BASIL READ HOLDINGS LIMITED Basil Read Holdings Limited
(Incorporated in the Republic of South Africa) (Registration Number 1984/007758/06) Share Code: BSR ISIN: ZAE 000029781
('Basil Read' or 'the Company')
DISPOSAL OF BASIL READ ENERGY (PTY) LIMITED AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are referred to the cautionary announcements released on SENS on 11 December 2014, 28 January 2015, 27 March 2015, 14 May 2015, 26 June 2015, 7 August 2015 and 17 September 2015 and are advised that Basil Read Limited (a wholly owned subsidiary of Basil Read), and Basil Read Energy (Pty) Ltd ('BRE') have entered into a sale of shares and claims agreement (the 'Sale Agreement') with TEWA Power (Pty) Ltd ('TEWA Power' previously known as Afri-Coast Engineers (SA) (Pty) Ltd) and African Pioneer Energy (Pty) Ltd ('APE') (TEWA Power and APE are herein referred to as 'the Purchasers') in terms of which the Purchasers have acquired all of the issued share capital of BRE from Basil Read Limited for a total purchase consideration of R70 million (the 'Transaction').
RATIONALE FOR THE SALE AGREEMENT AND USE OF PROCEEDS
Basil Read announced to shareholders on 27 August 2014 that it had developed an 18- month turnaround strategy which involved the critical evaluation of the various businesses and assets in the group into core and non-core categories. As part of this process, BRE was determined to be non-core and was earmarked for disposal.
The net proceeds from the Transaction will be applied towards the reduction of debt and capital management initiatives.
BACKGROUND TO THE PURCHASERS The Purchasers are:
APE - African Pioneer Energy (Pty) Ltd (registration number 2011/148709/07), a private company duly incorporated and registered in accordance with the laws applicable in South Africa; and
TEWA Power - TEWA Power (Pty) Ltd (registration number 2001/013432/07), a private company duly incorporated and registered in accordance with the laws applicable in South Africa.
BACKGROUND TO BRE
BRE currently owns operating and developmental assets in the renewable energy sector. The projects in which BRE is the registered and beneficial owner include-
25% of the issued share capital of 3 Energy Renewables (Pty) Ltd (registration number 2011/102847), being a facilities management company providing management, technology diagnostic and technical services to renewable energy power plants;
23% of the issued share capital of Rubicept (Pty) Ltd (RF) (registration number 2011/123905/07), being the 27 megawatt Van Stadens Wind Farm in the Eastern Cape and has been in commercial operation since Feb 2014;
75% of the issued share capital of Rooikat Hydropower (Pty) Ltd (registration number 2013/169682), being a development company for the 22 megawatt run of river hydro project; and
52% of the issued share capital of Meerkat Hydropower (Pty) Ltd (registration number 2013/169671/07), being a development company for the 18 megawatt run of river hydro project.
KEY TERMS OF THE TRANSACTION
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Sale Agreement
In terms of the Sale Agreement, the Purchasers acquired the entire issued share capital of BRE (the 'Sale Shares') as well as all claims which Basil Read has against BRE on the effective date of the Transaction (the 'Sale Claims'), being 25 September 2015.
The Purchasers acquired the Sale Shares for an amount of R1 000 and the Sale Claims for an amount of R69 999 000 which equates to a total purchase price of R70 million payable in cash on a pro rata basis as follows:
In respect of Sale Shares:
75% by APE, and
25% by TEWA Power
In respect of Sale Claims:
75% by APE, and
25% by TEWA Power
The purchase price was paid by the Purchasers on the effective date of the transaction out of immediately available cash.
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Other terms
APE has irrevocably and unconditionally agreed to grant Spilled Water Renewable Energy (Pty) Ltd (registration number 2009/009153/07), an option to acquire 50% of the Sale Claims and 50% of the Sale Shares for a purchase consideration of R35 000 000 payable in cash, which option shall be capable of being exercised at any time within 40 business days from the effective date of the Transaction, after which stage such option shall lapse and have no further force or effect.
Limited guarantees, indemnities and warranties were provided by Basil Read which are normal for a transaction of this nature.
- Effective date of the Transaction
PROFIT AND NET ASSET VALUE ATTRIBUTABLE TO BRE
The value of the net assets of BRE as per the most recently published unaudited results of Basil Read, for the six months ended 30 June 2015 is R42.6 million. The losses attributable to the net assets of BRE for the six months ended 30 June 2015 is R2.1 million.
CATEGORISATION OF THE TRANSACTION
The Transaction constitutes a category 2 disposal for Basil Read under the provisions of section 9 of the Listings Requirements of the JSE Limited.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
The effective date of the Transaction was 25 September 2015. There are no outstanding conditions precedent to the Transaction.
Shareholders are further advised that discussions for the potential disposal of Spraypave (Pty) Ltd are still ongoing and if successfully concluded may have a material effect on the price of the Company's securities.
Accordingly, shareholders are advised to continue to exercise caution when dealing in the Company's securities until a full announcement is made.
Johannesburg
29 September 2015
A.T. Ndoni Company Secretary
Sponsor
Grindrod Bank Limited
Corporate Advisor to Basil Read St John Capital
Legal Advisor to Basil Read Werksmans Attorneys
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