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Announcement regarding Lease Agreements with a Related Party
HUDACO INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1985/004617/06)
Share code: HDC & ISIN: ZAE000003273
("Hudaco" or the "Company")
ANNOUNCEMENT REGARDING LEASE AGREEMENTS WITH A RELATED PARTY
1. INTRODUCTION
Shareholders are advised that Hudaco Trading (Pty) Limited ("Hudaco Trading"), an 85% held subsidiary
of Hudaco, has negotiated new lease agreements ("Lease Agreements") with Dufomo Investments
Proprietary Limited ("Dufomo") for a period of five years in terms of which:
1.1 Gear Pump Manufacturing ("GPM"), a division of Hudaco Trading, will continue to lease
premises located at 15 Moody Avenue, Epping 1, Cape Town (the "GPM Premises"); and
1.2 Joseph Grieveson, a division of Hudaco Trading, will continue to lease the premises located at
332 Aberdare Drive, Phoenix Industrial Park, Phoenix, Durban (the "Joseph Grieveson
Premises"),
collectively "the Premises" from Dufomo as set out in paragraph 3 below (the "Leases").
Mr GR Dunford, the chief executive officer of Hudaco, is an 82% shareholder of Dufomo, which owns
the Premises.
2. RATIONALE FOR THE LEASES
The rationale for the Leases is to provide continuity to the businesses mentioned in section 1 above,
which have been renting these respective premises from Dufomo for over 21 years. The buildings and
structures on these premises were purposely built to suit the requirements of the respective
businesses and the businesses had already occupied these premises before being acquired by Hudaco
during 2013.
3. DETAILS AND TERMS OF THE LEASES
In terms of the Lease Agreements, GPM and Joseph Grieveson will lease the Premises for a further
period of 5 years from the commencement date of 1 July 2025. The monthly basic rentals payable in
respect of the Premises, which includes an annual escalation of 7%, are set out in the table below.
These basic rentals are inclusive of net rental, operating costs and insurance but exclude assessment
rates and utilities.
Period GPM Premises Joseph Grieveson Premises
Basic monthly rental Basic monthly rental
(excluding VAT) (excluding VAT)
1 July 2025 to 30 June 2026 R236 875.52 R281 725.25
1 July 2026 to 30 June 2027 R253 465.81 R301 446.02
1 July 2027 to 30 June 2028 R271 198.78 R322 547.24
1 July 2028 to 30 June 2029 R290 182.70 R345 125.55
1 July 2029 to 30 June 2030 R310 495.49 R369 284.33
The premises of GPM, a manufacturer and assembler of cast iron hydraulic gear pumps, comprise
373m² of offices, inclusive of offices located in the factory and 2 469m² of factory and warehouse,
828m² of foundry and 161m² of ablutions space.
The premises of Joseph Grieveson, a manufacturer of ferrous and non-ferrous castings, comprise
offices, warehouse and foundry space, measuring 4 020m².
There are no outstanding conditions precedent relating to the Leases.
4. FINANCIAL INFORMATION
Hudaco incurs lease expenses of the amount set out in paragraph 3 above. The rental payable is
deductible for tax purposes. Except for a right of use asset to be determined in terms of IFRS 16, there
are no assets attributable to the Leases.
5. CATEGORISATION AND SMALL RELATED PARTY TRANSACTION
The entering into of the Leases is considered a "small related party transaction" in terms of section
10.7 of the JSE Listings Requirements as Hudaco will be transacting with a "related party", being
Dufomo and accordingly no shareholder approval is required provided that an independent expert has
confirmed that the terms of the Leases are fair insofar as Hudaco shareholders are concerned.
The board of directors of Hudaco has appointed Merchantec Capital (the "Independent Expert") to
provide an independent fairness opinion on the Leases (the "Fairness Opinion") in compliance with
paragraph 10.7(b) of the JSE Listings Requirements. The Independent Expert has considered the terms
and conditions of the Leases and is of the opinion that the Leases are fair insofar as Hudaco
shareholders are concerned. The Fairness Opinion is available for inspection at the registered office
of the Company, Building 9, Greenstone Hill Office Park, Emerald Boulevard, Greenstone Hill,
Edenvale, for a period of 28 days from the date of this announcement and may be obtained on request
from Hudaco's Company Secretary at natashad@acorim.co.za
Johannesburg
3 June 2025
Corporate advisor and Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Independent Expert
Merchantec Capital
Date: 03-06-2025 10:21:00
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