| Thu 6 Jan 2011, 11:03 | | JCD - JCI Limited - Loan Funding Provided by Investec Bank Limited (Investec) |
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JCD KRHT
JCD
JCD - JCI Limited - Loan Funding Provided by Investec Bank Limited ("Investec")
in terms of Schedule 13 of The JSE Listings Requirements
JCI LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1894/00854/06
Share code: JCD ISIN: ZAE0000039681 (Suspended)
("JCI" or "the Group")
LOAN FUNDING PROVIDED BY INVESTEC BANK LIMITED ("INVESTEC") IN TERMS OF SCHEDULE
13 OF THE JSE LISTINGS REQUIREMENTS
Introduction
JCI Limited requires cash urgently in order to meet outstanding liabilities and
ongoing operating costs, including salaries and wages. However, JCI does not
currently have cash resources available to meet its obligations and has no
operating business which will generate the required funding. In addition, the
major part of JCI`s present NAV consists of illiquid assets (a 62.7% investment
in Boschendal Limited and preference shares in Xelewa (Proprietary) Limited
(previously Jaganda Trading (Proprietary) Limited) which is currently the
subject of a legal dispute) which will not provide the necessary cash flow in
the short term.
The board of directors of JCI ("JCI Board") believe that the only alternative in
the circumstances is to obtain further loan funding from Investec in order to
fund JCI`s near term cash requirements.
The JSE Limited ("JSE") has indicated that it views the taking of security as a
disposal and therefore a related party transaction because Investec is a
material shareholder of JCI. As a result, and in order to secure JSE approval,
JCI has submitted an application in terms of Schedule 13 of the Listings
Requirements for dispensation from the related party provisions which may be
applicable to the Investec loan funding.
Terms of the Investec loan funding
Investec has agreed to provide R8 million of loan funding to JCI on or about 6
January 2011 which will be secured by the Group`s investment in Boschendal
Limited and the Group`s shareholder loans to Boschendal Limited. The loan will
bear interest at Prime and has a term of 3 months from the date of advance.
Views of the JCI Board
The JCI Board believe that the additional loan funding from Investec is in the
best interests of the company and shareholders as a whole and that if it is not
completed, JCI will not have sufficient cash to meet its financial obligations
in the near term.
Pro forma financial effects on JCI shareholders
The pro forma financial effects of the additional Investec loan funding on JCI`s
net asset value per share and net tangible asset value per share are not
material.
Confirmations provided to the JSE
In accordance with the requirements of Schedule 13, JCI has provided the JSE
with the following confirmations:
1 Confirmation from the JCI Board that:
* JCI`s cash requirements do not allow time for shareholder approval;
* The additional Investec loan funding is the only available option in the
current circumstances; and
* The directors of JCI are acting in the best interests of the company and
shareholders as a whole and that if the additional Investec funding is not
obtained, JCI will not have sufficient cash to meet its financial
obligations in the near term.
2 Confirmation from JCI`s sponsor that, in its opinion and on the basis of
information available to it, JCI will not be able to meet its financial
obligations in the near term.
3 Confirmation from Investec that it would not loan additional funding to JCI
unless it received adequate security for the additional funding.
4 Confirmation that the SRP has been consulted.
Prospects and working capital
JCI`s main asset is its investment in Boschendal which is an iconic South
African property development situated near Stellenbosch in the Western Cape.
While Boschendal`s property development is in the early stages of development
and will not generate cash flow in the near term, the JCI Board are confident of
the long term value of Boschendal and are currently exploring alternatives for
Boschendal`s development and financing in order to maximise value for
shareholders.
The legal dispute regarding JCI`s investment in Xelewa (Proprietary) Limited is
due to be heard in court in early 2011 and the JCI Board is confident of the
merits of its case.
As mentioned previously, JCI has no operational cash flows and does not have
sufficient cash available for the Group`s present requirements. However, the JCI
Board believes that its current financiers will extend the approximately R30
million of additional funding which will be required in the short term based on
JCI`s detailed cash budgets.
Sandton
6 January 2011
Sponsor: Investec Bank Limited
Date: 06/01/2011 11:03:02 Produced by the JSE SENS Department.
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