accentuate management time and resources, has led to the disposal of CGA
as a going concern. The net effect of this transaction is that
Accentuate can focus its time and resources on the core cash generative
assets that have performed consistently since listing. The relationships
that Accentuate has developed since its establishment in 1953, provide a
platform for both organic and acquisitive growth within its areas of
expertise and competency.
6. EFFECTIVE DATE OF THE DISPOSAL
The effective date of the disposal is 1 September 2011.
7. CONDITIONS PRECEDENT
The Disposal is subject to the following conditions precedent:
* The Purchaser pays a sum of R 4 million on or before 15
December 2011 ("closing date");
* Approval by the Board of Directors of Accentuate; and
* Granting of all regulatory approvals as may be required.
8. TERMS OF ARRANGEMENT
The balance of the Disposal Price will be settled as follows:
* R1 500 000.00 (one million five hundred thousand rand) 12
months after closing date;
* R2 000 000.00 (two million rand) 24 months after closing date;
and
* R2 057 000.00 (two million and fifty seven thousand rand) 36
months after closing date.
Accentuate has received an irrevocable undertaking from the Purchaser to
settle the outstanding Disposal Price within the dates stated above.
There are no other significant terms of the agreement between Wys Investments
(Pty) Ltd and Accentuate Limited.
9. CATEGORISATION OF THE DISPOSAL
The Disposal is a category 2 transaction in terms of the JSE Listings
Requirements.
10. FINANCIAL EFFECTS OF THE DISPOSAL
The unaudited pro forma financial effects of Accentuate before and after
the disposal are based on the audited results of Accentuate for the year
ended 30 June 2011. The unaudited financial effects are presented for
illustrative purposes only, to provide information on the impact of the
disposal may have impacted on the results and financial position of
Accentuate. The unaudited pro forma financial effects are the
responsibility of Accentuate`s directors. Due to the nature of the
unaudited pro forma financial effects, they may not fairly present
Accentuate`s financial position and the results of its operations after
the disposal. It has been assumed for the purpose of the calculation of
headline earnings per share and earnings per share that the disposal
took place with effect from 1 July 2010, and for the calculation of net
asset value ("NAV") and tangible net asset value ("TNAV"), the disposal
took effect from 30 June 2011. The financial effects do not purport to
be indicative of what the financial results would have been, had the
disposal been implemented on a different date. The unaudited pro forma
financial information has been presented in a manner consistent in all
respects with IFRS as well as Accentuate`s accounting policies which
have been applied consistently throughout the period.
The financial effects of the disposal are set out below:
Before After the %
the disposal chang
disposal e
Amount Amount
Basic earnings per share (EPS) (71.58) (59.14) 17.4
(cents)
Diluted earnings per share (71.58) (59.14) 17.4
(EPS) (cents)
Headline earnings per share (3.72) 8.72 334.4
(HEPS) (cents)
Diluted headline earnings per (3.72) 8.72 334.4
share (HEPS) (cents)
Net asset value per share 105 105 0.0
(NAV) (cents)
Tangible net asset value 73 73 0.0
(TNAV) (cents)
Shares in issue 111 108 111 108 0.0
119 119
Weighted average number of 104 231 104 231 0.0
shares in issue 138 138
Notes:
1. The "Before the disposal Amount" and "After disposal Amount" basic
earnings per share include the impairments of R70.8 million
disclosed in the June 2011 annual report. Such impairments equates
to a loss of 68 cents per share.
2. The EPS, HEPS, Diluted EPS and Diluted HEPS in the "Before" column
of the table are based on the audited statement of comprehensive
income of Accentuate for the year ended 30 June 2011 and
104,231,138 Accentuate ordinary shares in issue (being the weighted
diluted number of ordinary shares in issue for the year ended 30
June 2011)
3. The EPS, HEPS, Diluted EPS and Diluted HEPS in the "After" column
of the table are based on 104,231,138 Accentuate ordinary shares in
issue and the assumptions that:
- the Disposal became effective on 1 July 2010 and the purchase
price was settled on that date;
- the Disposal Price was settled in cash; and
- the cash was invested on the Money Market at an after tax rate
of 4.3%, yielding an annual after tax interest of R 412,862.
4. The NAV per share and TNAV per share in the "Before" column of the
table are based on the audited statement of financial position of
Accentuate at 30 June 2011 with 111,108,119 Accentuate ordinary
shares in issue.
5. The NAV per share and TNAV per share in the "After" column of the
table are based on the assumptions that the disposal was completed
on 30 June 2011 with 111,108,119 Accentuate ordinary shares in
issue.
6. The pro forma financial effects have not been reviewed by
Accentuate`s auditors.
11. FINALISATION ANNOUNCEMENT
As per the announcement published on SENS on 15 December 2011,
shareholders were advised that the transaction became unconditional on
15 December 2011.
Johannesburg
10 January 2012
Designated Advisor and Corporate Advisor: Bridge Capital Advisors (Pty)
Limited
Date: 10/01/2012 17:30:01 Produced by the JSE SENS Department.
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