| Mon 27 Aug 2007, 15:00 | | IFH - IFA Hotels & Resorts - Joint venture between |
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IFH
IFH
IFH - IFA Hotels & Resorts - Joint venture between IFA, International Property
Trading Holdings Limited and further cautionary announcement
IFA Hotels & Resorts Limited
(Incorporated in the Republic of South Africa)
(Registration number 1919/001318/06)
Share code: IFH
ISIN: ZAE000075669
("IFA" or "the company")
Joint venture between IFA, International Property Trading Holdings Limited
(IPTH) and Petrus Jacobus Johannes Cilliers (PEET) relating to the development
known as Legend Golf & Safari Resort ("Legends") and a game reserve known as
Entabeni Private Game Reserve and further cautionary announcement.
1. Introduction
Further to the cautionary announcements dated 9 May 2007, 19 June 2007 and 31
July 2007, IFA, as trustee for a wholly owned subsidiary yet to be formed, is
pleased to announce that it has entered into an agreement to acquire 20% of the
issued share capital of a joint venture company (JVCO), which is likely to be
named IFA & Legends Developments (Pty) Ltd ("the transaction"). The purpose is
the establishment of hotels, game lodges, vacation clubs, commercial and
shopping facilities and game reserves, all of a top class international
standard. PEET and IPTH will subscribe for 50% and 30%, respectively, of the
remaining issued share capital of the JVCO.
The transaction is classified as a Category 3 transaction in terms of the JSE
Listings Requirements. This announcement is therefore for information purposes
only and no action is required by IFA shareholders.
2. Nature of the business
The assets of the JVCO will comprise the business of Legend Golf and Safari
Resort (Proprietary) Limited, various land owning subsidiary companies and other
properties, currently owned by PEET. These will form part of the Golf and Safari
Resort development ("the development").
Entabeni Private Game Reserve`s properties comprise the freehold, leasehold and
other immovable property held in a number of subsidiary companies. This
includes five operational Lodges, a game reserve and a game ranger`s school.
JVCO will seek to simplify the group structure in due course.
The development is located in the Waterberg, Limpopo Province and is a 3 hour
drive from Johannesburg. Planning rights for 451 residential stands and 600
sectional title opportunities are in place. The construction of the first phase
and the golf course is practically complete and has been fully sold out by
private invitation.
The development will include a Golf Academy and Driving Range, an
internationally branded 5-star hotel with health spa and wellness centre,
conference facilities and recreational facilities for families.
The local community will also benefit through the establishment of the Legend
Foundation which will structure educational programmes to be offered at the Golf
Academy for the purpose of assisting in the upliftment of sport in the local
communities.
3 Rational for the transaction
The transaction will provide IFA with the opportunity to enter into the nature
and game hospitality sector and will also provide the company with future
opportunities to align this development with it`s Zimbali, Boschendal and
Namibian developments.
4 Details of the acquisition
4.1 The purchase consideration
The purchase consideration payable by IFA for its 20% stake is R15 million. IFA
will also provide a loan account in the J VCO for R65 million upfront.
4.2 The effective date
The effective date for the transaction is the date that the JVCO has acquired
and taken possession, transfer and ownership of the assets, companies and
properties.
5 Conditions precedent to the acquisition
There are no conditions precedent in the agreement.
6. Other conditions
IFA will loan an additional R30 million to the JVCO once all of the shares and
loan accounts in the subsidiary companies have transferred to the JVCO.
7 Pro forma financial effects
The effect of the transaction on IFA`s published net asset value and net
tangible asset value as at 30 June 2007 is not material (less than 3%) but as
the development progresses, the transaction is expected to increase IFA`s
retained earnings.
The table below sets out the unaudited pro forma earnings and headline earnings
per share of the transaction. The un-audited pro forma earnings and headline
earnings per share are presented for illustrative purposes only and because of
their nature may not give a fair reflection of IFA`s financial position after
the transaction. It has been assumed for purposes of the pro forma earnings and
headline earnings per share that the transaction took place with effect from 1
July 2006. The directors of IFA are responsible for the preparation of the
unaudited pro forma earnings and headline earnings per share.
Before 1 After the % Change
transaction
Published Pro forma
Earnings per share (cents) 9.31 15.07 +69.1%
Headline earnings per share 10.82 10.67 -1.4%
(cents)
Number of shares in issue 218,210,680 218,210,680 0
Notes:
1 It should be noted that all costs relating to the development have been
capitalised and no revenues recognised to date as the development is still
at an early stage.
The "Before" financial information is based on IFA`s published results for
the year ended 30 June 2007.
Pro-forma EPS included profit from the sale of land after deducting Capital
Gains Tax.
8 Further cautionary announcement
Shareholders are advised that IFA is continuing with negotiations with third
parties on separate matters which, if successfully concluded, may have a
material effect on the price of the company`s securities. Accordingly,
shareholders are advised to continue to exercise caution when dealing in the
company`s securities until a full announcement in this regard is made.
27 August 2007
Zimbali
Sponsor to the company
BDO QuestCo (Pty) Ltd
Date: 27/08/2007 15:00:01 Produced by the JSE SENS Department.
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