| Mon 25 Jul 2011, 17:45 | | JCD - JCI Limited - Announcement relating to the disposal |
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JCD KRHT
JCD
JCD - JCI Limited - Announcement relating to the disposal
JCI LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1894/00854/06
Share code: JCD
ISIN: ZAE0000039681 (Suspended)
("JCI" or "the Company")
Announcement relating to the disposal of all shares and claims in Boschendal
(Pty) Limited ("Boschendal") by JCI Investment Finance (Pty) Limited ("JCIIF"),
a 100% owned subsidiary of JCI and a 62.67% shareholder in Boschendal, to
Cinmark Twenty Seven (Pty) Limited ("Cinmark" or "the Purchaser") and a further
cautionary announcement.
1. INTRODUCTION
JCI is pleased to announce that it has signed a sale of shares agreement with
Cinmark, in terms of which Cinmark will acquire, as one indivisible transaction,
all the shares and claims, including shareholder loan accounts, in Boschendal
("the Transaction") from JCIIF and IFA Boschendal Investments (Pty) Limited
("IFA") (collectively "the Sellers").
The Transaction is subject to the conditions precedent outlined in paragraph 2.4
below, which includes the requirement that the Purchaser furnish a bank
guarantee ("the Bank Guarantee") to the Sellers for a total amount of R700
million by no later than 27 July 2011.
The amount of R700 million will be distributed as set out in 2.3 below.
2. THE TRANSACTION
2.1 DESCRIPTION OF BUSINESS TO BE ACQUIRED
Boschendal is one of the oldest wine farms in South Africa with a French
viticultural heritage dating back to 1685. Boschendal is set on a 2,240 hectare
estate between Stellenbosch and Franschhoek in the Western Cape, and consists of
vineyards which cover an area of 254 hectares, extending for six kilometres
along the slopes of the Groot Drakenstein Mountain towards the Dwarsriver and
the slopes of the Simonsberg Mountain.
Boschendal is currently the site of a proposed mixed-use development.
2.2 RATIONALE FOR THE TRANSACTION
The Sellers received an unsolicited offer from Cinmark, which JCI has reviewed
and concluded to be an attractive offer and in the best interests of JCI
shareholders.
The JCI board will consider how the proceeds from the Transaction should be
deployed, and will inform shareholders of the proposed use of the funds in due
course.
2.3 PURCHASE CONSIDERATION FOR THE TRANSACTION
The amount payable by the Purchaser of R700 million shall be paid by the
Purchaser to Eversheds attorneys ("the Escrow Attorneys") in terms of the Bank
Guarantee, and will be distributed by the Escrow Attorneys following the
fulfillment of the conditions precedent as follows:
a. To Nedbank an amount of approximately R170 million, which is required to
settle the Nedbank loan in full.
b. To Enhanced Financial Structures (Pty) Limited the sales commission of
R7 million.
c. To the Sellers the balance, being the purchase price of approximately R523
million, as follows:
I. To JCIIF and IFA, the respective amounts owing by Boschendal to
them on the Effective Date in respect of their Boschendal claims.
II. The remaining balance, after settlement of the Boschendal claims,
to JCIIF and IFA for the shares being sold which amount shall be
paid to JCIIF and IFA in proportion to the number of shares being
sold by them as a percentage of the total issued share capital of
Boschendal.
2.4 CONDITIONS PRECEDENT
The Transaction is subject to, inter alia, the fulfillment or waiver of the
following Conditions Precedent:
a. By no later than the close of business on 27 July 2011:
I. The delivery to the Sellers of the Bank Guarantee in respect of the
amount of R700 million;
II Receipt from Nedbank, to the extent necessary, of its written consent to
the Transaction;
III.Delivery by Nedbank to IFA, JCIIF and JCI of a written irrevocable
undertaking that Nedbank will release them from any suretyship or
other security obligations in terms of the Nedbank loan to Boschendal;
and
IV. Delivery by Investec to JCI of a written irrevocable undertaking that
Investec will release JCIIF`s portion of the Boschendal shares which
Investec holds as security and that such portion of the Boschendal
shares shall in no way be encumbered at the closing date of the
Transaction.
b. By no later than the close of business on 30 September 2011
I. Approval by the Competition Authorities, to the extent required;
II.Approval of the Transaction by the JSE Limited ("JSE");
III.The approval of the requisite resolutions by the shareholders of JCI
and JCIIF authorising them, in terms of section 115 of the Companies
Act, to dispose of all or the greater part of their respective assets
or undertakings; and
IV. The approval of the requisite resolutions by the boards of JCI, JCIIF
and IFA which are necessary to implement the Transaction.
2.5 EFFECTIVE DATE
The effective date of the Transaction is the first business day following the
fulfillment or waiver of the last of the conditions precedent.
3. CIRCULAR TO JCI SHAREHOLDERS
In terms of the paragraph 9.5 of the JSE Listings Requirements, the Transaction
is categorised as a Category 1 transaction. Due to the size of the Transaction,
shareholder approval is required and a circular, containing a notice of general
meeting, will be sent to shareholders in due course.
4. FURTHER CAUTIONARY ANNOUNCEMENT
The pro forma financial effects of the Transaction have not yet been finalised.
Shareholders are therefore advised to continue exercising caution when dealing
in the Company`s securities until such information is released.
Shareholders are also referred to the previous cautionary announcement dated 6
July 2011 related to the legal application by Hemispherx Biopharma Incorporated,
which advised shareholders to exercise caution when dealing in the Company`s
securities.
Johannesburg
25 July 2011
Sponsor: Investec Bank Limited
Legal Adviser:Eversheds
Date: 25/07/2011 17:45:01 Produced by the JSE SENS Department.
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