| Mon 22 Nov 2010, 10:50 | | QHL - Queensgate Hotels and Leisure Limited - Detailed Cautionary Announcement |
|
QHL
QHL
QHL - Queensgate Hotels and Leisure Limited - Detailed Cautionary Announcement
QUEENSGATE HOTELS AND LEISURE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
Share code: QHL ISIN Code: ZAE000113718
("Queensgate" or "the company")
DETAILED CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Following the cautionary announcements dated 15 June 2010, 29 July 2010 and 10
September 2010, the Company is pleased to advise that a Heads of Agreement has
been signed between the Company and Realcor Holdings (Proprietary) Limited
("Realcor") dated 08 November 2010.
Realcor business includes construction, development and investment across
various property disciplines of residential, hospitality and commercial
property.
The details of the Heads of Agreement state that Realcor will sell its business
as a going concern to the Company for a purchase consideration of R1.207 billion
which has been calculated with reference to the value of the assets of Realcor
as at 20 October 2010, which are partly supported by profit warranties from
Realcor. The purchase consideration will be settled through the issue of shares
in Queensgate which will result in a dilution of 92% (which includes 2% in
settlement of advisors fees) for existing shareholders. This proposed
acquisition is in line with the Company`s recapitalisation strategy.
Shareholders are cautioned that the implementation of the proposed acquisition
will result in a reverse takeover of Queensgate, a change in control and the
intended reconstitution of the board of directors. The JSE Listings
Requirements stipulate that the Company can only retain its listing following
the reverse listing if the JSE is satisfied that the Company continues to
qualify to be listed. Realcor will be making an application for listing to the
Alternative Exchange Advisory Committee.
On implementation of the proposed acquisition, Realcor`s shareholding in
Queensgate will increase from 0% to approximately 90%. The acquisition is thus
an "affected transaction" under the SRP Code, which ordinarily would require the
vendor to make a mandatory offer to acquire the Queensgate shares owned by all
Queensgate shareholders.
The SRP has advised that it is willing to consider an application to grant a
dispensation to the vendors, in terms of the SRP Code, from the obligation to
make a mandatory offer to acquire the ordinary shares of Queensgate shareholders
if Queensgate shareholders in general meeting, waive their right to require the
vendor to make a mandatory offer and subject to the SRP considering any
representations (if any) made by Queensgate shareholders. The full details of
the application for the dispensation in terms of Rule 8.7 of the Code will be
contained in the circular to be sent to shareholders in due course.
The transaction is subject to the following conditions precedent:
By 28 February 2011:
Shareholder approval of both Realcor and Queensgate shareholders by the
requisite majority;
Approval of Realcor`s business plan by the Alternative Exchange Advisory
Committee;
Competition Authorities, Securities Regulations Panel and JSE Limited approval
(if required);
Written agreements to be concluded between Queensgate and its` creditors
accepting the settlement arrangements undertaken by Realcor in respect of the
Queensgate creditors;
Realcor to present a bank guarantee for the cash to be advanced by Realcor to
Queensgate in respect of the part settlement of Queensgate`s creditors;
By 3 December 2011:
* Realcor conducts a comprehensive legal and financial due diligence
investigation into the affairs of Queensgate;
* Queensgate conducts a comprehensive legal and financial due diligence
investigation into the affairs of Realcor;
* Queensgate and Realcor conclude a comprehensive sale of business agreement
containing normal warranties for a transaction of this nature and the
following specific terms:
* Following the implementation of the listing, current Realcor
shareholders will hold no less than 90% of the total issued share
capital of Queensgate;
* Following the implementation of the listing, current Queensgate
shareholders will hold no less than 8% of the total issued share
capital of Queensgate;
* Following the implementation of the listing, no less than 1% of the
total issued share capital of Queensgate, shall be held in escrow, to
be distributed at the sole election of Realcor;
* Following the implementation of the listing, DC Liquid Capital Close
Corporation (or its nominee) will hold no less than 1% of the total
issued share capital of Queensgate;
Following the implementation of the listing, the board of directors of
Queensgate will be reconstituted in accordance with the pro rata shareholding as
set out above.
A final terms announcement, including pro forma financial effects will be
published in a separate SENS announcement once the comprehensive sale of
business agreement has been signed and the respective due diligences completed.
RENEWAL OF CAUTIONARY
Further to the cautionary announcements dated 15 June 2010, 29 July 2010 and 10
September 2010 respectively, shareholders are advised to continue to exercise
caution when dealing in the company`s securities until a further announcement is
made.
Johannesburg
22 November 2010
Designated Advisor
Arcay Moela Sponsors (Pty) Ltd
Date: 22/11/2010 10:50:01 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.
