29 Sep 2008 07:00
AECI LIMITEDIncorporated in the Republic of South Africa(Registration No. 1924/002590/06)Share code: AFE ISIN No. ZAE000000220
("AECI")
TERMINATION OF NEGOTIATIONS FOR THE SALE OF SANS FIBRES' NYLON BUSINESS
Shareholders are referred to the SENS announcement published on 7 April 2008 indicating that AECI had reached agreement, in principle, to sell the nylon light decitex (LDI) business of SANS Fibres (Proprietary) Limited ("SANS") to a consortium ("the Consortium") comprising mainly the management of SANS, the Industrial Development Corporation ("IDC") and a SANS workers' trust. The sale offer was for the entire fibres business situated at Bellville in the Western Cape and at Stoneville, North Carolina, USA.
As indicated most recently in AECI's interim results for the half-year ended 30 June 2008, released on SENS on 29 July 2008, it was expected that the sale would be concluded by the end of September 2008.
Since this last announcement, there have been a number of major adverse developments in the nylon market that have impacted negatively on the value and prospects of the SANS business. Such developments include increases in raw material and other input costs, customers' resistance to higher product prices required to offset these increases, and labour unrest at Bellville.
After much discussion between AECI and the Consortium, the parties have agreed that under the present circumstances the envisaged transaction is no longer feasible.
With mutual regret, therefore, the parties have agreed to terminate any further discussions regarding the sale of the business.
AECI will, by year-end, re-evaluate all options for the business and will make a final decision on exiting the nylon LDI business at that time.
A due diligence process for the sale of SANS's polyethylene terephthalate (PET) business, also at Bellville, is continuing with the identified potential purchasers and it is still expected that finality on exiting this business will be achieved by the end of 2008.
Woodmead, Sandton29 September 2008Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
vendor