Cavalier negotiating to sell wool scouring interest

MARKET RELEASE
27 September 2018


Cavalier negotiating to sell wool scour interest to focus on core carpet
business
Cavalier Corporation Limited (NZX: CAV) announces that it is nearing completion in negotiations to
sell its interest in Cavalier Wool Holdings Limited (CWH) which has wool scouring operations based
in Napier and Timaru.
This sale comprises its 27.5% shareholding in CWH and the property held by 50% owned CWS Assets
Limited (CWSA) which has been leased to CWH.
CWH is currently owned by Scouring Investments Limited (45%), Accident Compensation
Corporation (13.75%), Direct Capital Investments Limited (13.75%) and Cavalier. The proposed
transaction is to an experienced industry participant, who will purchase 70% of the shares of CWH,
with Scouring Investments Limited retaining a 30% share.
At the same time, Cavalier will enter into a long-term scouring agreement with CWH to secure its
ongoing access to wool scouring services on arm’s length commercial terms.
Cavalier will receive approximately $13.5 million in cash from the transaction, resulting in a non-cash
write down of approximately $11.8 million of its equity investment in CWH and CWSA.
Cavalier CEO Paul Alston says: “We were approached by an experienced wool scour investor and our
partners have all agreed to accept the offer. We do not believe it is essential to own scouring
infrastructure to secure the supply of scoured wool.
“The sale proceeds will significantly reduce our debt and strengthen our balance sheet enabling us
to explore investments in our core business of manufacturing and marketing high end carpet
solutions.”
A further announcement will be made upon finalisation of the negotiations or in the event such
negotiations are not successful and no transaction arises.

Ends
For further information please contact:
Alan Clarke
Cavalier Corporation Chair
021 368 818
alan.clarke@outlook.co.nz