| Tue 13 Mar 2012, 16:02 | | DEC - Decillion Limited - Detailed cautionary announcement regarding amended |
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DEC
DEC
DEC - Decillion Limited - Detailed cautionary announcement regarding amended
terms of the acquisition by Decillion and further cautionary announcement
Decillion Limited
(Registration number: 1998/011692/06)
(Incorporated in the Republic of South Africa)
JSE code: DEC & ISIN: ZAE000108247
("Decillion" or "the Company")
DETAILED CAUTIONARY ANNOUNCEMENT REGARDING AMENDED TERMS OF THE ACQUISITION
BY DECILLION OF ARDOR PROPERTY HOLDINGS (PTY) LTD ("ARDOR PROPERTY
HOLDINGS"), LASHKA 132 LIMITED ("LASHKA") AND OAKWOOD FOURWAYS DEVELOPMENTS
(PTY) LTD ("OAKWOOD"), THE CAPITALISATION OF RELATED PARTY LOAN, A PROPOSED
SPECIFIC ISSUE OF SHARES FOR CASH AND FURTHER CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Following the detailed cautionary announcements on 3 August 2011 and 16
September 2011 (and renewal of cautionary announcements on 28 October 2011,
13 December 2011 and 27 January 2012), the board of directors advise that,
pursuant to property portfolio changes and receipt of independent property
valuations, new agreements have been negotiated and signed for the
acquisition of 100% of the shares and claims in Ardor Property Holdings,
Lashka and Oakwood. The terms of the various acquisitions are set out below.
Shareholders are advised that, due to the fact that Mr Mark Smith was
appointed to the board pursuant to the signing of the initial Ardor Property
Holdings Memorandum of Understanding and the new acquisition agreements being
signed in March 2012, that all the acquisitions are now considered related
party acquisitions.
ARDOR PROPERTY HOLDINGS ACQUISITION
Decillion has entered into an agreement with Ardor Group (Proprietary)
Limited dated 08 March 2012 to acquire 100% of the shares and claims of Ardor
Property Holdings for a purchase consideration of R92 275 000.00 of which R8
000 000 is payable through the issue of shares at R2.45 and the remaining R84
275 000.00 payable in cash.
The equity portion is subject to the placement price for the ordinary shares
in the Company as per the final approved circular to Decillion shareholders
which circular relates to the acquisition of Ardor, which placement price
will not be less than 250 cents per share. In the event that the placement
price is less than 250 cents, the shares to be issued to Ardor Group will be
issued at the price per share pro rata less than 245 cents per ordinary share
as it relates to the lesser placement price.
At the effective date, being 1 May 2012, Ardor will own or become the owner
of all the shares of the companies holding 100% of the following properties,
known as:
* Dayizenza Shopping Centre (to be completed) ("Dayizenza")
* Furrowlane Hotel and Conference Venue (complete) ("Furrowlane")
* Die Werf (complete, but excluding development rights)("Die Werf")
* Windmill Mall (to be completed)("Windmill")
* Estcourt Retail Mall (to be completed)("Estcourt")
* Raslouw Retail Mall (to be completed) ("Raslouw").
The acquisition is subject to the fulfilment of the following conditions
precedent:
* An amount of R54 875 000 constituting the biggest portion of the first
payment will be used by the Ardor Group to complete the land
acquisitions by Ardor relating to Windmill and Estcourt.
* All current financial facilities, excluding development and related debt
to be incurred in relation to the development of Dayizenza, Die Werf,
Windmill, Estcourt and Raslouw, will be settled or taken over by the
Company as part of the purchase consideration.
* The transaction is subject to approval by the shareholders of Decillion
within 90 days of signing of the agreement.
* Regulatory approval from the JSE and Competitions Commission, if
required.
* Due diligences by each party to be conducted within 10 days of signing
of the agreement.
* The transaction is subject to approval by the shareholders of Ardor
within 14 days of signing of the agreement.
* All existing debts in Decillion will be capitalised and paid or settled
in shares after the approval by Decillion shareholders.
* The release of all current sureties to Absa Bank for the current
exposure of not more than R4 000 000.
The valuation of the property portfolio is R650 950 000, less R4 000 000 debt
and R554 575 000 development cost), which equates to R92 275 000.
LASHKA ACQUISITION
Decillion and Lashka entered into an agreement dated 9 March 2012 with
Sciofin (Proprietary) Limited for the acquisition of 100% of the shares and
claims in Lashka for a purchase consideration of R239 500 000. The purchase
price is payable as follows:
* R26 571 002.50 by the issue of 10 845 307 shares in Decillion at
R2.45 per share; and
* the remaining R212 928 997.50 payable in cash.
Lashka is the owner of the following properties via subsidiaries:
- Bergville Mall (Portion 2 of Erf 45, Bergville, Kwa-Zulu Natal)
- Langverwacht Centre (Erf 12431 Kuils River)
- Jean Village Shopping Centre (Erf 393, Die Hoewes Extension 105,
Centurion)
- Ryneveld Lifestyle Centre (Remaining extent of Erf 1149, Pierre van
Ryneveld extension 2)
- Uitenhage Regional Mall to be developed (Erf 25332, Uitenhage)
Decillion will take over the current bank liabilities to a maximum of R111
000 000.
The Lashka agreement is subject to the fulfilment of the following suspensive
conditions:
* Sufficient cash to be raised by Decillion on or before the
implementation date.
* The completion by Decillion of a due diligence investigation in respect
of Lashka;
* The approval of this acquisition by the shareholders of Decillion before
31 May 2012.
The valuation of the property portfolio is R601 700 000, less R111 000 000
debt and R265 000 000 development cost, which equates to the purchase price
of R239 500 000.
OAKWOOD ACQUISITION
Decillion entered into an agreement dated 9 March 2012 for the acquisition of
100% of the shares and claims in Oakwood by Decillion for a purchase
consideration of R31 300 000 payable in cash. The claims in the Company,
excluding the sale claims, shall not be more than R47 000 000. The vendors
of Oakwood are Real Time Investments (20%), Winkfield (20%), DC Gadney (ID
6112295092089) (20%) and Marble Gold (40%).
The Oakwood acquisition is subject to the fulfilment of the following
suspensive conditions:
* the completion by Decillion of a due diligence investigation in respect
of Oakwood;
* the approval of this acquisition by the shareholders of Decillion before
31 May 2012; and
* sufficient cash being raised by Decillion on or before the
implementation date (date after all suspensive conditions have been
met).
The valuation of the property portfolio is R78 300 000 (less R47 000 000
debt), which equates to the purchase price of R31 300 000.
ARDOR, LASHKA AND OAKWOOD PROPERTY PORTFOLIO
Details on the property portfolio are being finalised and will be announced
in due course. The underlying properties have been independently valued by
an external valuer, namely Quadrant Properties (Proprietary) Limited, which
company is busy finalising its reports for inclusion in the circular to
shareholders.
PROPOSED CAPITALISATION OF RELATED PARTY LOAN
Shareholders will be requested to approve the capitalisation of the related
party loan with Sciofin through the issue of 8 500 000 shares at R1.00 per
share in order to further strengthen the balance sheet of Decillion.
PROPOSED SPECIFIC ISSUE OF SHARES FOR CASH AND PROPOSED WAIVER OF AN OFFER
It is the intention of the company to issue up to 320 000 000 new shares in
Decillion at R2.50 in order to raise up to R900 000 000 to facilitate the
above acquisitions as well as the development of the retail centres acquired
as part of the acquisitions. The minimum capital to be raised has been set
at R330 000 000. Due to the wide range of possible outcomes for new
investors, shareholders will be asked to waive a mandatory offer in the event
that any new investor or investors acquire 35% or more pursuant to the
specific offer. In the event that shareholders do not waive the mandatory
offer, then the new investors will be offered the opportunity to reduce their
subscription for shares in Decillion.
RESPONSIBILITY STATEMENT
The board of directors accepts responsibility for the information in relation
to the proposed waiver of an offer and, that to the best of their respective
knowledge and belief, the information is true and does not omit anything
likely to affect the importance of the information.
REVERSE TAKEOVER
Shareholders are cautioned that the implementation of the proposed
acquisition and specific issue of shares for cash will result in the issue of
more than 100% of the current issued share capital of the Company, and
accordingly will result in a reverse takeover of Decillion for the purposes
of the Listings Requirements, which stipulate that the Company can only
retain its listing following the reverse take-over if the JSE is satisfied
that the Company continues to qualify to be listed.
The listing on the Main Board is conditional on the Company maintaining the
said shareholder spread requirements.
PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS AND PROFIT FORECAST
The pro forma financial effects and profit forecast are in the process of
being finalised and will be published in due course.
DOCUMENTATION AND SALIENT DATES
A circular to shareholders detailing the terms of the acquisitions, the
capitalisation of related party loans, specific issue of shares for cash,
reverse takeover, and other associated transactions, incorporating revised
listing particulars is being drafted and will be distributed to shareholders
in due course.
Salient dates shall also be announced in due course.
FURTHER CAUTIONARY ANNOUNCEMENT
Since the property portfolio information and pro forma financial effects of
the above-mentioned acquisitions, specific issue of shares for cash and
associated transactions have not yet been published, shareholders are advised
to continue exercising caution when dealing in the Company`s securities until
a full announcement is made.
JOHANNESBURG
13 March 2012
SPONSOR
Arcay Moela Sponsors (Proprietary) Limited
Date: 13/03/2012 16:02:22 Produced by the JSE SENS Department.
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