| Thu 2 Dec 2010, 16:36 | | ORE - Orion Real Estate Limited - Purchase of properties from New Selborne |
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ORE
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ORE - Orion Real Estate Limited - Purchase of properties from New Selborne
Investment Company (Pty) Limited (in liquidation) and renewal of cautionary
announcement
ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000075651
("Orion Real Estate" or "the company")
PURCHASE OF PROPERTIES FROM NEW SELBORNE INVESTMENT COMPANY (PTY) LIMITED (IN
LIQUIDATION) AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Shareholders are advised of the purchase of a business as a going concern, New
Selborne Investment Company (Pty) Limited ("the seller"), which is in
liquidation and situated at Selborne Estate in Pennington, KwaZulu Natal, for
the purchase price of R15 500 000 by Orion ("the purchaser"), subject to the
conditions precedent noted below. The effective date of the transaction will be
1 December 2010. The business will be an income-earning activity on the
effective date. The seller is not a related party.
The seller was placed in provisional liquidation on 11 May 2010 and the order
was made final on 24 June 2010.
The seller carried on the business as a property developer and hotelier at
Selborne Estate in Pennington, KwaZulu-Natal.
The business includes The Selborne Hotel and Spa and Conference Centre, the
movable assets comprising of furniture, fixtures, fitting, equipment and
computers necessary for the operating of the hotel and conference centre, stock-
in-trade consisting of all food and beverages at the effective date and the 25
sectional title units which house the hotel and conference centre and garden
rooms which service the hotel and the real rights to extend the sectional
scheme.
Conditions Precedent
- Approval from the JSE Limited.
All the conditions precedent have been met, where applicable.
Prior to liquidation, the seller entered into a number of rental pool agreements
with various third parties. As from the effective date the rights and
obligations to these rental pool agreements have been ceded and assigned to the
purchaser.
Terms of the purchase
In terms of the agreement dated 17 September 2010, the purchase consideration of
R15.5 million, comprising R15 300 000 plus a cost value of stock in an amount of
R200 000 and is payable in cash.
Rationale for the purchase
The purchase was effected in the ordinary course of business in line with the
company`s strategy of the expansion of the Orion group.
Pro forma financial effects of the purchase
The table below summarises the pro forma financial effects of the purchase on
the published audited results of Orion for the year ended 30 June 2010, as
though the purchase had been in effect from 1 July 2009 for income statement
purposes and at 30 June 2010 for balance sheet purposes.
The pro forma financial effects, which are the responsibility of the directors,
have been prepared for illustrative purposes only and, due to their nature, may
not fairly present Orion`s financial position, changes in equity, results of
operations or cash flows.
Published Pro forma Percentage
30 June 2010 30 June 2010 change (%)
Before After
Earnings per 8.40 8.43 0.36
ordinary share
(cents)
Headline earnings 0.03 0.05 66.67
per ordinary share
(cents)
Net asset value 56.89 56.91 0.04
per share (cents)
Net tangible asset 56.89 56.91 0.04
value per share
(cents)
Weighted average 627 009 822 - 627 009 822
shares in issue
(`000)
Shares in issue at 630 698 688 - 630 698 688
period end
Assumptions:
1. The "Before" column is extracted from the audited results for the year
ended 30 June 2010 as published.
2. The "After" column in terms of net asset and net tangible asset value per
share reflects the adjustment for the purchase price of the property and
stock of R15 500 000, settled through a cash payment.
3. The "After" column in terms of earnings and headline loss per share
reflects the adjustment for the results in relation to the property,
adjusted for an increase in the interest payable on the new bond of R15 500
000 at a JIBAR interest rate of 8.5%, as well as notional taxation at 28%.
4. The weighted average shares and shares in issue at period end have assumed
to stay the same at 630 698 688 shares.
Renewal of cautionary announcement
As a result of continued negotiations in relation to the acquisition of other
properties, shareholders are advised that they should continue to exercise
caution when dealing in their securities until a further announcement is made.
JOHANNESBURG
2 December 2010
SPONSOR
Arcay Moela Sponsors (Pty) Limited
Date: 02/12/2010 16:36:01 Produced by the JSE SENS Department.
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