Gold Brands has entered into the term sheet agreement with Laudian, which has Christopher van Zyl and Danie van Zyl as shareholders.
“Notwithstanding the terms included in this announcement and further to the cautionary announcement released on June 29, shareholders are advised that the formal process to evaluate the disposal of a subsidiary of Gold Brands is ongoing which, if successfully concluded, may have a material effect on the price of the company’s securities,” the group said.
However, the disposal is still subject to certain conditions, which include the execution of a comprehensive sale of business agreement by Black Steer and Laudian and their duly authorised representatives and the agreement must be signed by no later than July 18.
Black Steer and Laudian must also obtain the requisite board and shareholder approvals for the proposed transactions by no later than July 18.
Laudian will pay an initial amount of R750000 up front in cash and followed by R1.25m once the deal is signed and then followed by R300000 a month for four months.
Gold Brands said the value of the net assets of Black Steer at the end of February was R3.34m, while profit after tax attributable to the net assets for the year to the end of February was R787150.
The disposal is classified as a Category 2 transaction in terms of the listings requirements of the JSE.
Besides the asset being disposed, Gold Brands owns food chains such as Chesa Nyama, 1+1 Pizza, Opa!Pitaland and Chicken Wild Wings.
Last week, Gold Brands released its results for the year to the end of February, saying that it had a difficult year as it posted a loss of R16m. This, however, was an improvement from the R48.5m loss reported last year. Revenue declined to R40.2m, down from R142.8m, while headline loss a share was 12.27cents a share, compared with last year’s headline loss of 40.89c a share.
The group did not declare a dividend during the period.
During the results presentation the group also announced that it has strengthened its portfolio by acquiring 50percent of the rights, trademarks and intellectual property of Ed’s Diner from its owner Vasilis Lazaridis.
Gold Brands will own the exclusive rights to roll out and franchise the Ed’s Diner concept throughout the country as it plans to roll out 10 of Ed’s Diner stores in the next five years.
- BUSINESS REPORT