| Tue 4 Jan 2011, 16:44 | | BNT - Bonatla Property Holdings Limited - Update on Status of Various |
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BNT
BNT
BNT - Bonatla Property Holdings Limited - Update on Status of Various
Transactions
BONATLA PROPERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1996/014533/06
Share Code: BNT
ISIN Number: ZAE000013694
("Bonatla" or "the company")
UPDATE ON STATUS OF VARIOUS TRANSACTIONS
This announcement has been prepared in order to update shareholders on various
transactions undertaken and previously announced by Bonatla.
Shareholders are referred to the SENS announcement published by the JSE on 22
November 2010 relating to the suspension of Bonatla`s securities.
Shareholders are also alerted to the fact that the suspension of Bonatla`s
securities will remain in effect pursuant to the publication of this
announcement. The suspension of Bonatla`s securities will only be lifted if the
company, in all aspects, comply with the relevant JSE Listings Requirements.
1. The Umsuluzi Wildlife Reserve ("Umsuluzi") and Amahlubi 99 year lease
agreements
Shareholders are referred to the circular to shareholders dated 11 April 2009
(`the circular"), and are advised that the signed lease documents for the 99
year leases are in the process of being registered notarially by our attorneys
in KwaZulu-Natal. Umsuluzi is situated near Weenen in Kwazulu Natal, measuring
approximately 3 400 Hectares and comprising a lodge, tented camp and wild life
reserve whilst Amahlubi comprises 2 350 Hectares of land near Giants Castle in
Kwazulu-Natal. Bonatla is in the process of restoring the Umsuluzi lodge and
supports both the Umsuluzi and Amahlubi communities as part of its social
responsibilities. Whilst the 99 year leases for both Umsuluzi and Amahlubi were
acquired and the purchase consideration paid pursuant to the circular, the
notarial registration of the leases was delayed with the consent of Bonatla due
difficulties arising from land claims, associated technical difficulties from
the land claims and property descriptions as well as cash flow constraints of
the Umsuluzi and Amahlubi communities in relation to stamp duties. The delay
occurred with the consent of Bonatla due to the above difficulties. With the
resolution of the land claims and property description issues as well as the
abolition of stamp duty on leases, Bonatla has now given instruction for the
registration of the leases. Registration of the leases is expected before the
end of 2010, although this did not affect the acquisition of the leases. It
should be noted that no borrowings against these properties can be made without
notarial registration of the leases. However Bonatla does not intend borrowing
against either of these two leases.
2. Carbon Processing and Technologies (Pty) Limited ("Karbotek") acquisition
The Karbotek acquisition comprised the acquisition of land (Erf 1627 and Erf
1628, Escourt Extension 13, Number 230 Loskop Road, Escourt, Kwazulu-Natal) and
buildings on 80 000 square metres, including a charcoal and activated carbon
plant. At the time of acquisition, the property was independently valued at R45
million, which was the acquisition price and details of which were included in
the circular dated 11 April 2009. Shareholders are referred to the circular to
shareholders dated 11 April 2009, and are advised that Bonatla acquired
ownership of the property through the acquisition of 100% of the shares in
Karbotek and has a signed CM42 in this regard. The acquisition was conditional
on the lifting of the suspension of trade in the shares of Bonatla and
accordingly only came into effect from 31 October 2009. Whilst the delay in
acquisition impacted on the achievement of the profit forecast for the year
ended 31 December 2009 as further detailed below, the acquisition is complete
and the rental now accrues to the Bonatla group on a continuing basis.
3. Durban Point Development Company ("DPDC bulk")
Shareholders are referred to the circular to shareholders dated 11 April 2009,
and the subsequent circular in this regard dated 24 July 2009, and are advised
that the Environmental Impact Assessment ("EIA") with regard to the DPDC bulk is
still in the process of being finalised due to a number of objections in this
regard having been received.
The 200,000 square meters (comprising 30 000 and 170 000 square metres) of mixed
use bulk located at the Durban Point Waterfront will be transferred on the
finalisation of the litigation surrounding the EIA. Once the EIA is finalised
the final valuation of the DPDC bulk will be undertaken and the final purchase
price will be determined and settled through the issue of compulsory
convertible, non-redeemable, non-cumulative, non-participating preference shares
as detailed and approved in the above circulars. Shareholders are advised that
the rental guarantee which is in place whereby rental of R167 000 per month was
underwritten by the vendor and as contracted for in the circular to shareholders
has been successfully enforced and will remain in place until the transfer of
the above bulk. Accordingly, whilst the company does not yet own the 30 000 and
170 000 mixed use DPDC bulk, it is still receiving the rental guarantee of R167
000 per month until such time as the EIA process can be finalised.
4. Morgan Creek Properties Ten (Pty) Limited ("Morgan Creek")
Morgan Creek holds land and buildings situated in Pinetown known as the Nampak
Industrial Park. Shareholders are referred to the circular to shareholders
dated 11 April 2009, and are advised that the company acquired the shares in
Morgan Creek on 31 December 2008 as reflected on the share certificate. The
property is owned and controlled by the company, and the rental therefore
accrued to the group from 01 January 2009.
It should be noted that the shares in Morgan Creek are pledged to the vendor of
Morgan Creek in transferable form as the bond holder elected to retain the
personal surety provided by the vendor in respect of the existing bond and the
vendor accordingly required security in respect of the payment of the bond.
This pledge of shares does not affect the ownership or rental stream of the
group and the bond payments are up to date.
5. Sharemax acquisitions
Shareholders are referred to the cautionary announcement dated 31 August 2010,
and are advised that Bonatla is still in the process of trying to finalise this
transaction and a more detailed announcement will be made in due course as the
Sharemax companies are subject to a SA Reserve Bank investigation. The Villa and
the Zambezi Mall acquisitions have been terminated by Bonatla as announced on
SENS on 14 September 2010.
6. Ruitersvlei Wine Estate ("Ruitersvlei"), Erf 109 Illovo and the Kimberley
Diamond and Jewellery Hub acquisition from 10 West Investments (Pty) Limited
("Kimberley Hub") (announced in 27 January 2010, 10 March 2010, 14 April 2010,
28 May 2010, 12 July 2010 and 23 August 2010)
The Ruitersvlei and Erf 109 Illovo transactions will be included in the
circular, presently being prepared.
The delay in the Ruitersvlei transaction is due to the sub-divisions taking far
longer than anticipated. However, this has now been resolved and details will
be included in the circular to shareholders. Pro forma financial effects will
be announced in due course.
The delay in the Erf 109 Illovo transaction is due to the vendor changing its
requirements from the sale of the company to a sale of the actual property. A
new agreement at the same price of R86 million and same payment terms comprising
5 000 000 new Bonatla ordinary shares at an issue price approximating the net
asset value per share of Bonatla at the date of general meeting to approve the
acquisition, 21 000 000 preference shares at R1 per share and R60 million in
cash, has now been signed on 29 October 2010 and details will be included in the
circular to shareholders. Pro forma financial effects will be announced in due
course.
The delay in the Kimberley Hub transaction is due to the change in the Director
General with whom Bonatla signed the agreement and the deal having to be re-
negotiated with his successor. These negotiations have recommenced and further
announcement will be made in due course.
7. Bluezone Properties
Shareholders are referred to the announcement dated 26 October 2010, wherein it
was confirmed that the necessary CM18`s (Order of Court Registration) with
regard to the 9 Bluezone Property companies had been registered with CIPRO on 22
October 2010. The company has signed pledge and cession agreements with each of
the nine property owning companies, giving Bonatla immediate effective control
of these properties and the corresponding rental income stream from 1 April
2010.
The details of the 9 Blue Zone properties are summarised below. Names of
certain of the property companies have been changed to reflect the name of the
underlying property as indicated:
Name of Property Gross Purchase Borrowings Net Purchase
Price R Price
R R
Milestone Place 9 680 000 - 9 680 000
Route 21
Property 259 15 000 000 - 15 000 000
The Heights - 46 286 000 - 46 286 000
Tshwane University
Africard Building 18 000 000 - 18 000 000
Prospect Close 42 300 000 - 42 300 000
Celtis Plaza 32 000 000 14 863 078 17 136 922
Chambers Ground 12 000 000 4 132 385 7 867 615
Floor Block E
Bishops Court 22 000 000 8 378 243 13 621 757
Sections 3-8
Chambers 2 & 3 25 200 000 11 121 742 14 078 258
Total 222 446 000 38 495 448 183 950 552
The net purchase price (after borrowings) of R183 950 552 is to be settled
through the issue of new Bonatla shares at an issue price based on the lower of
75 cents or the net asset value at the time of shareholder approval of the
circular detailing these acquisition, as well as the issue of preference shares,
all of which will be included in the forthcoming circular to shareholders. In
accordance with the JSE Listings Requirements an independent valuation of the
above properties will be contained in the said circular.
Bonatla is still pursuing 3 of the 4 remaining 13 properties and is finalising
negotiations with the provisional judicial managers to pursue shareholder
meetings and a s311 process to facilitate the acquisition of 3 remaining
properties, known as Flextronics, Austin Crossing and Madeleine Street, with a
combined value of approximately R85 million. This will follow the same process
as the other 9 Blue Zone properties. Bonatla has secured the necessary director
and shareholder support from the relevant parties. The last property will not
be acquired as the property holding company has gone into final liquidation.
8. Mhinga Valley Reserve and Vutomi Family Trust
We confirm that the Mhinga Valley Reserve and Vutomi Family Trust deal has been
cancelled as announced on SENS on 1 October 2010 in terms of unsatisfactory due
diligence.
9. Further information
Because of the delays in the finalisation of the first circular dated 11 April
2009 and then the need to do a second circular dated 24 July 2009, (which
included the original forecast for 12 months), the company did not meet the 2009
forecast as the resumption in trading of the ordinary shares of Bonatla only
occurred on 17 August 2009. Thus the first full year of operations pursuant to
the acquisitions will be the financial year ending 31 December 2010. The
forecast in respect of the year ended 31 December 2009 was not achieved as such
forecast was based on the assumption that the suspension would be lifted at an
earlier date than what was achieved, being 17 August 2009. The lifting of the
suspension was a suspensive condition for the implementation of the acquisitions
detailed in the two circulars issued during 2009, and accordingly the
acquisitions could only be implemented at a later date. The assumptions used in
the forecast contained in the circulars issued during 2009 assumed 9 months of
rental from Karbotek which was not received due to the delay in the lifting of
the suspension.
In summary, the forecast was not met due primarily due to the following reasons:
* the delayed acquisition of Karbotek, which was included in the profit
forecast for a period of 9 months at a net rental of R600 000 per month.
* the delayed acquisition of the Durban Point Development assets, which
acquisition is still underway pending the resolution of the EIA process;
and
* additional costs that were incurred in issuing a second circular pursuant
to the change in the structure of the acquisition of the DPDC assets, which
second circular incorporated a rental guarantee and which circular caused
the delay in the lifting of the suspension of the company referred to
earlier.
At the date of this announcement, Bonatla owns the following properties:
Description Status Other comments
Approved by shareholders
Umsuluzi Owned by way of 99 year Approved by
lease. No borrowings shareholders as part
or obligations to third of the circular dated
parties can be incurred 11 April 2009
against the property
until the notarial
registration of the
lease
Amahlubi Owned by way of 99 year Approved by
lease. No borrowings shareholders as part
or obligations to third of the circular dated
parties can be incurred 11 April 2009
against the property
until the notarial
registration of the
lease
Karbotek Owned through Carbon Approved by
Processing and shareholders as part
Technology (Pty) Ltd, a of the circular dated
wholly-owned subsidiary 11 April 2009
of Cambridge Park Mall
(Pty) Ltd, which is
wholly owned by Bonatla
Morgan Creek Owned through wholly Approved by
owned subsidiary Morgan shareholders as part
Creek Ten Properties of the circular dated
(Pty) Ltd 11 April 2009
DPDC bulk Not yet owned or Acquisition approved
transferred by shareholders as
part of the circulars
dated 11 April 2009
and 24 July 2009.
The acquisition is
pending resolution
EIA objection
process. Once
acquired, payment
will be settled
through the issue of
preference shares
Still subject to shareholder approval (but beneficial ownership
already secured)
9 Blue Zone Owned and transferred Circular for
properties per court sanction and shareholder
CM18, with irrevocable ratification in
undertakings to approve process of being
the acquisition in prepared although
place sufficient
irrevocables are in
place to ensure
shareholder approval
The Ruitersvlei and Erf 109 Illovo acquisitions will be included in the upcoming
circular to shareholders as well as the 12 Blue Zone property acquisitions, 3 of
which will involve conditions precedent as detailed earlier.
The following transactions are at an early stage of negotiation or
renegotiation, will not be included in the upcoming circular and will be subject
to further announcement in due course:
* The Kimberley Hub acquisition has to be renegotiated;
* The potential acquisition of certain Sharemax associated companies is
expected to be protracted and contested due to the SA Reserve Bank
investigation into Sharemax, despite initial agreements being signed;
The company has given consideration to the publication of a revised forecast,
but decided that the revised forecast would be included in the circular,
presently being prepared and anticipated to be finalised by the end of the year.
The BEE transaction, which was announced as a separate cautionary announcement,
is at an early stage and is still being negotiated and the other associated
transactions, which may include further property transactions, are also still in
progress. No agreements have yet been signed in this regard. The company has
issued a separate cautionary in this regard in order to distinguish this
transaction from the other acquisitions. Once a transaction has been finalised,
the company will make a further announcement.
The company has renewed its cautionary announcement in relation to the above
transactions on 15 November 2010. The company will be issuing a new profit
forecast in the circular to shareholders, which is currently being prepared.
Houghton
4 January 2011
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
Date: 04/01/2011 16:44:01 Produced by the JSE SENS Department.
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