| Mon 5 Nov 2007, 17:02 | | EMG - Emergent - Announcement to linked unit holde |
|
EMG
EMG
EMG - Emergent - Announcement to linked unit holders of Emergent, renewed
cautionary announcement and change in sponsor
Emergent Properties Limited
(Formerly Sizafika Property Investments Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1969/002908/06)
Share code: EMG & ISIN: ZAE000097754
("Emergent or "the company")
ANNOUNCEMENT TO LINKED UNIT HOLDERS OF EMERGENT, RENEWED CAUTIONARY ANNOUNCEMENT
AND CHANGE IN SPONSOR
Further to the announcements dated 4 May 2007 and 1 August 2007, the Board of
Directors wish to inform unit holders that Emergent Investments (Pty) Limited
("EI") (formerly Summer Sun Trading 224 (Pty) Limited and formerly a wholly
owned subsidiary of the Company) has entered into an agreement, dated 25 July
2007, with a number of private equity funders in terms of which:
* EI has acquired a portfolio of properties from TSA Properties CC; Globus
Investments (Pty) Ltd; Argo Investments 1 (Pty) Ltd; WVD Investments (Pty)
Ltd; Co-Props 56 (Pty) Ltd and Norcotrade 012 CC for a consideration of
R496,065,700. The private equity investors jointly invested R147,282,000
by way of a subscription for ordinary shares and "A" loans in EI with
Nedbank Limited providing mortgage finance of R348,783,700 to EI.
* Emergent has subscribed for R2,541,000 in ordinary shares and "A" loans in
EI (an equity interest of 1,7%) . In addition, Emergent has been credited
with a R22,000,000 "B" loan in EI. The "B" loan is subject to the following
terms and conditions, the B Loan:
* is subordinated to all the "A" loans in the event of a liquidation;
* will be repaid in tranches of R2,500,000 per R10,000,000 of surplus
from the disposal of the entire property portfolio in excess of
R505,000,000.
* will attract interest at a variable rate as determined by the Board of
Directors of EI from time to time.
Emergent has appointed a member to the Board of Directors of EI.
A shareholders agreement has been concluded between the parties, which
agreement provides for minority protection, the distribution of surplus
assets and cash such that the net tangible asset value of Emergent will not
be less than R1 000 000, appointment of directors, relationship between the
shareholders and deadlock resolutions.
Pro forma financial effects of the transaction
The pro forma financial effects set out below are the responsibility of the
directors and have been prepared for illustrative purposes only and, due to
their nature, may not fairly present Emergent`s financial position, changes in
equity, results of operations or cash flows. The balance sheet effects have
been prepared as though the transaction occurred as at 31 March 2007. Pro forma
financial effects on earnings and headline earnings per share have not been
shown as they are regarded as being immaterial for disclosure.
The impact of the transaction on the net asset value ("NAV") and net tangible
asset value ("NTAV") of Emergent is set out below:
Before the After the Percentage
transaction transaction change (%)
(cents) (cents)
NAV and NTAV per Emergent 74.9 260.1
linked unit
247
Linked units in issue 8 739 790 8 739 790
Assumptions:
1. The NAV and NTAV per Emergent linked unit, as set out in the "Before the
proposed transaction" column of the table, are based on the unaudited
interim balance sheet of Emergent at 31 March 2007.
2. The NAV and NTAV per Emergent linked unit, as set out in the "After the
proposed transaction" column of the table, are based the assumptions that
the proposed transaction was implemented on 31 March 2007, and the
attributable value of the "B" loan in EI is R16,250,000 based on the
directors` valuation of the EI property portfolio of R570 million.
SUSPENSION OF LISTING
Discussions are taking place with the JSE Limited ("JSE") regarding the
suspension and termination of the listing on the JSE and linked unit holders
will be kept informed of those discussions.
THE BOARD OF DIRECTORS
The Board of Directors of Emergent has been reconstituted as follows: DA White
(Chairman), LD van Wyk and JD van der Burgh. A fourth director will be
appointed shortly in order to ensure compliance with the JSE Listings
Requirements.
FUTURE DIRECTION OF EMERGENT
As Emergent has not acquired a substantial property portfolio as originally
envisaged, the Board of Directors has decided to pursue the acquisition of other
suitable assets for acquisition by the company, although they may not be in the
property sector.
The Board of Directors has signed a non-binding heads of agreement with the
shareholders of Trimanex Holdings Limited ("Trimanex") to acquire the entire
issued share capital of Trimanex in exchange for shares in Emergent. Trimanex is
the owner of significant proven reserves of copper and cobalt in various parts
of Africa and conducts a profitable mining and refining operation.
The agreement is subject to the following terms and conditions:
* The purchase price for the Trimanex shares will be the market value
thereof as determined by Investec Limited, the corporate finance
advisor appointed by Trimanex. The purchase price will be discharged
by the issue of new consolidated shares in Emergent at R8,00 per
share;
* The purchase price shall be discharged within 7 (seven) days) of the
final agreement becoming unconditional;
* Emergent conducting a comprehensive due diligence investigation by 28
February 2008 and Emergent being satisfied with the outcome of such
due diligence investigation. It is recorded that the vendors and
Trimanex have appointed Snowdens to conduct a "Competent Persons
Report" on the mining assets of Trimanex;
* The vendors conducting a comprehensive due diligence investigation on
Emergent by 28 February 2008 and the vendors being satisfied with the
outcome of such due diligence investigation;
* Emergent complying with all the listing requirements of the JSE,
including those applicable to the acquisition of mining assets, the
JSE agreeing to the continued listing of Emergent in terms of its
listing requirements and the granting of a listing of the additional
new consolidated shares to be issued in terms of the transaction;
* Emergent complying with the rules of the Securities Regulation Panel
and the shareholders of Emergent passing a resolution in terms of
which the requirement of a mandatory offer is waived;
* Approval of the Competition Commission, to the extent required;
* The parties entering into a comprehensive written agreement within 7
(seven) days of the completion of the last due diligence
investigation, which agreement will include such warranties and
undertakings as are normal in agreements of that nature. In the event
that the parties are unable to agree on the terms of the detailed
agreement then the heads of agreement shall remain of full force and
effect.
* The controlling shareholders of Emergent giving underwritten
undertakings to the vendors to vote in favour of all shareholders
resolutions required to:
* Approve the acquisition of the Trimanex shares;
* Increase the authorised share capital of Emergent;
* Consolidate the existing authorised and issued shares on a 1 for
10 ratio;
* Change the name of Emergent to Trimanex Holdings Limited; and
* Appoint the nominees of the vendors to the board of directors of
Emergent.
* If the transaction regarding the purchase of Trimanex is completed,
the controlling shareholders of Emergent undertake to grant the
Sellers a right of first refusal to purchase their shares in Emergent
within 24 (twenty four) hours for a period of six months from date of
listing of Trimanex, at the seven day moving average of price of the
Trimanex shares on the JSE.
If the transactions are successfully concluded then Emergent will distribute
either assets or cash or a combination thereof to the linked unit holders
registered at a date to be determined by way of a dividend and/or a reduction of
the debentures totaling approximately 220 cents per share, change its name to
Trimanex Holdings Limited, the remaining debentures will be converted into
shares, the resultant share capital consolidated and application will be made to
the JSE to transfer the listing to the "Mining Sector".
CIRCULAR TO EMERGENT LINKED UNIT HOLDERS
A circular incorporating the relevant information required for the proposed
transactions and incorporating the notice convening the Emergent general meeting
at which Emergent linked unitholders will vote on the implementation of the
proposed transactions, will be posted to Emergent linked unitholders within 28
days of the completion of the due diligence investigations.
OPINION
The board is of the opinion that the terms of the proposed transactions are
beneficial to Emergent linked unitholders.
CHANGE OF SPONSOR
Shareholders are advised that Arcay Moela Sponsors (Proprietary) Limited have
been appointed as sponsor to Emergent with immediate effect.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Linked Unit holders must continue to exercise caution in the trading of their
linked units
Sandton
05 November 2007
Sponsor Reporting accountants Attorneys
and auditors
Arcay Moela Horwath Leveton Boner Fluxmans Inc
Sponsors
(Proprietary)
Limited
Date: 05/11/2007 17:02:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
