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Disposal of properties
Stefanutti Stocks Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/003767/06)
Share code: SSK ISIN: ZAE000123766
(“Stefanutti Stocks” or “the Group”)
DISPOSAL OF PROPERTIES (“the Transaction”)
1. INTRODUCTION
Shareholders are advised in terms of Section 9 of the JSE Limited Listings Requirements, that Stefanutti Stocks
Proprietary Limited (“the Seller”) has entered into an agreement (“the Agreement”) dated 19 October 2020 with Clayville
Nutritionals Proprietary Limited (“the Purchaser”) to dispose of 4 properties being Erf 447 Clayville Ext 4; Erf 955
Clayville Ext 4; Portion 1 of Erf 955 Clayville Ext 4 and Portion 1 of Erf 1621 Clayville Ext 4 known as 6 and 10 Industry
Road Clayville Ext 4 (“the Clayville Properties”).
2. THE PURCHASER
The Clayville Properties will be purchased by Clayville Nutritionals Proprietary Limited, registration number
2019/082860/07 (“Clayville Nutritionals”) for a purchase consideration of R30 million (Thirty Million Rand) excluding
Value Added Tax (“VAT”), that is R34.5 million (Thirty four million and five hundred thousand Rand) with VAT (“the
Purchase Consideration”), subject to the fulfilment of conditions typical to a transaction of this nature, including receiving
the approval of the requisite majority of the shareholders of Stefanutti Stocks.
3. BACKGROUND AND RATIONALE FOR THE TRANSACTION
As previously disclosed to shareholders, a strategic restructuring team has been appointed, including the appointment
of a Chief Restructuring Officer, to advise on and assist with the development and implementation of a detailed
turnaround programme for the group, including the securing of requisite additional short-term funding from the
company's primary banker and guarantee providers ("Lenders") and the subsequent restructuring of all such short-term
funding into appropriate longer-term funding (the "Restructuring Plan"). The Restructuring Plan envisages inter alia (i)
the sale of non-core assets; (ii) the sale of underutilised plant & equipment; (iii) the sale of certain divisions/subsidiaries;
(iv) internal restructuring initiatives required to restore optimal operational and financial performance; (v) the securing
of additional short-term funding of R430 million, of which R270 million relates to the negative effects of the national
lockdown due to the COVID-19; (vi) a favourable outcome from the processes, relating to the contractual claims and
compensation events on the Kusile power project; (vii) the restructuring of the short-term funding received to date from
the Lenders into a term loan; and (viii) evaluation of an optimum business model and associated capital structure
analysis including the potential of raising new equity.
The purpose of the Restructuring Plan is to put in place the optimal capital structure and access to liquidity to position
the group for long-term growth in this dynamic environment and to this end and in accordance with the Restructuring
Plan, the Clayville Properties, which have been owned by the Stefanutti Stocks group since 24 December 2008, will be
disposed of pursuant to the Transaction.
4. CONDITIONS PRECEDENT
The suspensive conditions to the Agreement are as follows:
• 5% (Five per centum) of the Purchase Consideration is payable immediately;
• The balance of the Purchase Consideration including VAT is to be paid in cash, guaranteed by a written and
unconditional irrevocable guarantee from a registered South African financial institution (“the Guarantee”);
• The Guarantee shall be presented within 60 days from the date of acceptance;
• Regulatory approvals as required for the Transaction, including Stefanutti Stocks’ shareholder approval; and
• Transfer shall not be passed to the Purchaser until such time that the balance of the Purchase Consideration
has been settled to the satisfaction of Stefanutti Stocks.
5. EFFECTIVE DATE
The Effective date will be the date on which the conditions precedent to the Transaction have been fulfilled and the
Transaction becomes unconditional.
6. NET ASSETS & ATTRIBUTABLE PROFITS
As set out in the Annual Financial Statements of the Group for the year ended 29 February 2020, based on most recent
valuations, the Clayville Properties are valued at R42.7m (including a Revaluation Reserve of R25.8m). The Transaction
will result in an accounting loss of R14.6m after incurring costs to sell the Clayville Properties of R2 million plus VAT at
15% (Fifteen per centum).
7. CONSIDERATION
Clayville Nutritionals will pay Stefanutti Stocks 5% (Five per centum) of the Purchase Consideration immediately. The
balance of the Purchase Consideration including VAT is to be paid in cash by a written and unconditional irrevocable
guarantee from a registered South African financial institution.
8. APPLICATION OF PROCEEDS
Stefanutti Stocks will use the proceeds of the disposal to acquire another more suitable property and to fund Group
working capital requirements.
9. THE DISPOSAL OF THE CLAYVILLE PROPERTIES
Securities did not form part of the Purchase Consideration received.
10. CATEGORISATION OF THE TRANSACTION
For purposes of categorisation, the Transaction constitutes a Category 1 transaction in terms of the Listings
Requirements of the JSE Limited and accordingly requires shareholder approval.
11. DISTRIBUTION OF CIRCULAR
A circular containing the full details of the Transaction, incorporating a notice convening a shareholders meeting, will be
distributed to shareholders in due course. The salient dates and times of the Transaction, including the date of the
shareholders meeting, will also be announced on the Stock Exchange News Service at the time of distributing the
circular.
Johannesburg
21 October 2020
Sponsor: Bridge Capital Advisors Proprietary Limited
Legal Advisor: Webber Wentzel
Date: 21-10-2020 02:42:00
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