| Mon 25 Jul 2011, 17:53 | | IFH - IFA Hotels & Resorts Limited - Announcement relating to the Disposal of |
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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Announcement relating to the Disposal of
shares
IFA Hotels & Resorts Limited
Registration number 1919/001318/06
Share code: IFH
ISIN: ZAE000075669
("IFA" or "the Company)
Terms announcement relating to the disposal of all shares and claims in
Boschendal (Pty) Limited ("Boschendal") by IFA Boschendal Investments (Pty)
Limited a 100% owned subsidiary of IFA (being a 37.33% beneficial interest) to
Cinmark Twenty Seven (Pty) Limited and a further cautionary announcement
1. INTRODUCTION
IFA is pleased to announce that it has signed a sale of shares agreement with
Cinmark Twenty Seven (Pty) Limited ("Cinmark" or the "Purchaser"), in terms of
which Cinmark will acquire, as one indivisible transaction, all the shares and
claims in Boschendal ("the Transaction") from IFA Boschendal Investments (Pty)
Limited ("IFA Boschendal") and JCI Investment Finance (Pty) Limited ("JCIIF")
(collectively referred to as "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 paragraph 2.3
hereto.
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 IFA has reviewed
and concluded to be an attractive offer and in the best interest of IFA
shareholders.
The IFA Board will carefully consider how the proceeds from the Transaction
should be deployed in order to enhance shareholder value.
2.3 PURCHASE CONSIDERATION FOR THE TRANSACTION
The amount payable by the Purchaser of R700 million shall be paid by the
Purchaser to Eversheds ("the Escrow Attorneys") in terms of the Bank Guarantee,
and will be distributed by the Escrow Attorneys following the fulfilment of the
conditions precedent as follows:
To Nedbank an amount of approximately R170 million, which is required to settle
the Nedbank loan in full.
To Enhanced Financial Structures (Pty) Limited the sales commission of R7
million.
To the Sellers the balance, being the purchase price of approximately R523
million, as follows:
To JCIIF and IFA, the respective amounts owing by Boschendal to them on the
Effective Date in respect of their Boschendal claims.
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 fulfilment or waiver of the
following Conditions Precedent:
By no later than the close of business on 27 July 2011:
The delivery to the Sellers of the Bank Guarantee in respect of the amount of
R700 million;
Receipt from Nedbank, to the extent necessary, of its written consent to the
Transaction;
Delivery by Nedbank to IFA and JCIIF 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
Delivery by Investec to JCIIF 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.
By no later than the close of business on 30 September 2011:
Approval by the Competition Authorities, to the extent required;
Approval of the Transaction by the JSE Limited ("JSE");
The approval of the requisite resolutions by the shareholders of JCI Limited 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
The approval of the requisite resolutions by the boards of JCI Limited, 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
fulfilment or waiver of the last of the conditions precedent.
3. CIRCULAR TO IFA 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.
Zimbali
25 July 2011
Sponsor
QuestCo Sponsors (Pty) Limited
Date: 25/07/2011 17:53:09 Produced by the JSE SENS Department.
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