Camellia PLC
13 March 2001
Camellia Plc and its subsidiary Linton Park Plc announce
On 13th March 2001, a wholly owned subsidiary of Linton Park Plc ('Linton')
entered into a conditional agreement with The Industrial Development
Corporation of South Africa Ltd ('IDC') whereby Linton will acquire a
controlling interest in Sapekoe (Proprietary) Ltd. ('Sapekoe') in exchange for
a minority interest in Eastern Produce Malawi Ltd. ('EPM').
EPM is the largest tea producer in Malawi and is in addition a major grower
and processor of macadamia nuts and coffee. Sapekoe is the largest tea
producer in South Africa. In addition it owns significant macadamia nut
estates, mills paprika and extracts oleoresin, a colorant oil extracted from
paprika.
On completion, the IDC interest in Sapekoe and EPM will be 26.8% but this will
increase to 30% once certain legal formalities have been completed. Sapekoe is
a wholly owned subsidiary of IDC whilst EPM is a wholly owned subsidiary of
Linton.
The 70% interest in Sapekoe to be acquired by Linton comprises 70% of the
share capital of Sapekoe and 70% of a subordinated loan from IDC to Sapekoe.
In accordance with the above paragraph, the initial interest in the equity and
loan will be 73.2%. Completion of the transaction will take place on 30th
April 2001 subject to clearances having been received from certain regulatory
authorities, which will include the exchange control authorities in South
Africa and Malawi and the Competition Commission in South Africa. The minimum
local currency book values of the assets of Sapekoe and EPM at completion are
warranted in relation to the assets at the date of the latest audited accounts
(30th June 2000) for Sapekoe and the EPM management accounts at 31st December
2000 for EPM.
The consideration for the 70% interest in Sapekoe is a 30% interest in EPM
with no cash element. The net assets attributable to 30% of EPM on 31st
December 1999 were £6,703,000. The net assets attributable to 70% of Sapekoe
on 30th June 2000 were £9,214,000.
In the year ended 31st December 1999 the profit before tax attributable to the
30% interest in EPM was £516,000. During the year ended 30th June 1999 Sapekoe
underwent major restructuring and as a consequence a substantial loss was
incurred. The loss before tax attributable to 70% of Sapekoe was £2,071,000 in
the year ended 30th June 2000.
Linton already has experience of growing, processing and marketing tea in
Kenya and Malawi and macadamia nuts in Malawi. It already owns other
agricultural and horticultural interests in South Africa and the board of
Linton believe there will be benefits in managing their geographically diverse
businesses in Africa by pooling expertise to reduce costs, to improve the
quality of produce grown as well as to sell and market produce more
effectively.
Press enquiries:
Malcolm Perkins, Chairman - Linton Park Plc
01622 746655
P.E. Hill
Company Secretary
13th March 2001
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