| To: Business Editor | For immediate release |
DAIRY FARM CONFIRMS SIMAGO SALE
23rd December 1997 -- Dairy Farm International Holdings Limited said today that Centros Comerciales Continente S.A. had confirmed its commitment to the signing of the Sales Agreement for the acquisition of Simago, the Spanish supermarket chain.
Dairy Farm said that, following the satisfactory completion of due diligence allowed under the preliminary agreement signed in October, Continente had confirmed that it would sign the Sales Agreement shortly after the year end.
The Sales Agreement envisages a sales price of some 16.3 billion pesetas (US$109 million), which remains subject to adjustments based on Simago's 1997 trading performance. As part of the agreement, Continente will assume Simago's outstanding bank debt at the date of signing.
A sum of 13.8 billion pesetas (US$92 million), representing some 85% of the 16.3 billion pesetas sales price, will be paid in cash upon the signing of the Sales Agreement. The outstanding amount will be agreed and paid in cash by the end of March, following the audit of Simago's 1997 trading results. The sale remains subject to the approval of the European Commission.
Announcing the terms, Dairy Farm's Group Finance Director, Edouard Ettedgui, said that the carrying value of Simago's net assets at the 30th of June 1997 was some 13.3 billion pesetas and that, following the year end adjustments, Dairy Farm will disclose the profit on the sale with the announcement of its 1997 results. The proceeds from the sale will be used by Dairy Farm for working capital purposes.
Dairy Farm acquired Simago in 1990. The company operated 61 Simago supermarkets and 56 Super Descuento limited-assortment discount stores at 30th June 1997. Simago is among the top 10 supermarket chains in Spain with a grocery market share of about 1%. In 1996, Simago recorded a profit before interest of 47 million pesetas, and a loss before non-recurring items but after interest and tax of some 0.7 billion pesetas on sales of 64 billion pesetas.
Continente is the Spanish listed subsidiary of the French retail group Promodés.
Note: Peseta/US$ exchange at 23rd December 1997 at 150/$1
For more information, please contact:
| Dairy Farm Management Services Limited Edouard Ettedgui or Simon Neville |
(852) 2837-6483 (direct) (852) 2831-6481 |
| Ludgate Asia Limited Trish Harwood |
(office) (852) 2543-5413 |
Full text of this announcement can be accessed through the Internet at
"http://www.irasia.com/listco/sg/dairyfarm" and is also available through "First Call".
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