enX Group Limited (JSE:ENX) News - Acquisition Of Properties Utilised By The Company’s Oil Lubricants Business

ENX GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
JSE share code: ENX ISIN: ZAE000222253
(“enX” or “the Company”)

ACQUISITION OF PROPERTIES UTILISED BY THE COMPANY’S OIL LUBRICANTS BUSINESS

1.    Introduction

      Shareholders are advised that enX, acting through its subsidiary Ingwe Lubricants Proprietary Limited (“Ingwe”),
      has concluded a purchase of immovable property agreement with Relta 25 Proprietary Limited (“Relta”) in
      relation to the acquisition by Ingwe of the plant (“Plant”) and adjacent land (“Adjacent Land”) utilised by AG
      Lubricant’s, enX’s oil lubricants business (“the Transaction”), which are currently being leased. The aggregate
      Transaction consideration is R83,9 million.

2.    Description of Ingwe and Relta

      Ingwe is a dormant company that forms part of the group companies that comprise enX’s oil lubricants business.
      This business produces and markets oil lubricants and greases in South Africa and sub-Saharan Africa. It is the
      sole distributor of ExxonMobil lubricants and Quaker Houghton International’s Advanced Fluids Solutions and
      Services.

      Relta is a property company owning only the Plant and Adjacent Land.

3.    Rationale for the Transaction

      A lease agreement in relation to the Plant was concluded by the oil lubricants business in November 2016. This
      agreement included an option to acquire the Plant, which option is due to expire at the end of February 2022. It
      has always been enX’s intention to acquire the Plant to the extent that the prospects of the oil lubricants business
      warranted such an investment, which the board believes its does. Furthermore, there has been and there is intended
      to be further investment in the Plant, which the board believes is best done as an owner rather than tenant. During
      the course of the Plant lease a smaller property, being the Adjacent Land, was also leased from Relta. The
      Adjacent Land is been acquired with a view securing space to expand operations in future.

4.    Structure and certain terms of the Transaction

      The Transaction incorporates the acquisition of the following erven for R68,9million and R15million in cash
      respectively:
      - The Plant: Portion 171 (a Portion of Portion 89) of the Farm Klipfontein No. 83, Registration Division IR,
          Province of Gauteng, measuring 2,0215 hectares, and held by Relta in terms of Deed of Transfer No.
          T17/69138.
      - The Adjacent Land: Portion 271 (a Portion of Portion 89) of the Farm Klipfontein No. 83, Registration
          Division IR, Province of Gauteng, measuring 2,0215 hectares, and held by Relta in terms of Deed of Transfer
          No. T17/69138.
     The Transaction is subject only to Ingwe and enX providing Relta with an unconditional resolution of its
     respective board of directors approving the Transaction, by 23rd March 2022.

     The Plant and Adjacent Land are acquired "voetstoots".

5.   Structure and certain terms of the Transaction

     The effective date of the Transaction will be the date of registration of transfer of the Plant and Adjacent Land
     into the name of Ingwe, which is anticipated as being on or about 31 May 2022.

6.   Financial information

     The value of the net assets being acquired, comprising the Plant and Adjacent Land, is R83,9million. The pre-tax
     gross rental paid in respect of the Plant and Adjacent Land for the twelve months ended 31 August 2021 was
     R10,8 million.

     The above financial information has been extracted from the audited results of enX for the twelve months ended
     31 August 2021, which were prepared in terms of IFRS.

7.   Categorisation of the transaction

     The Transaction is classified as a category 2 transaction in terms of the JSE Listings Requirements.

24 February 2022


Sponsor

The Standard Bank of South Africa Limited

Date: 24-02-2022 10:27:00
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