| Wed 13 Jun 2012, 17:49 | | QPG - Quantum Property Group Limited - Business rescue application and renewal |
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QPG
QPG
QPG - Quantum Property Group Limited - Business rescue application and renewal
of cautionary
QUANTUM PROPERTY GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1984/002788/06)
Share code: QPG ISIN:ZAE000125647
("QPG" or "the Company")
BUSINESS RESCUE APPLICATION AND RENEWAL OF CAUTIONARY
1 Background to the business rescue application and resolution to begin
business rescue proceedings
The board of directors of QPG ("the Board") is of the view that its wholly-
owned subsidiary, A Million Up Investments 105 Proprietary Limited ("AMU"),
is currently financially distressed, as contemplated in Chapter 6 of the
Companies Act, 71 of 2008, as amended ("the Companies Act").
The decision taken by the board of directors of AMU to place AMU under
business rescue is as a consequence of the required payment to Absa Bank
Limited ("ABSA") in the amount of R581 420 062.04. Such amount has been
called up by ABSA in terms of a development bond provided by ABSA to AMU,
which development bond was registered during July 2006, and which AMU is
currently not in a position to repay.
The boards of directors of AMU and QPG ("the Boards") are of the view that
a reasonable prospect to rescue AMU from its current financial difficulties
exist. In addition, the Boards are confident as to the trading performance
and long-term prospects of AMU`s principal asset, being the `15 on Orange`
hotel. Business rescue is being sought principally in relation to
development debt. Based on this view, on Monday, 4 June 2012 the board of
AMU resolved that business rescue proceedings commence, and that AMU be
placed under supervision in terms of Section 129 of the Companies Act ("the
Resolution"). The Boards believe that the implementation of business rescue
proceedings will afford the executive directors of AMU the opportunity to
develop and implement a business rescue plan in a manner that will optimise
the likelihood of AMU continuing in existence as a going concern.
2 Filing of the Resolution
The Resolution was filed with the Companies and Intellectual Property
Commission ("CIPC") on Wednesday, 6 June 2012 and the effective date of
commencement of the business rescue proceedings is confirmed as Wednesday,
6 June 2012, in accordance with Section 132(1)(a)(i) of the Companies Act.
3 Application initiated by ABSA
An application which has been initiated by ABSA, will be heard in the
Western Cape High Court, to set aside the resolution taken by the board of
AMU, to voluntarily commence business rescue proceedings and to place AMU
under supervision, thus declaring such resolution to be of no force or
effect ("Application"). The board of AMU intends to oppose the Application.
The Application is expected to be heard on Friday, 15 June 2012.
If the Application is successful, AMU will be discharged from business
rescue. If the Application is unsuccessful, the business rescue of AMU will
continue. The Boards are of the view that a reasonable prospect to rescue
AMU exists, and that AMU can be restored to a position where it can trade
on a successful basis.
4 Notice of the Resolution
AMU is in the process of giving notice of the Resolution, in the prescribed
manner, to all affected persons ("Notice"). In terms of Section 129(3)(a)
of the Companies Act, such Notice includes copies of the Resolution and a
sworn statement of facts relevant to the grounds upon which the Resolution
was founded.
5 Renewal of cautionary announcement
Subsequent to the cautionary announcement released on SENS on 25 May 2012,
shareholders are advised to continue to exercise caution when dealing in
the Company`s securities until further information regarding the
aforementioned matters is provided.
Sandton
13 June 2012
Designated Adviser
Merchantec Capital
Date: 13/06/2012 17:49:02 Produced by the JSE SENS Department.
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