| Tue 21 Jan 2003, 16:48 | | IPROP HOLDINGS LIMITED - ANNOUNCEMENT |
|
iProp Holdings Limited
(Formerly RMP Properties Limited)
Incorporated in the Republic of South Africa
(Registration number 1968/001239/06)
Share code: IPR ISIN: ZAE 000018867
("iProp" or "the company")
The disposal by iProp of all of its assets and liabilities to management and the
delisting and voluntary winding-up of the company
1. Introduction
Further to the cautionary announcement included with the annual results
announcement published on 2 December 2002, the board of directors of iProp
wishes to announce that it received an offer yesterday, the implementation of
which would result in the disposal of all of the assets and liabilities of
iProp, as a going concern, to Clidet No 433 (Pty) Limited ("Clidet") subject to
the fulfillment of certain conditions precedent ("the disposal"). Clidet is a
company owned and controlled by members of the iProp executive management team
("management").
2. Terms of the disposal
2.1 The disposal consideration and the subsequent distribution to shareholders
The nett disposal consideration amounts to R83.9 million ("the consideration"),
which equates to 500 cents per iProp share on a fully diluted basis.
The consideration is to be distributed to iProp shareholders by way of a
reduction of capital, in an amount of 109.3 cents per share, and the payment of
a liquidation dividend, in an amount of 390.7 cents per share, upon fulfillment
of the conditions precedent set out below ("the distribution").
2.2 Mechanism of the disposal
The disposal will be undertaken in terms of section 228 of the Companies Act,
1973 (Act 61 of 1973), as amended ("the Act").
2.3 Nature of assets and liabilities
All the assets and liabilities (including known, contingent and unknown
liabilities) of the company will be disposed of to and assumed by Clidet as a
going concern.
2.4 Effective date and implementation date
The effective date of the disposal is 1 0ctober 2002.
The disposal will be implemented 5 days after fulfillment or waiver of the last
of the conditions precedent.
2.5 Management
Management comprises:
- Ms Petro Heydenrych, the Managing Director of iProp;
- Mr Richard Bennet, the Marketing Director of iProp Limited (a wholly owned
subsidiary of iProp) ("iProp Limited");
- Ms Coleen du Preez, the Financial Director of iProp Limited; and
- Mr John Martin, the Development Manager of iProp Limited.
Ms Heydenrych, Mr Bennet, Ms du Preez and Mr Martin respectively hold 118 000,
34 000, 3 000, and 37 000 shares in terms of the iProp Share Purchase Scheme.
3. Background
iProp was formed 35 years ago and its operations have always been complicated,
given the ingredients of mining assets, gold recovery, land rehabilitation, land
development and property investment.
Over the past six years, a process of unbundling and disposals of assets has
taken place to the considerable advantage of shareholders:
* in 1997, the land clearing and gold recovery operations were disposed of to
Crown Consolidated Gold Recoveries Limited;
* in 1998, Barprop Limited was unbundled; and
* in 2002, the major portion of the investment property portfolio was sold to
iFour Properties Limited ("iFour") as described in a circular to shareholders
dated 9 May 2002 ("the iFour transaction").
4. Rationale for the disposal
As it exists today, iProp is a small company trading at a deep discount to its
net asset value and is illiquid. The offer from Clidet represents:
* a 75% premium to the average closing iProp share price on 18 October 2002
(being the date of publication of the first cautionary announcement) and a 64%
premium to the average closing iProp share price from 12 June 2002 to 20 January
2003 (being the period subsequent to the iFour transaction); and
* a discount of 54% to the net asset value of the company, which represents a
32% reduction in the historical discount to the company`s net asset value.
5. The winding-up of iProp
Subject to the approval of iProp shareholders and subsequent to the
implementation of the disposal and the reduction of capital, the board intends
to delist iProp from the JSE Securities Exchange South Africa ("JSE") and
voluntarily wind it up (`the winding-up").
6. Financial effects
The financial effects of the implementation of the disposal and the distribution
are set out below. The figures are based on the audited results of iProp for the
year ended 30 September 2002.
Effect on a
shareholder of
the implementation
of the disposal
Prior to the and the %
(cents) disposal the distribution change
Market value at 18 285 1 500 75
October 2002
Market value at 20 380 2 500 32
January 2003
Earnings per share 26 3 33 4,6 27
("EPS") for the year
ended 30 September
2002
Headline earnings per 26 3 33 4,6 27
share ("HEPS") for the
year ended
30 September 2002
Fully diluted earnings 26 3 33 4,6 27
per share ("FDEPS")
for the year ended
30 September 2002 8
Net asset value 1 079 3 500 5 (54)
("NAV") per share at
30 September 2002
Net tangible asset 1 079 3 500 5 (54)
value ("NTAV") per
share at 30 September
2002
Number of shares in 16 321 600 7 16 538 600 8
issue
Notes:
1. The closing market price of an iProp share on 18 October 2002, the last
business day prior to the publication of the cautionary announcement.
2. The closing market price of an iProp share on 20 January 2003, the last
business day prior to the publication of this announcement.
3. Audited figures as extracted from iProp`s audited results announcement for
the year ended 30 September 2002.
4. The disposal and the distribution were assumed to be effected
simultaneously on 1 October 2001 when calculating the EPS, HEPS and FDEPS effect
on a shareholder.
5. The disposal and the distribution were assumed to be effected
simultaneously on 30 September 2002 when calculating the NAV and NTAV effect on
a shareholder.
6. The 500 cents per share received in terms of the distribution was assumed
to be invested at a 9.5% annual rate of interest and reduced by a 30% corporate
tax rate.
7. The number of shares in issue at 30 September 2002.
8. The fully diluted number of shares was taken as 16 538 600 which assumes
all the iProp share scheme options with an exercise price of less than 500 cents
are exercised.
9. No account has been taken of the effect of any Capital Gains Tax payable in
the shareholders` hands.
10. Secondary Tax on Companies payable in respect of the liquidation dividend
has been taken into account.
7. Conditions precedent
The disposal, the distribution and the winding-up are subject to, inter alia:
* the approval by iProp shareholders of all requisite resolutions in the
general meeting. (In terms of the rules of the Securities Regulation Panel
("SRP") and the JSE, management shall be precluded from voting on the section
228 resolution concerning the disposal and shall not be counted in determining a
quorum);
* the requisite approvals of the JSE, SRP and any other regulatory bodies;
* the approval of the Competition Authorities in terms of the Competition
Act;
* the registration of the transfer of the properties being disposed of into
the name of Clidet; and
* ABSA Bank Limited being provided with the necessary security in terms of
the loan documentation relating to the loan facility it has made available to
Clidet. This facility is sufficient to satisfy Clidet`s obligations to settle
the consideration due in terms of the disposal.
8. Opinions and recommendation
As the disposal constitutes a disposal in terms of section 228 of the Act and
management and Clidet are considered to be related parties to iProp, an
independent opinion on the disposal is required by both the SRP and the JSE. In
addition, the SRP and JSE require a property expert to express an opinion on the
value of the properties being disposed of.
KPMG Services (Proprietary) Limited ("KPMG") has been appointed by the board as
the independent expert and Derrick Griffiths has been appointed to provide an
opinion on the value of the properties being disposed of. The full text of the
opinions of both KPMG and Derrick Griffiths will be included with the circular
to be posted to iProp shareholders.
The board of directors of iProp, excluding Ms Heydenrych who is part of
management, is considering the offer from Clidet, and will be expressing an
opinion on such offer in the circular to be posted to iProp shareholders.
9. Documentation and further announcement
A circular to iProp shareholders setting out full details of the disposal, the
distribution and the winding-up, including a notice of general meeting to
consider and vote on the resolutions required to give effect to these
transactions, will be posted to shareholders on or about Wednesday, 12 February
2003, together with the annual financial statements for the year ended 30
September 2002. A salient dates announcement will be published on the same date
as the circular is posted.
Johannesburg
21 January 2003
Corporate advisor
QuestCo
Investments (Pty) Ltd
Attorneys
CLIFFE DEKKER
Auditors
PricewaterhouseCoopers Inc
Chartered Accountants (SA)
Registered Accountants and Auditors
(Registration no 1998/012055/21)
Sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Independent expert
KPMG
Date: 21/01/2003 04:33:23 PM Produced by the JSE SENS Department
