| Fri 14 Nov 2008, 16:28 | | BNT - Bonatla - Acquisition Of The Shares In And Claims Against Tiffski |
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BNT
BNT
BNT - Bonatla - Acquisition Of The Shares In And Claims Against Tiffski
Property Investments (Proprietary) Limited ("Tiffski") ("The Acquisition")
BONATLA PROPERTY HOLDINGS LIMITED
(Registration number 1996/014533/06)
Share code: BNT & ISIN: ZAE000013694
("Bonatla" or "the Company")
ACQUISITION OF THE SHARES IN AND CLAIMS AGAINST TIFFSKI PROPERTY INVESTMENTS
(PROPRIETARY) LIMITED ("Tiffski") ("THE ACQUISITION")
1. INTRODUCTION
Shareholders are advised that an agreement was signed on 11 November 2008
between Bonatla and Tiffski, whereby Bonatla agrees to purchase, and Tiffski
agrees to sell, all the shares in and claims against Tiffski, for a total
purchase consideration of R120 million, less any existing indebtedness of
Tiffski at the time of transfer of ownership of the asset, which amount is
limited to R15 million. The effective date of the acquisition is 31 December
2008.
2. NATURE OF BUSINESS OF TIFFSKI
Tiffski is a property holding company which has as its main asset the
remaining extent of portion 1 of the farm Tiffindell number 17, Senqu
Municipality, division of Barkly East, Eastern Cape Province. At present,
the property is leased to Tiffindell Ski Limited ("the lessee") and operates
primarily as a skiing and snowboarding resort. The annual rental income for
the period 1 April 2008 to 31 March 2009 amounts to R3,9 million excluding
VAT, together with 7.5% of turnover plus VAT, payable in May and November of
each year. In addition, the lessee is liable pro rate for municipal rates
and taxes, water and electricity costs and any other local authority charges.
The existing rental base, comprising accommodation of 138 rooms and
conference facilities has a gross lettable area of 4 500 square meters. The
net rental income is R140 per square meter per month. This includes a 7,5%
levy on the turnover of the operation, and the net rental payable in respect
of any additional capital expenditure.
3. RATIONALE FOR THE ACQUISITION
Bonatla`s original strategy always was, and continues to be based on
associating property investments yielding rental income with development, on
a non-speculative basis. This has, and will continue to enable the Company to
achieve higher than average returns as was achieved in the past and confirmed
by the I-Net Bridge survey published in November 2005, in which Bonatla had
over a 5 year period, a reported ROE of 89% pa.
The Tiffski investment is consistent with this strategy. It provides a strong
existing rental base coupled with the opportunity to exploit the development
potential of this unique site.
The development will be through the expansion of the accommodation, the
conference, and other leisure related facilities.
This acquisition fits in well with the initial leisure and mixed use
transactions secured by Bonatla. Association with the strong management
infrastructure will be synergistic with the strategic direction Bonatla has
taken, and will enhance the management capability of the company required in
developing the full potential of the balance of the portfolio.
4. PURCHASE CONSIDERATION
The purchase consideration of R120 million less any indebtedness, is to be
satisfied by the issue of up to 210 000 000 ordinary shares in the issued
share capital of Bonatla, to be listed on the JSE Limited by 125 January
2009.
5. VENDORS
The vendors to the transaction are David William Taylor and the Barking Dog
Trust, represented by Timothy Graham Bell.
6. CONDITIONS PRECEDENT
The acquisition is subject to the following conditions precedent:
a circular detailing the transaction being approved by the JSE Limited and
the SRP, where applicable;
a due diligence to be completed to Bonatla`s satisfaction by 22 November
2008; and
the property to be registered in Bonatla`s name as at the effective date.
7. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
Pro forma financials and profit forecasts are in the process of being
prepared and shall be released shortly.
8. CIRCULAR TO SHAREHOLDERS AND GENERAL MEETING
In terms of the JSE Listings Requirements, the acquisition constitutes a
category 1 acquisition, and is subject to the approval of shareholders in
general meeting. A circular is in the process of being prepared and shall be
posted to shareholders, together with a notice of general meeting, in due
course.
Sandton
14 November 2008
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
Date: 14/11/2008 16:28:01 Produced by the JSE SENS Department.
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