AEL: ALLIED ELECTRONICS CORPORATION LIMITED - Disposal by IST Holdings of certain immovable property to Little River Trading 264 Pty Ltd
Disposal by IST Holdings of certain immovable property to Little River Trading 264 Pty Ltd
Allied Electronics Corporation Limited
(Registration number 1947/024583/06)
(Incorporated in the Republic of South Africa)
Share code: AEL ISIN: ZAE000191342
Share code: AEN ISIN: ZAE000191359
("Altron" or "the Company")
DISPOSAL BY IST HOLDINGS PROPRIETARY LIMITED ("IST HOLDINGS") OF
CERTAIN IMMOVABLE PROPERTY TO LITTLE RIVER TRADING 264 PROPRIETARY
LIMITED OR ITS NOMINEE ("THE PURCHASER")
IST IMMOVABLE PROPERTY TRANSACTION
Shareholders are advised that IST Holdings, a wholly owned subsidiary of Power
Technologies Proprietary Limited ("Powertech") has entered into an agreement of sale ("the
Agreement") with the Purchaser, in terms whereby IST Holdings will dispose of, inter alia,
certain immovable property situated in Pretoria to the Purchaser on terms and conditions
more fully set out in the Agreement and as summarised below ("the Disposal").
The salient terms and conditions of the Disposal as set out in the Agreement are as follows:
- IST Holdings has agreed to dispose of its income earning letting business, including,
among others, certain immovable property held under title deeds ST81717/2013 and
SK6216/2013S, together with all improvements thereon, plus various fixed assets,
leases, deposits and guarantees, to the Purchaser, with effect from the effective date,
which shall be the date of registration of transfer of the immovable property into the
name of the Purchaser;
- standard warranties and indemnities associated with transactions of this nature will be
provided by IST Holdings;
- the Disposal will be subject to certain conditions precedent more fully set out in this
- estate agent´s commission will be payable by the Purchaser to Leverage Commercial
Real Estate on the date of registration of transfer; and
- any disputes between the parties will be resolved by arbitration in accordance with the
provisions of the rules of the Arbitration Foundation of Southern Africa or failing which
the provisions of the Arbitration Act No. 42 of 1965 as amended.
NATURE OF BUSINESS OF IST HOLDINGS
IST Holdings, which is a wholly owned subsidiary of Powertech, is a company which, inter
alia, is in the business of owning and letting certain immovable property within the Pretoria
At the date of signature of the Agreement, IST Holdings leased the immovable property
referred to in the Agreement and as recorded in this announcement, to Powertech´s System
Integrators ("PTSI") business in terms of a written lease agreement.
RATIONALE FOR THE DISPOSAL
Following strategic review sessions held at both Altron and Powertech during the past
12 months, the IST Holdings board has identified the letting business, including the
immovable property and various fixed assets referred to in this announcement as being non-
core assets and deemed it prudent to dispose of the same to the Purchaser.
EFFECTIVE DATE OF THE DISPOSAL
The Disposal by IST Holdings of its letting business including the immovable property
referred to in this announcement will become effective on the date of registration of transfer
of the aforesaid immovable property into the name of the Purchaser.
The purchase price for the business referred to in this announcement, payable by the
Purchaser to IST Holdings, shall be the sum of R107 million, exclusive of VAT thereon at the
zero percentage rate ("the Disposal Consideration").
In the event that the Disposal or any part thereof is ruled by the South African Revenue
Services ("SARS"), not to be a zero rated transaction in terms of Section 11 (1) (e) of the
Value Added Tax Act, No. 89 of 1991, as amended, the Purchaser shall be liable for and
shall pay the amount of VAT, together with interest thereon, at the rate which IST Holdings is
liable to SARS, within seven days of receipt of an appropriate tax invoice and following the
date of registration of transfer of the property into the name of the Purchaser.
NET ASSET VALUE OF AND PROFITS ATTRIBUTABLE TO IST HOLDINGS
The value of the assets to be disposed of as at 31 August 2015 (being the date of the most
recent published financial results of the Altron group) amounted to R102 million.
For the six months ended 31 August 2015, IST Holdings generated revenue of R4 million,
EBITDA of R2.7 million and profit after tax of R1 million. All of the income generated in IST
Holdings related to intergroup transactions with the PTSI business.
CONDITIONS PRECEDENT TO THE DISPOSAL
The Disposal is subject to the fulfilment or waiver, as the case may be, of, inter alia, the
following conditions precedent, namely:
- IST Holdings obtaining a waiver of its right of first refusal by Pilot Peridot 1 (Pty) Ltd
prior to the date of lodging of transfer; and
- the approval by IST Holdings´ shareholder, Powertech, in general meeting, of the
APPLICATION OF THE DISPOSAL CONSIDERATION
The Disposal Consideration proceeds and cash realised will be used to reduce the overall
Altron group debt.
CATEGORISATION OF THE DISPOSAL AND SHAREHOLDER APPROVAL
The Disposal is classified as a Category 2 transaction in terms of Section 9.15 of the JSE
Listings Requirements and accordingly will not require Altron shareholder approval.
By order of the board of the Company
20 April 2016
Investment Bank and Sponsor
Investec Bank Limited
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