| Wed 8 Dec 2010, 14:37 | | KAP - KAP International Holdings Limited - Disposal by Feltex Holdings to |
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KAP
KAP
KAP - KAP International Holdings Limited - Disposal by Feltex Holdings to
Steinhoff Properties
KAP INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 1978/000181/06
ISIN: ZAE000059564
Share Code: KAP
("KAP" or "the Company")
DISPOSAL BY FELTEX HOLDINGS (PROPRIETARY) LIMITED ("Feltex" or "the Seller"), A
WHOLLY OWNED SUBSIDIARY OF KAP, OF A PORTION OF THE PROPERTY SITUATED IN
KILLARNEY (CAPE TOWN) TO STEINHOFF PROPERTIES (PROPRIETARY) LIMITED ("Steinhoff
Properties" or "the Purchaser")
1 THE DISPOSAL
KAP shareholders are hereby advised that Feltex has entered into an
agreement dated 1 December 2010 whereby it will dispose of a portion,
measuring approximately 22 425 square metres ("the Portion") of the
property situated in Killarney (Cape Town), being Portion 7 of the Farm No.
235, held under Title Deed No. T2181/91 ("the Property"), to Steinhoff
Properties for a purchase consideration of R14 775 443 ("the Purchase
Consideration") ("the Disposal"). The effective date of the Disposal is
the date upon which the condition precedent, as detailed in paragraph 4
below, has been fulfilled ("the Effective Date").
2. Rationale for the DISPOSAL
The portion of land in question is not being utilised, and the Disposal is
part of the group`s ongoing drive to reduce debt by disposing of non-core
assets.
3 PURCHASE consideration
3.1 The Purchase Consideration, plus Value Added Tax thereon, will be paid in
cash on the date on which the registration, in the appropriate Deeds
Registry, of transfer of the Portion into the name of the Purchaser ("the
Registration") has been effected.
3.2 The payment of the Purchase Consideration, as detailed in paragraph 3.1
above, will be secured by the delivery by the Purchaser within 14 days of
the Effective Date, of a banker`s guarantee acceptable to the Seller and
made payable to the Seller or its nominee upon Registration.
3.3 The Seller has not provided any warranties in respect of this transaction.
4. Condition precedent
The Disposal is subject to the approval of the sub-division of the Property
into two portions, namely the Portion and the remainder of the Property
after such sub-division, by the relevant authority and compliance by the
Seller with all the conditions that may be imposed by the local authority
when granting such approval ("the Sub-division"). Should the Sub-division
not be approved, the Purchaser and the Seller will enter into a long-term
lease agreement.
5 Unaudited Pro FORMA financial effects
The unaudited pro forma financial effects on KAP before and after the
Disposal, as set out in the table below, are the responsibility of the
Company`s directors, and have been prepared for illustrative purposes only
to show how the Disposal may have affected KAP`s results for the year ended
30 June 2010.
The unaudited pro forma financial effects, which, due to their nature, may
not fairly reflect KAP`s financial performance and position after the
Disposal, are based on the assumptions that:
5.1 for the purpose of calculating earnings per ordinary share (basic and
diluted) ("EPS") and headline earnings per ordinary share (basic and
diluted) ("HEPS"), the Disposal was effected on 1 July 2009; and
5.2 for the purpose of calculating net asset value and net tangible asset
value per ordinary share, the Disposal was effected on 30 June 2010.
Before the After the Change Change
Disposal Disposal (cents) (%)
audited Pro forma
(cents) 1 (cents) 2,4
EPS 20.6 23.3 2.7 13.1%
HEPS 21.0 21.3 0.3 1.4%
Net asset value per 312.6 315.1 2.5 0.8%
share
Net tangible asset value 296.9 299.4 2.5 0.8%
per share
Weighted number of 424,5 424,5 - -
shares in issue
(million)
Actual number of shares 424,5 424,5 - -
in issue
Notes
1 Based on the audited results for year ended 30 June 2010;
2 The "after the Disposal" financial information reflects the inclusion of a
profit on Disposal attributable to ordinary shareholders of KAP amounting
to R12.1 million;
3 For purposes of EPS and HEPS, interest on the Purchase Consideration was
calculated on an average borrowings rate of 9.8%;
4 The taxation rate applied to interest income was 28%, with capital gains
tax provided for on profit on Disposal calculated at 14%.
6. CATEGORISATION AS A SMALL RELATED PARTY TRANSACTION
The Seller is a material shareholder of KAP, currently owning 32.5% of
KAP`s issued share capital, and is therefore a related party to KAP.
However, the Disposal is categorised as a small related party transaction
for KAP in terms of the Listings Requirements of the JSE Limited, as the
categorisation percentage is less than 5%.
In view of the fact that the Company has obtained a valuation report on the
Property from an independent valuer, which indicates that the value of the
Portion is in line with the Purchase Consideration, the Disposal is
regarded as being fair insofar as the shareholders of KAP are concerned,
and accordingly does not require shareholder approval.
Paarl
8 December 2010
Sponsor: PSG Capital (Proprietary) Limited
Date: 08/12/2010 14:37:01 Produced by the JSE SENS Department.
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