| Thu 29 Apr 2004, 8:32 | | The Disposal Of A Portfolio |
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Lyons Financial Solutions Holdings Limited - The Disposal Of A Portfolio Of
Release Date: 29/04/2004 07:19:28 Code(s): LYS
LYONS FINANCIAL SOLUTIONS HOLDINGS LIMITED - THE DISPOSAL OF A PORTFOLIO OF
PROPERTIES BY LYONS CORPORATE LEASE FUND (PROPRIETARY) LIMITED ("LCLFL") TO
GROWTHPOINT PROPERTIES LIMITED ("GROWTHPOINT") AND METBOARD PROPERTIES LIMITED
("METBOARD") (COLLECTIVELY, "THE DISPOSALS") AND FURTHER CAUTIONARY ANNOUNCEMENT
LYONS FINANCIAL SOLUTIONS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/022117/06)
Share code: LYS ISIN: ZAE000024709
("Lyons")
The disposal of a portfolio of properties by Lyons Corporate Lease Fund
(Proprietary) Limited ("LCLFL") to Growthpoint Properties Limited
("Growthpoint") and Metboard Properties Limited ("Metboard") (collectively,
"the disposals") and further cautionary announcement
1. Introduction
Lyons shareholders are referred to the cautionary announcement released on
the Securities Exchange News Service of the JSE Securities Exchange South
Africa ("the JSE") on Friday, 26 March 2004, in terms of which it was
announced that the board of directors of Lyons ("the Lyons board") had
received offers in writing from Growthpoint and Metboard to acquire a
portfolio of properties from LCLFL. LCLFL is a company in which Lyons holds a
45% equity interest, with the remaining 55% of the shares in LCLFL being held
by The Rainmakers Investment Trust, of which Lyons is the 100% beneficiary.
Investec Bank Limited is authorised to announce that the board of directors
of the relevant wholly or partly owned subsidiary companies of LCLFL ("the
sellers") owning the 33 properties forming part of the disposals ("the
properties") have entered into separate sale and purchase agreements ("the
sale and purchase agreements") for the disposal of the properties to
Growthpoint and Metboard for R288,0 million and R176,4 million, respectively,
amounting to a total disposal consideration of R464,4 million in aggregate
subject to the terms and conditions as set out in paragraph 3 below.
2. Rationale for the disposals
Lyons believes that the conclusion of the disposals is a fundamental step
in the strategic direction of Lyons as it provides, inter alia, the following
benefits to Lyons and its shareholders:
- it will sufficiently capitalise Lyons to pursue further opportunities in
the property and financial services sector; and
- it will enable Lyons to continue to build itself into a investment
management and trading operation focused on the real estate and specialised
finance sectors of the property industry.
Lyons will utilise the proceeds from the disposals to settle long and
short-term debt, which will then place it in a position to take advantage of
opportunities in the property sector including property development, trading
and its specialised finance business.
3. Terms of the disposals
3.1 Growthpoint
In terms of the disposals, LCLFL will dispose of a portfolio of 11
properties to Growthpoint in terms of Section 228 of the Companies Act, 1973
(Act 61 of 1973), as amended ("the Act") for an aggregate purchase
consideration of R287 950 618 ("the Growthpoint disposal consideration") to be
settled as to:
- R57 590 124, representing 20% of the Growthpoint acquisition
consideration, through the issue of 9 394 800 new Growthpoint linked units
("the Growthpoint consideration units") at a price of R6,13 per linked unit;
and
- the balance of R230 360 494 in cash, representing 80% of the Growthpoint
acquisition consideration.
The properties forming part of the disposals to Growthpoint are set out in
the table below:
Seller Property Lease Purchase
description/Tenant expiry price
R
1. Shelfigret 76 (Pty) Ltd Wiphold October 2006 24 596 818
2. Shelfigret 84 (Pty) Ltd Eagle Freight April 2012 23 358 000
3. Erf 251 Eastgate (Pty) Ltd Avnett Kopp February 2013 15 274 500
4. Omnipact SA Inv 85 (Pty) Ltd ABSA March 2006 8 817 900
5. Shelfigret 88 (Pty) Ltd Nu Payment Solutions May 2010 6 579 000
6. Quantum Leap Inv 433 (Pty) Ltd ABSA September 2006 13 872 000
7. Liberty Moon Inv 23 (Pty) Ltd Autopage December 2006 25 438 800
8. Quantum Leap Inv 450 (Pty) Ltd Unibank August 2014 82 584 300
9. Shelfigret 78 (Pty) Ltd Gestetner April 2006 32 925 600
10.Fastpulse Trading 22 (Pty) Ltd Nestle August 2018 37 434 000
11.Shelfigret 82 (Pty) Ltd Endemol Productions May 2009 17 069 700
287 950 618
The Growthpoint consideration units will be issued by Growthpoint to the
sellers upon the transfer of the properties into the name of Growthpoint,
which is anticipated to take place after July 2004 but prior to the last day
to trade in order to participate in Growthpoint"s distribution for the six-
month period ending 30 June 2004 ("the June distribution"). As a result, the
sellers, to the extent that they are still holders of the Growthpoint
consideration units, will receive the full June distribution even though they
will not be entitled to such distribution. Accordingly, the sellers have
agreed to an antecedent divestiture of an agreed 35 cents per Growthpoint
consideration unit ("the antecedent divestiture") in relation to the June
distribution. To the extent that the antecedent divestiture is overpaid, the
difference between the antecedent divestiture and the actual June distribution
will be repaid by Growthpoint to the sellers and to the extent that the
antecedent divestiture is underpaid, Growthpoint will receive from the sellers
the difference between the antecedent divestiture and the actual June
distribution. The antecedent divestiture of 35 cents per Growthpoint linked
unit is not a profit forecast, but represents an amount arrived at solely for
the purpose of finalising the mechanism for the antecedent divestiture to be
included in the sale and purchase agreements.
3.2 Metboard
In terms of the disposals LCLFL will dispose of a portfolio of 22
properties to Metboard in terms of Section 228 of the Act for an aggregate
purchase consideration of R176 355 519 ("the Metboard disposal consideration")
to settled as to:
- R35 271 104, representing 20% of the Metboard acquisition consideration,
through the issue of 11 341 191 Metboard linked units at a price of R3,11 per
linked unit; and
- the balance of R141 084 415 in cash, representing 80% of the Metboard
acquisition consideration.
The properties forming part of the disposals to Metboard are set out in the
table below:
Seller Property Lease Purchase
description/Tenant expiry price
R
1. Dotcom Trading 993 (Pty) Ltd Rand Air June 2009 3 553 231
2. Present Perfect Investments
96 (Pty) Ltd Tiger Wheel and Tyre October 2007 6 016 258
3. Capensis Investments 450
(Pty) Ltd Tiger Wheel and Tyre October 2007 8 061 480
4. Bunker Hills Investments Jumbo Cash
623 (Pty) Ltd and Carry September 2011 23 873 746
5. Portion 2 of Erf 430 Isando
Ext 1 (Pty) Ltd Alfa Laval February 2006 20 861 686
6. Portion 169 Stand 602 Spartan Melco Elevators August 2009 3 775 158
Ext 2 (Pty) Ltd South Africa
7. Portion 170 Stand 602 Spartan Scott Bader July 2009 2 550 000
Ext 2 (Pty) Ltd
8. Lot 4/5/6 Bay Foreshore
(Pty) Ltd S A Stevedores January 2010 17 832 820
9. Future Indefinite Investments Goodyear
98 (Pty) Ltd South Africa December 2006 7 010 157
10.Shelfigret 86 (Pty) Ltd Highland Print SA February 2012 10 349 682
11.Omnipact SA Investments
104 (Pty) Ltd Tiger Wheel and Tyre October 2007 11 630 585
12.Cnr Loper Ave Aeroport
(Pty) Ltd Ameron March 2005 3 749 264
MPS Express Services February 2008
13.55 Loper Ave Aeroport Ext 2
(Pty) Ltd Atomaer RSA October 2005 3 749 264
Baldwin Unifilter
Filters March 2006
14. Erf 212 & 213 Millenium
(Pty) Ltd CMG Electrics May 2007 2 962 365
15. Erf 249 Millenium (Pty) Ltd DPR Pharmaceuticals February 2008 2 962 365
16. Quantum Leap Investment
590 (Pty) Ltd Tiger Wheel and Tyre October 2007 6 004 699
17. Defacto Investments 206
(Pty) Ltd Tiger Wheel and Tyre October 2007 3 895 164
18. Shelfigret 87 (Pty) Ltd Atlas Copco Secoroc March 2012 8 103 081
19. Private Preview Investments
41 (Pty) Ltd Quality Products May 2014 17 592 288
20. Snowy Owl 176 (Pty) Ltd Tiger Wheel and Tyre October 2007 6 416 228
21. Portion 53 Stand 602 Spartan Vacant March 2004 2 702 999
Ext 2 (Pty) Ltd
22. Cnr Director & Loper Ave
(Pty) Ltd Transworld Roadfreight January 2007 2 702 999
Amalgamated Fasteners
and Fitting February 2006
176 355 519
The Metboard consideration units will be issued by Metboard to the sellers
upon the transfer of the properties into the name of Metboard, which is
anticipated to take place after 1 July 2004 but prior to the last day to trade
in order to participate in Metboard"s distribution for the six-month period
ending 30 September 2004 ("the September distribution"). As a result, the
sellers, to the extent that they are still holders of the Metboard
consideration units, will receive the full September distribution even though
they will not be entitled to a portion of such distribution. Accordingly, the
sellers have agreed to an antecedent divestiture of a pro rata portion of an
agreed 21 cents per Metboard consideration unit ("the antecedent divestiture")
in relation to such distribution. To the extent that the antecedent
divestiture is overpaid, the difference between the antecedent divestiture and
the actual September distribution will be repaid by Metboard to the sellers
and to the extent that the antecedent divestiture is underpaid, Metboard will
receive from the sellers the difference between the antecedent divestiture and
the actual September distribution. The antecedent divestiture of 21 cents per
Metboard linked unit is not a profit forecast, but represents an amount
arrived at solely for the purpose of finalising the mechanism for the
antecedent divestiture to be included in the sale and purchase agreements.
3.3 Conditions precedent
The disposals are subject to the following conditions precedent:
3.3.1 the approval of the disposals by Lyons shareholders at the general
meeting of Lyons shareholders to be convened for the purposes of considering
and, if deemed fit, approving the disposals ("the Lyons general meeting");
3.3.2 the approval of the disposals by the shareholders in general meeting
of LCLFL and the sellers;
3.3.3 the finalisation of certain specific property-related issues as set
out in the sale and purchase agreements;
3.3.4 the approval of all regulatory authorities whose approval is legally
required for the disposals, including, but not limited to, the Competition
Authorities, the JSE and the Securities Regulation Panel; and
3.3.5 the disposals being advertised in terms of Section 34 of the
Insolvency Act.
3.4 Effective date
The effective date of the disposals is 1 July 2004.
3.5 Settlement of the Growthpoint disposal consideration and the Metboard
disposal consideration
The Growthpoint disposal consideration and the Metboard disposal
consideration will be settled by both Growthpoint and Metboard on the date on
which the properties are registered into the names of Growthpoint and
Metboard, respectively.
4. Special arrangements
4.1 Irrevocable undertakings in respect of the Lyons general meeting
Set out below are the names of the Lyons shareholders, collectively,
holding 373 592 175 Lyons shares, representing 98,2% of the issued share
capital of Lyons who, irrevocably and in writing, have undertaken to vote in
favour of the acquisitions at the Lyons general meeting:
Shareholder Number of % of the issued
Lyons shares share capital
Tradek Baldersons Nominees (Pty) Ltd 307 966 936 81,0
Icarus Nominees (Pty) Ltd 48 032 455 12,6
Garry John Fromentin 17 592 784 4,6
Total 373 592 175 98,2
4.2 Irrevocable undertakings in respect of the general meeting of LCLFL
The Lyons board, as a representative of a 45% shareholding in LCLFL by
Lyons, irrevocably and in writing, has undertaken to vote in favour of the
disposals at the general meeting of LCLFL ("the LCLFL general meeting") to be
convened by the board of directors of LCLFL for the purposes of approving the
disposals.
In addition, the trustees of The Rainmakers Investment Trust, which has a
55% shareholding in LCLFL, irrevocably and in writing, have undertaken to vote
in favour of the disposals at the LCLFL general meeting. Lyons is the sole
beneficiary of The Rainmakers Investment Trust.
4.3 Irrevocable undertakings in respect of the general meeting of the
sellers
The board of directors of LCLFL, as a shareholder of the sellers,
irrevocably and in writing, has undertaken to vote in favour of the disposals
at the general meeting of the sellers to be convened by the boards of
directors of the sellers for the purposes of approving the disposals.
5. Delisting
As Lyons no longer complies with the requisite shareholder spread and free-
float requirements of the Listings Requirements of the JSE, an application was
previously made to the JSE for the delisting of Lyons shares from the JSE
lists. The JSE has approved the delisting of Lyons" shares from the
"Financials - Speciality and Other Finance" sector of the JSE lists from the
commencement of business on Tuesday, 25 May 2004.
6. Opinions and recommendations
The Lyons board has appointed Grant Thornton Kessel Feinstein ("GTKF") as
independent financial adviser to advise on the disposals. The substance of
such advice and the recommendation of the Lyons board will be communicated to
Lyons shareholders in due course.
7. Documentation
It is anticipated that a further announcement including the financial
effects of the disposals, GTKF"s opinion and the recommendation of the Lyons
board will be published in due course. It is anticipated that the relevant
documentation will be posted to Lyons shareholders as soon thereafter.
8. Further cautionary announcement
Lyons shareholders are advised to continue to exercise caution when dealing
in their Lyons shares until a further announcement regarding the disposals is
made.
By order of the Board
Des Magua
Chief Operating Officer
Signed on behalf of the Lyons board.
Sandton
28 April 2004
Merchant bank
Investec
Corporate Finance
(Registration number 1969/004763/06
Sponsor
Deloitte.
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
