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W G WEARNE LIMITED - Disposal of Muldersdrift Quarry and withdrawal of cautionary announcement

Release Date: 30/01/2019 09:12
Code(s): WEA     PDF:  
 
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Disposal of Muldersdrift Quarry and withdrawal of cautionary announcement

W G WEARNE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005983/06)
(Share Code: WEA ISIN Code: ZAE000078002)
(“Wearne” or “the Company” or “the Group’’)

DISPOSAL OF MULDERSDRIFT QUARRY AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT

1.     INTRODUCTION

1.1.   With reference to the cautionary announcement dated 21 January 2019, shareholders
       are informed that Wearne has, on 29 January 2019, entered into term sheet with
       Furness Investments (Pty) Limited (“Furness Investments”) and AGW Trading (Pty)
       Limited (“AGW”) (collectively “the Purchasers”) to dispose of the property and certain
       assets of the Muldersdrift Quarry to the Purchasers, subject to certain conditions
       precedent referred to below (“The Transaction”).

1.2.   The Purchasers requested a period of exclusivity to complete a due diligence and
       negotiations and to sign the formal agreements.

2.     NATURE OF THE BUSINESS OF MULDERSDRIFT QUARRY

       The Muldersdrift Quarry is a granite quarry located in Muldersdrift near Krugersdorp
       that produces normal aggregates for the road and normal building industry. The
       Muldersdrift Quarry also produces building and river sand.


3.     RATIONALE FOR THE TRANSACTION
       As previously announced, Wearne has developed and is implementing a restructure
       plan to sell off non-core assets to improve its liquidity and solvency. The Muldersdrift
       Quarry has been identified as a non-core asset.


4.     SALIENT TERMS AND CONDITIONS OF THE TRANSACTION

4.1    Consideration
       The Purchasers offered to purchase the Muldersdift Quarry as follows:
        4.1.1   Furness Investments will purchase the Muldersdrift Quarry properties
                measuring 146 hectares in total for R 35.5 million payable on transfer of the
                properties;
        4.1.2   AGW will purchase the Muldersdrift Quarry assets, business and mining right
                for R 18 million, payable R 16 million on transfer of business and R 2 million
                on transfer of the mining right. AGW will also take over the rehabilitation
                liability of the Muldersdrift Quarry.
4.2   Conditions precedent
      The offer is subject to the following suspensive conditions:
       4.2.1   Execution of formal agreements between Wearne and the Purchasers;
       4.2.2   Finance being approved by a financial institution for the Purchasers to fund
               the acquisition of the Muldersdrift Quarry;
       4.2.3   Approval by the necessary regulatory authorities, including the JSE Limited
               and Competition Commission to the extent required; and
       4.2.4   Approval by the Board and the shareholders of Wearne.

5.    USE OF PROCEEDS
      The Transaction proceeds will be used for repayment of debt and to improve the
      liquidity position of the Group.

6.    FINANCIAL INFORMATION FOR THE TRANSACTION

      The net value of the assets attributable to the Transaction was approximately R 70
      million as at the year ended 28 February 2018. The loss attributable to the net assets
      that are the subject of the Transaction, was R 7 million for the year ended 28 February
      2018.

7.    CATEGORISATION OF THE TRANSACTION

      The Company is currently in discussions with the JSE regarding the categorisation of
      the Transaction, given the suspension of its shares. Once the categorisation of the
      Transaction has been determined, shareholders will be notified thereof.

8.    WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

      Shareholders are advised that caution is no longer required to be exercised by
      shareholders when dealing in the company’s securities.




Randfontein
30 January 2019


Designated adviser
Exchange Sponsors

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