Incorporated in the Republic of South Africa
(Registration number: 1924/002590/06)
Share code: AFE ISIN: ZAE000000220
Hybrid code: AFEP ISIN: ZAE000000238
Bond company code: AECI
(“AECI” or “the Group” or “the Company”)
Shareholders and bondholders are referred to the final dividend declaration announcement released on SENS on Wednesday, 25 February 2020, wherein shareholders and bondholders were advised that the Board of Directors of AECI ("the Board") had declared a gross final cash dividend of 414 cents per share for the year ended 31 December 2019.
In the commentary on the Company's audited financial results for the year then ended, also released on SENS on 25 February 2020, the effects of the outbreak of COVID-19 in China in January 2020 and its rapid spread thereafter was identified as a new and serious concern. COVID-19 has since been declared a pandemic. The duration and extent of the impact it will have on the Group's businesses, and those of its customers in the countries in which the Group operates, is uncertain.
In South Africa, a 21-day national lockdown commenced on 26 March 2020 in line with the COVID-19 pandemic mitigation measures announced by President Cyril Ramaphosa on 23 March 2020.
The Company has stress tested multiple solvency and liquidity scenarios. No loan covenants were breached in any of those scenarios. Notwithstanding the confirmation of AECI's robust financial position in terms of liquidity, the Board has considered it prudent and in the best interests of the Company and all its stakeholders to postpone the payment of the dividend that was scheduled for Monday, 6 April 2020.
The dividend is payable to holders of ordinary shares recorded in the register of the Company at the close of business on the record date, being Friday, 3 April 2020. The last day to trade "cum" dividend is Tuesday, 31 March 2020 and shares will commence trading "ex" dividend as from the commencement of business on Wednesday, 1 April 2020.
The Board believes that the postponement of the dividend payment, amounting to R448 million, together with the Company's undrawn committed banking facilities of approximately R2 400 million, will position AECI to remain well capitalised through these uncertain times.
Businesses which have been determined by government as essential to support its response to the pandemic are exempted from the lockdown measures.
Certain operating entities in the Group provide raw materials, intermediates, products and services to customers who, based on current information at the Board's disposal, are considered essential businesses as envisaged in the lockdown period in South Africa. These customers are in sectors that include among others personal healthcare, food and beverage, water treatment, electricity supply, agriculture and mining.
As such, these Group entities are required to remain operational to fulfil the Company's vital link in the value chain for essential products and services.
Information on the revised payment date will be communicated to shareholders and bondholders no later than on or about 29 July 2020, when AECI releases its interim results for the half-year ending 30 June 2020.
The Board will continue to monitor the impact of COVID-19 on the Company's operations and its financial position. AECI remains focused on disciplined cash management, specifically in the areas of working capital, capital expenditure and cost control during this time of uncertainty.
27 March 2020
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)