Chandler Coal Proprietary Limited (Chandler) entered into a Sale of Business Agreement (Business Agreement) with MacPhail Distributors (Pty) Ltd (MacPhail) for a coal trading business.
Chandler is a wholly owned subsidiary of Wescoal.
The agreement was entered on the 8 August to acquire the business as a going concern, with effect from 1 October 2013, or the first business day following the date of fulfilment of the last of the suspensive conditions, whichever date occurs last (effective date).
Shareholders are referred to the SENS announcements dated 21 June and 13 June 2013 where shareholders were advised that Chandler had made an offer to acquire a coal trading business from a third party (the Third Party), MacPhail subject to certain suspensive conditions.
The terms and conditions of the MacPhail acquisition are:
– The total purchase price for the MacPhail acquisition is R 65.5m exclusive of VAT at a rate of zero per cent, consisting of fixed assets, stock, contracts, intellectual property, leases and goodwill, subject to inventory adjustment on the effective date.
– The MacPhail acquisition is subject to inter alia the following outstanding suspensive conditions:
* the seller obtaining a special resolution from shareholders approving the disposal;
* the lodgement of the application to the Competition Authorities;
* Chandler and Blanford 006 (Pty) Ltd (Blanford), a wholly owned subsidiary of Chandler, being able to secure funding for the acquisitions;
* approval of the acquisitions by Wescoal shareholders;
* all the necessary regulatory approvals, including JSE Limited (JSE) and Competition Commission approvals for the acquisition.
– The purchase price for the MacPhail acquisition will be paid on the effective date out of current cash resources and bank funding.
– The purchase price is subject to possible adjustment, depending on the outcome of a stock take the day before the effective date.
– The MacPhail acquisition is subject to warranties that are customary in transactions of this nature.
– The seller and certain third parties will be subject to a restraint of trade.
Also on 8 August Blanford signed a Sale of Property Agreement (Property Agreement) with FSW Property Trust to purchase:
– Erf 635 Wells Estate, Nelson Mandela Metropolitan Municipality, Division of Port Elizabeth, Province Eastern Cape;
– Erf 13936 Worcester, situate in the Breede Vallei Municipality, Division of Worcester, Province Western Cape;
– Erf 16069 Worcester, situate in the Breede Vallei Municipality, Division of Worcester, Province Western Cape; and
– Erf 7556 George, situate in the George Municipality, Division of George, Province Western Cape (the properties) as a going concern (the properties acquisition).
The MacPhail acquisition and the properties acquisition are collectively referred to herein as the acquisitions.
Terms and conditions of the Properties Acquisition:
– The total purchase consideration for the properties is R13.5m exclusive of VAT at a rate of zero per cent.
– The properties acquisition is subject to inter alia the following outstanding suspensive condition, namely that all the suspensive conditions included in the Business Agreement are fulfilled or waived.
– The purchase price is payable in cash on the transfer date and will be funded by bank funding.