| Tue 10 Dec 2002, 14:50 | | Fairvest Property Holdings Limited - Announcement |
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Fairvest Property Holdings Limited - Announcement
Fairvest Property Holdings Limited
(formerly Glocash Investments Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/005011/06: JSE code: FVT: ISIN: ZAE 000034658)
("Fairvest" or "the company")
- ANNOUNCEMENT CONCERNING:
- PROGRESS ON THE ACQUISITION OF A PORTFOLIO OF PROPERTIES;
- EXERCISE OF THE PUT OPTIONS;
- INTEREST ON THE DEBENTURES;
- INFORMATION ON CERTAIN OF THE COMPANY`S PROPERTIES;
- PROFIT WARNING; AND
- RESUMPTION OF TRADE AND RENEWAL OF THE CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Further to the announcement dated 12 November 2002, concerning the proposed
acquisition of a portfolio of properties with a value of R420 million ("the
acquisition"), the disposal of certain properties ("the disposal") and the
renewal of the cautionary announcement, the following further information is
now available.
2. THE ACQUISITION
The company is making good progress with the implementation of the
acquisition and specifically can report the following:
- the due diligence exercise is substantially complete, subject to the
completion of the audit and the valuation of the properties concerned, most
of which have now been valued;
- approximately 40% of the loan funding has been arranged and
arrangements for the balance are at an advanced stage of negotiation;
- the disposal agreement in respect of the R77.9 million of property
that the company wishes to sell has been signed and the funding has been
arranged. The disposal is now subject only to unitholder and regulatory
approvals
- the regulatory approvals required for the acquisition are currently in
progress;
- the financial effects of the acquisition and the disposal can only be
calculated once the results for the year to 30 September 2002 are available
and will be published with the preliminary results announcement referred to
in paragraph 4 of this announcement; and
- the circular to unitholders concerning the acquisition is in the
course of preparation and will be sent to unitholders as soon as it is
complete.
3. EXERCISE OF THE PUT OPTIONS
Unitholders were informed in the circular to Glocash Investments Limited
unitholders dated 16 November 2001 ("the Glocash circular") concerning, inter
alia, the acquisition of the current portfolio and the conversion of the
company into a loan stock company that Glocash unitholders enjoyed certain
rights in terms of a put option ("the put option"). The put option was
exercisable by 30 November 2002, subject to adherence to certain procedures
and agreement to certain conditions that were set out in the Glocash
circular. In the event, unitholders exercised put options over substantially
more units than could possibly have been the subject of the option. In many
cases the options have not been exercised in the prescribed manner to
constitute an acceptance of the put, a process that was worsened by a
purported offer to buy up to 51% of the issued units, incorrectly alleged to
originate from a consortium headed by the company`s Chief Executive Officer,
Mr Niki Vontas, that was disseminated incorrectly by a third party. Given
the preponderance of holdings in nominee companies or by Central Share
Depositary Participants and the terms of the put option, which precluded
unitholders who were eligible to exercise their options from selling any of
their units during the currency of the option, it has proved very difficult
to determine which of the units tendered, purportedly in terms of the option,
have been correctly tendered and which have not.
It is expected that it will take some weeks to establish which of the
tendered units have been correctly tendered and it is only then that the
company will be in a position to advise unit holders of its intended course
of action. The company has taken legal advice in respect of the validity of
the purported exercise of the option by certain categories of unitholder and
further advice will be taken in the interests of unitholders before a
decision is made on the treatment of those options which have been exercised
in a defective manner. Those units that have already been established as
being correctly tendered will be paid for on 12 December 2002. The number of
units for which the option has been correctly exercised appears to be 76 321.
The company has confirmed that it has the cash available to meet this
payment. The proposed course of action to be followed in respect of the
balance of the units submitted will be communicated to unitholders as soon as
clarity has been achieved. In the meantime, unitholders are advised to
contact +27 11 884 9089 if they require to know if their options have been
validly exercised.
4. RESULTS FOR THE YEAR TO 30 SEPTEMBER 2002
Publication of the results for the year to 30 September 2002 has been delayed
pending, inter alia, the final determination of the company`s obligations in
terms of the put option and bythe matters referred to in paragraph 6. It is
expected that the preliminary results will be published, in compliance with
the Listings Requirements of the JSE Securities Exchange South Africa
("JSE"), by the end of December 2002.
5. DECLARATION OF PAYMENT ON THE LINKED UNITS
In terms of the trust deed governing the debentures issued as part of the
linked units, interest should be paid within two months of the end of the
relevant accounting period. As it has not been possible to finalise the
accounts for the reasons enumerated in paragraph 4. above, the company has
not been in a position to declare the interest payment. The declaration will
be made as soon as the results are available for publication. It has become
apparent that the terms of the declaration of interest on the debentures are
unworkable and unitholders will be asked at the next general meeting to
approve a resolution amending the terms so as to facilitate adherence
thereto. The trustee of the debenture trust deed has formally placed the
company on terms in respect of the payment of interest, but it is expected
that the company will be in a position to declare such payment during the
notice period.
6. INFORMATION ON CERTAIN OF THE COMPANY`S PROPERTIES AND PROFIT WARNING
The Glocash circular contained details of the properties acquired by the
company. It has become apparent that certain of this information relating to
certain leases and rentals on certain properties was incorrect and the
company is investigating ways in which the situation can be redressed for the
benefit of unitholders. The disposal of properties referred to in the
announcement dated 12 November 2002 indicated the company`s intentions to
rationalise certain affected property holdings. Further details will be
communicated to unitholders once [deletion] this process has been completed.
Unitholders were advised in the interim report for the six months to 31 March
2002 that certain properties were performing unsatisfactorily. This is
coupled to the incorrect information referred to in this paragraph and it has
become clear that the company`s profits have been significantly adversely
affected by this development. Unitholders will be given updated information
on the properties concerned and the effect on the company once this is
available.
7. RESUMPTION OF TRADE AND RENEWAL OF CAUTIONARY
The JSE has agreed to lift the trading halt. In view of the uncertainties
that remain concerning the put option, certain of the assets of the company,
the financial effects of the acquisition and the negotiations with Bonatla
Property Holdings Limited announced on 22 November 2002, unitholders are
advised to continue to exercise caution when dealing in the company`s units.
Sandown
10 December 2002
Sponsor Attorneys
LPC Manhattan Sponsors Moss Morris
Date: 10/12/2002 02:47:21 PM Produced by the JSE SENS Department
