| Mon 19 Dec 2011, 17:00 | | QHL - Queensgate Hotels And Leisure Limited - Disposal of Queensgate |
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QHL
QHL
QHL - Queensgate Hotels And Leisure Limited - Disposal of Queensgate
Leisure Holdings Proprietary Limited and renewal of cautionary announcement
QUEENSGATE HOTELS AND LEISURE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
Share code: QHL ISIN Code: ZAE000113718
("Queensgate" or "the company")
DISPOSAL OF QUEENSGATE LEISURE HOLDINGS PROPRIETARY LIMITED AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the Company has disposed of its shares in,
and loan account claims against, Queensgate Leisure Holdings Proprietary
Limited and its subsidiaries ("QLH"), for a sale consideration of R468
(being the par value of the shares acquired), in cash to Elatiscan
Proprietary Limited ("Elatiscan"), which is a company held 70% by
Mvelaphanda Holdings Proprietary Limited ("Mvelaphanda") and 30% by
Investec Bank Limited. Mvelaphanda is a related party to Queensgate. The
original agreement was signed on 08 October 2010 and was extended in terms
of addenda dated 11 January 2011 and 10 June 2011. The disposal will be
with immediate effect.
The directors of the Company believe that the disposal is in the best
interests of the Company as the investment in QLH was previously impaired
in full in the Company`s results published for the period ended 28 February
2010 and there were no refinancing options available to the group.
However, the continued holding of shares in QLH has prevented the company
from progressing in certain other transactions due to the large liabilities
in QLH. QLH was placed into provisional liquidation during 2009 and was
facing final liquidation, which was averted by Elatiscan undertaking a
Section 311 process under the previous Companies Act, 1973, as amended, in
order to seek to recover a portion of the liabilities due to them. The
retention of QLH holds no further prospects for Queensgate nor its
shareholders and the disposal thereof will remove the major portion of the
group`s liabilities.
The value of QLH is negative and the disposal consideration of R468 was
determined based on the par value of the shares held. The JSE has been
provided with the statement of the liquidators in this regard. The Section
311 process was finalised and Elatiscan is the only remaining creditor in
QLH. It will be seeking to dispose of the underlying assets in QLH in
order to recover a portion of its loans. Given the above, the JSE will be
considering the termination of the Company in due course.
An extract of the impact of the disposal as detailed in the results
announcement for the six months ended 28 February 2010 is set out below:
ASSETS R
Available for sale assets 116 549
Assets of subsidiary in liquidation 32 710
Surplus on liquidation of subsidiary 83 839
LIABILITIES
Available for sale liabilities 108 327
Liabilities of subsidiary in provisional 108 327
liquidation
The pro forma financial effects of the disposal on the last published
results is set out below:
Per share information
Pro forma Published %
28 February 28 February Change
2010 2010
Before After
Net asset/(liability) -4.68 -0.04 99.10%
value per share (cents)
Net tangible -4.68 -0.04 99.10%
asset/(liability) value
per share (cents)
Shares in issue at 1 1 0.00%
period end (`000) 809 045 809 045
Attributable loss per -23.18 -18.54 20.00%
share (cents)
Headline loss per share -5.14 -5.14 0.00%
(cents)
Weighted average shares 1 1 0.00%
in issue (000`s) 809 045 809 045
Assumptions
1. The published "After" numbers have been extracted from the last
published results of the Company for the six months ended 28 February
2010.
2. The pro forma "Before" column has been adjusted to show the effect of
the following:
- for the statement of financial position purposes the gain on
liquidation on subsidiaries of R83m has reduced assets held for
resale and reduced retained earnings as though the gain had not
been recognised.
- for the statement comprehensive purposes the impairments losses
were increased by R83m to remove the effect of the gain
recognised on liquidation.
3. The impact of the sale of shares is the same as the impact on the
liquidation of the subsidiary grouping.
4. The proceeds of R438 have been set off the investment in subsidiary
and has no impact on the NAV, NTAV, EPS or HEPS calculations.
The disposal consideration of R438 is considered fair by the directors,
based on the liquidators` statement dated 13 April 2010 and the fairness
opinion as detailed below.
The gain recognised on liquidation in the February 2010 results amounted to
approximately R83.8 million. In addition, the consideration and disposal
is not categorised as either a Category One transaction and shareholder
approval for a related party transaction would not be required in terms of
the Alternative Exchange Listings requirements. However, due to the
unusual nature of the transaction and the consideration, the JSE was
consulted in terms of categorisation. An independent fairness opinion on
the disposal of QLH has been obtained from BDO Corporate Finance
(Proprietary) Limited, which opinion was found to be fair. A copy of the
fairness opinion will be available for inspection at the registered office
of the company for 28 days after this announcement.
The continued future prospects of the group are dependent on the injection
of new assets and/or cash. The board of the Company has recently been
restructured and a new Chief Executive Officer and Financial Director have
been appointed. The new executives are busy with regularising the Company
with regard to compliance and other matters, which include finalising the
results and audits of the Company for the year ended 31 August 2011. The
company is currently in negotiations for the injection of new assets, which
will constitute a reverse listing in terms of the JSE Listings
Requirements, which assets must be suitable for a new listing and approved
by the JSE. A working capital statement will be made as part of the JSE
Listings Requirements for a reverse listing.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the company is still in negotiations as
detailed above and so should continue to exercise caution when dealing in
their securities.
By order of the board
19 December 2011
Designated Advisor
Arcay Moela Sponsors
Date: 19/12/2011 17:00:01 Produced by the JSE SENS Department.
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