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BELL EQUIPMENT LIMITED - Small Related Party Transaction Update, Withdrawal of Cautionary and Change To BEL Remuneration Committee

Release Date: 01/02/2019 15:00
Code(s): BEL     PDF:  
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Small Related Party Transaction Update, Withdrawal of Cautionary and Change To BEL Remuneration Committee

Bell Equipment Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1968/013656/06
Share code: BEL
ISIN: ZAE000028304
(“BEL” or “the Company”)

SMALL RELATED PARTY TRANSACTION UPDATE, WITHDRAWAL OF
CAUTIONARY AND CHANGE TO BEL REMUNERATION COMMITTEE


1. THE TRANSACTION

Shareholders are referred to the cautionary announcement released on SENS on 7 January
2019 whereby shareholders were advised that Bell Equipment Company SA (Pty) Ltd
(“BECSA”) Registration Number: 1966/004606/07, a wholly owned subsidiary of BEL, had
reached agreement in principle to acquire the business (purchase of assets and take-on of
employees) of Matriarch Equipment CC (“Matriarch”) Registration Number: 2009/128755/23,
as a going concern (“the Transaction”).


2. FINANCIAL INFORMATION

The value of the tangible assets that are the subject of the Transaction, including the inventory
referred to in Clause 4 below, is R15,8 million. BECSA will also acquire all Intellectual Property
(“IP”) of Matriarch. The value of the IP has been determined by valuing the Matriarch business
on a discounted cashflow basis. In order to reduce the inherent risks surrounding forecasts
used in the discounted cashflow valuation the value of the IP and therefore the consideration
payable in respect of the IP has been structured to include an initial upfront payment of R3,8
million and a Performance Based Consideration (“PBC”) linked to actual future sales of
Matriarch equipment. The PBC will be payable quarterly in arrears for a period of 5 years from
the effective date and is capped at R15 million.


The profit before tax attributable to the underlying business of Matriarch as recorded in their
unaudited management accounts for the ten months ending 31 December 2018 is R447 000.

3. FAIRNESS OPINION


BEL has provided the JSE with written confirmation from Deloitte & Touche as Independent
Expert acceptable to the JSE that the terms of the small related party transaction are fair as far
as the shareholders of BEL are concerned (the “Fairness Opinion”). This Fairness Opinion is
available for inspection at the registered offices of BEL for 28 days from the date of this
announcement.

4. WITHDRAWAL OF CAUTIONARY

As the inventory value, being R14,5 million, has now been established which was the only
remaining element of the purchase consideration that was outstanding for the finalisation of
the Fairness Opinion, shareholders are advised that the cautionary is withdrawn.
5. BEL BOARD AND REMUNERATION COMMITTEE CHANGES

In terms of section 3.59(c) of the Listings Requirements of the JSE, shareholders are advised that
with immediate effect, Ashley Bell’s position on the BEL board will change from non-executive to
executive director. Consequently, Ashley Bell will be replaced on the Remuneration Committee
by Gary Bell, the non-executive chairman of the board, to ensure that there are 3 non-executive
directors on such a committee.

Following the BEL board change, the composition of the BEL board remains compliant with the
King IV requirement that a board of directors should comprise a balance of power, with a
majority of non-executive directors, the majority of whom should be independent.




Richards Bay
1 February 2019

Sponsor and corporate advisor:
Investec Bank Limited


Independent Expert:
Deloitte & Touche

Date: 01/02/2019 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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