PEPKOR HOLDINGS LIMITED - Voluntary Announcement Relating To The Disposal Of The Building Company Proprietary Limited

Voluntary Announcement Relating To The Disposal Of The Building Company Proprietary Limited

PEPKOR HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2017/221869/06)
Share code: PPH
Debt code: PPHI
ISIN: ZAE000259479
(“Pepkor” or “the Company” or “the Group”)

VOLUNTARY ANNOUNCEMENT RELATING TO THE DISPOSAL OF THE BUILDING COMPANY
PROPRIETARY LIMITED (“TBC”)

1. INTRODUCTION
    Pepkor shareholders are hereby advised that the Company has entered into a sale and purchase
    agreement with Cashbuild Limited (“Cashbuild”), for the disposal of the entire issued share capital of
    Pepkor’s wholly owned subsidiary, TBC, subject to the conditions precedent set out in paragraph 3.2
    below (“the Proposed Transaction”). Shareholders are referred to the earlier announcement made
    today by Cashbuild.

2. RATIONALE
    The Proposed Transaction will enable Pepkor to streamline its portfolio of businesses and focus on its
    core business of discount and value retail.
    Following a prolonged period of corporate activity that included various acquisitions, TBC has done well
    to restructure and consolidate the business. It has made significant progress in defining its value
    proposition, establishing a strong corporate culture, clarifying strategy and prioritising a central
    procurement strategy.
    With an attractive portfolio of established and well-known brands, the Proposed Transaction will ensure
    that, as part of Cashbuild, TBC will be strategically better placed for future growth.
    It is envisaged that Pepkor will use the net disposal proceeds to further reduce debt in line with the
    Group’s ambition to reduce its gearing levels to enhance the flexibility of its capital structure.

3. TERMS OF THE PROPOSED TRANSACTION
    3.1 Purchase price
        The total consideration payable by Cashbuild on closing of the Proposed Transaction will be
        R1,074,700,000 (the “Purchase Consideration”) subject to:

        - an escalation rate of 5.5% per annum from 1 January 2021 until the Proposed Transaction
          closing date; and
        - the sum of the Purchase Consideration and the total escalation not exceeding
          R1,119,700,000.

    3.2 Conditions precedent
        The implementation of the Proposed Transaction is, subject to the fulfillment of, inter alia, the
        following principal conditions precedent:

        -   Regulatory approvals, including Competition Authorities, being obtained; and
        -   Cashbuild’s debt financing agreements being duly executed and becoming unconditional.

4. CATEGORISATION OF THE PROPOSED TRANSACTION
    The Proposed Transaction is uncategorised in terms of the JSE Limited Listings Requirements and this
    announcement has been voluntarily disclosed by the Company.

Parow
4 August 2020

Equity Sponsor
PSG Capital

Debt Sponsor and Financial advisor to Pepkor
Rand Merchant Bank
(A division of FirstRand Bank Limited)

Legal advisor to Pepkor
Werkmans

Date: 04-08-2020 09:05:00
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