| Tue 19 Oct 2010, 9:10 | | IFH - IFA Hotels and Resorts - Disposal of Olifa Hotels and Resorts Namibia |
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IFH
IFH
IFH - IFA Hotels and Resorts - Disposal of Olifa Hotels and Resorts Namibia
(Proprietary) Limited and withdrawal of cautionary announcement
IFA Hotels and Resorts Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1919/001318/06)
Share code: IFH
ISIN: ZAE000075669
("IFA" or "the Company")
IFH - DISPOSAL OF OLIFA HOTELS AND RESORTS NAMIBIA (PROPRIETARY) LIMITED
("OLIFA") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Disposal of the Company`s shares and loan claims in Olifa Hotels and Resorts
Namibia (Proprietary) Limited (being a 50% beneficial interest) to its equal
Namibian partner, Khan Construction Company (Proprietary) Limited ("the Olifa
Disposal").
1.1 Description of the transaction
Shareholders are advised that IFA has signed an agreement with Khan Construction
Company (Proprietary) Limited (a private company incorporated in the Republic of
Namibia) ("Khan"), dated 4 October 2010, relating to the sale of its shares and
loan claims in OLIFA) for a total cash consideration of N$ 49.039 million. The
consideration, including interest at Nedbank Namibia`s prime rate, is to be
settled in twenty-four equal installments commencing on 31 May 2011 with the
last payment being due on 30 April 2013.
Khan shall be entitled to anticipate the payment of the purchase consideration
in a reduced amount of:
- N$34.7 million if payment thereof is made between 01 and 31 October 2010;
- N$35.425 million if payment thereof is made between 01 and 30 November
2010; and
- N$36.163 million if payment thereof is made between 01 and 31 December
2010.
The sale is subject to the fulfillment of a condition precedent by no later than
31st December 2010, being the unconditional approval of the sale by the Namibian
Competition Commission in terms of the Competition Act.
The closing date shall be 5 days after the fulfillment of the said condition
precedent and the effective date of the transaction shall, if the condition is
fulfilled, be 01 May 2010, being the date from which Khan shall be entitled to
all the benefits of the Olifa Disposal and provide any financial support that
may be necessary to OLIFA.
1.2 Description of assets and rationale for the sale
OLIFA is the joint venture company through which IFA and Khan develop and/or
operate mixed use resort developments comprising five-star hotels together with
top-end residential and retail facilities in Namibia. The sale of IFA`s
interest allows its partner, the Ohlthaver & List Group (the holding company of
Khan) to promote these operations in Namibia and IFA will direct its attention
to its other South African investments. The proceeds from the Olifa Disposal
will be utilised to fund ongoing operations.
1.3 Pro forma financial effects
The unaudited pro forma financial effects of the Olifa Disposal are presented
below. Such pro forma financial effects are the responsibility of the board of
directors of IFA. The pro forma financial effects are presented for illustrative
purposes only and because of their nature may not fairly present IFA`s financial
position, changes in equity, results of operations or cashflows after the Olifa
Disposal. The pro forma financial effects have been prepared on the assumption
that the Olifa Disposal took place on 1 July 2009 for Statement of Comprehensive
Income purposes and 30 June 2010 for Statement of Financial Position purposes,
respectively.
Before the After the
Olifa Disposal Olifa Disposal %
Basic loss per (31.24) (22.77) 27
ordinary share for the
twelve months ended 30
June 2010 (cents)
Headline loss per (26.59) (18.06) 32
ordinary share for the
twelve months ended 31
June 2010 (cents)
Net asset value per 36.25 45.08 24
ordinary share at 30
June 2010 (cents)
Net tangible asset 35.20 44.03 25
value per ordinary
share at 30 June
2010 (cents)
Number of ordinary 218 210 680 218 210 680 0
shares in issue at the
end of the period
Notes:
a) The "Before" financial information has been extracted without adjustment
from the published results of IFA for the year ended 30 June 2010.
b) The "After" financial information has been prepared on the assumption that
Khan will not anticipate the reduced payment of the purchase consideration
as set out in 1.1 above.
c) Earnings and headline earnings per share have been adjusted to:
a) Exclude the proportionally consolidated results of OLIFA, being a loss
of R13.3m; and
b) Include notional interest income of R5.3m from the unwinding of the
deferred purchase consideration.
d) The net assets and net tangible assets values per share have been adjusted
to exclude the proportionally consolidated financial position of OLIFA as
at 30 June 2010 which reflects a net liability position of R19.3m.
e) The loan account relating to OLIFA is fairly stated at R44.7m in the
published results of IFA for the year ended 30 June 2010, following an
impairment entry.
f) No incremental costs are expected to be incurred by IFA in executing the
Olifa Disposal.
1.4 JSE Documentation
As this is a Category 2 transaction in terms of the JSE Limited
Listings Requirements, no other action is required by the company or its
shareholders.
2. Withdrawal of Cautionary Announcement
Shareholders are referred to the announcement made on 1 July 2009 ("the July
announcement") and the cautionary announcements dated 12 August 2009, 28
September 2009, 9 November 2009, 6 January 2010, 16 February 2010, 30 March
2010, 6 May 2010, 21 June 2010, 2 August 2010 ("the August announcement") and 14
September 2010, and are advised that the negotiations referred to in such
announcements have been completed. Caution is therefore no longer required to be
exercised by shareholders when dealing in the company`s shares.
For and behalf of the board.
Zimbali
19 October 2010
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 19/10/2010 09:10:00 Produced by the JSE SENS Department.
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