Last checked at 7 Apr 2008 11:00
AECI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number. 1924/002590/06)
Share code: AFE ISIN No. ZAE000000220
("AECI" or "the Company")
PRESS RELEASE: SALE OF SANS FIBRES NYLON BUSINESS
As indicated in the annual results announcement for the year ended 31 December 2007 as released on SENS on 26 February 2008, AECI intends disposing of its interest in SANS Fibres (Pty) Limited ("SANS"). The fibres business is not aligned with the Company's long-term strategy of growing as a supplier of specialty products and services to the mining and manufacturing industries.
AECI is pleased to announce that it has reached agreement, in principle, to sell the nylon light decitex (LDI) business of SANS to a consortium comprising mainly the management of SANS, the Industrial Development Corporation of South Africa ("IDC"), and a SANS workers' trust ("the sale"). The sale offer is for the entire fibres business situated at Bellville in the Western Cape and at Stoneville, North Carolina, USA.
The purchase will be largely financed by the IDC, which will provide debt and equity finance. The IDC will hold a 15% direct shareholding in the Company.
Importantly, in excess of 25% of the Company's equity will be beneficially owned by BEE shareholders. Therefore, it will have empowered status in terms of the Department of Trade and Industry's Codes of Practice on Broad-Based Black Economic Empowerment.
The sale is subject to a number of conditions precedent including detailed due diligence, the conclusion of acceptable binding funding agreements with the IDC, Board approvals, relevant regulatory approvals, the conclusion of a sale agreement and the ability to satisfactorily separate the LDI business from the other business at Bellville.
Because of management's involvement, it is likely that the sale will be deemed a "small related party transaction" in terms of the JSE Listings Requirements and is subject to a fair opinion from an independent expert. Shareholders will be advised on SENS and in the press of the full terms of the sale and the independent opinion in due course. The conclusion of the sale is not expected to have a significant effect on the financial results of the Company.
Woodmead7 April 2008Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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