| Fri 9 Sep 2005, 16:24 | | Moribo/ IFA Zimbali Lodge/ IFA - Joint terms annou |
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Moribo/ IFA Zimbali Lodge/ IFA - Joint terms announcement regarding
MORIBO LEISURE LIMITED
(The name of which it is proposed to change to IFA Hotels & Resorts Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1919/001318/06)
Share code: MRB ISIN: ZAE000014023
(`Moribo` or `the company`)
IFA Zimbali Lodge (Pty) Limited and
(Incorporated in the Republic of South Africa)
(Registration number 2004/008431/07)
IFA Hotels & Resorts (South Africa) (Pty) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/023856/07)
Joint terms announcement regarding:
- the acquisition by Moribo of IFA Zimbali Lodge (Pty) Limited and IFA Hotels
& Resorts (South Africa) (Pty) Limited from IFA Hotels & Resorts K.S.C.C
(`IFA`), a Kuwaiti-based real estate company, as a reverse take-over;
- the change of name of Moribo to IFA Hotels & Resorts Limited;
- the consolidation of Moribo shares on a one-for-ten basis;
- the increase in the authorised share capital of Moribo; and
- the reconstitution of the board of directors of the company.
1. Introduction
Further to the cautionary announcements dated 15 March 2005, 31 March 2005 and
12 May 2005, BDO Corporate Finance is authorised to announce that an agreement
in principle has been reached between IFA and Moribo, in terms of which Moribo
will acquire from IFA, as an indivisible transaction, IFA`s entire shareholdings
in IFA Zimbali Lodge (Pty) Limited (`IFA Zimbali`) and IFA Hotels & Resorts
(South Africa) (Pty) Limited (`IFA Hotels`) in exchange for the issue of shares
in Moribo. This will result in the reverse take-over of Moribo (`the reverse
take-over`).
2. Details and terms of the reverse take-over
2.1 The vendor
IFA is a subsidiary of International Financial Advisors Co. K.S.C.C.
(`International Financial Advisors`), a leading investment company which was
established in 1974 and listed on the Kuwait Stock Exchange in 1987. In 2002,
International Financial Advisors extended its investment activities into real
estate and it is currently in the forefront of companies engaged in the
development of tourism projects, hotels and resorts in the Middle East, Europe,
Africa and the Indian Ocean. IFA was established to own, develop and operate the
developments of the group.
2.2 The purchase consideration
The purchase consideration in respect of the acquisition of IFA Zimbali and IFA
Hotels amounts to R105 million and is to be settled by way of the issue of
215,399,001 Moribo shares of par value 1 cent each (`the IFA consideration
shares`).
The purchase consideration is allocated as to R85 million in respect of IFA
Zimbali and R20 million in respect of IFA Hotels. Adjustment accounts to
determine the net asset value of IFA Zimbali and IFA Hotels will be prepared for
the financial period ending on the last date of the month preceding the
effective date of the reverse take-over. The adjustment accounts will be used to
determine the issue price of the IFA consideration shares.
2.3 The effective date
The effective date of the reverse take-over is seven days after the date of
fulfillment of the conditions precedent contained in paragraph 8 below.
3. Rationale for the reverse take-over
As a subsidiary of the Kuwait-based, publicly listed International Financial
Advisors, the depth and strength of IFA places it in the forefront of companies
engaged in the development of tourism projects, hotels and resorts in Europe,
the Middle East, Africa and the Indian Ocean.
As a result of the implementation of the reverse take-over, the shareholders of
Moribo will have an opportunity to participate in future developments which will
enhance Moribo`s global representation and open up a network of new investment
opportunities.
Furthermore, IFA, through its international network of developments and sales
and marketing distribution systems, will bring to South Africa added value in
terms of its international customer base. IFA, in line with its overall
strategy, will also be able to offer an alternative investment vehicle to its
international customers by way of an opportunity to invest in its activities
through a well recognized and regulated stock exchange such as the JSE Limited
(`JSE`).
IFA is making a long-term commitment to tourism and economic development in
South Africa and wishes to entrench its presence in this country, further
enhance its name and brand in the market-place and create an enhanced platform
for any potential investments.
IFA Zimbali is the owner of Zimbali Lodge which is operated by Sun International
Limited. It is a magnificent 5-star boutique hotel with 76 luxurious rooms to be
expanded in 2006 with an additional 20 rooms and is rated by Conde Naste
Traveller magazine as one of the top hotels in the world. Zimbali Lodge is
located amongst indigenous semi-tropical gardens, and overlooks the signature
hole of the scenic Tom Weiskopf-designed championship golf course, the
magnificent lakes and conservation area and the Indian Ocean beyond.
In 2003, IFA Hotels formed a joint venture with Moreland Developments
(Proprietary) Limited (a subsidiary of Tongaat-Hulett Group Limited), to develop
the Zimbali Coastal Resort and the future Zimbali Lakes development. The Zimbali
Coastal Resort covers 3.7 million square meters (370 hectares) of coastal forest
estate with 3,5km of coastline. The joint venture is developing around 700
residential opportunities therein. The Zimbali Lakes development covers 3
million square meters (300 hectares) and is a natural extension of the Zimbali
Coastal Resort. Planning applications have been made for the creation of a
resort on Zimbali Lakes.
4. Cash dividend
Moribo and all Moribo`s subsidiaries are dormant. Moribo is a cash company as
defined in the JSE Listings Requirements. After the implementation of the
reverse take-over, the board of directors of Moribo (`the board`) intends to
settle all outstanding liabilities of the company and to distribute the surplus
cash to shareholders as a dividend (`the dividend`). IFA will not participate in
the dividend. The salient dates announcement for the dividend will be made in
due course with a last date to trade and a record date prior to the date of
issue of the IFA consideration shares.
5. Restructuring of the share capital of the company
In order to reduce the number of shares which must be issued in respect of the
reverse take-over, the company is proposing to consolidate its authorised and
issued share capital by the consolidation of every 10 shares with a par value of
0,1 cent each into 1 share with a par value of 1 cent each (`consolidated
shares`) (`the consolidation`).
In addition, Moribo currently has and will have, after the consolidation,
insufficient unissued authorised consolidated shares to settle the consideration
for the reverse take-over. The company is therefore also proposing that the
authorised share capital of Moribo, after the consolidation, be increased to 500
000 000 consolidated shares by the creation of 461 121 152 new consolidated
shares.
6. Change of name of the company and reconstitution of the board
To better reflect the changed nature and profile of the company`s business and
corporate identity after the implementation of the reverse take-over, the
company is proposing to change its name to `IFA Hotels & Resorts Limited` or
such other name as the Registrar of Companies may approve.
It is proposed that, upon fulfillment of the suspensive conditions, the board
will be reconstituted to reflect the changed nature of the business and new
controlling shareholder.
7. Change of control
As a consequence of the issue of the IFA consideration shares, IFA will acquire
control of Moribo for the purposes of the Securities Regulation Code of the
Securities Regulation Panel (`the SRP` and `the SRP Code`). Accordingly, the
reverse take-over will constitute an affected transaction in terms of the SRP
Code, which would normally oblige IFA to make a mandatory offer in terms of Rule
8 of the SRP Code to the Moribo shareholders.
Application will be made to the SRP to dispense with the requirement to make a
mandatory offer in terms of Rule 8.1 of the SRP Code should a majority of the
independent shareholders present and voting at the general meeting of Moribo
shareholders waive such requirement in accordance with Rule 8.7 of the SRP Code.
A resolution will be proposed at the general meeting of Moribo shareholders to
obtain such waiver.
8. Conditions precedent to the reverse take-over
The implementation of the reverse take-over is conditional upon, inter alia:
- the approvals of the relevant regulatory authorities including the JSE, for
a Main Board listing, and the SRP;
- shareholder approval of the special resolutionS relating to the
consolidation and an increase in the company`s authorised share capital and
the registration of these resolutions by the Registrar of Companies;
- shareholder approval of the ordinary resolution relating to the reverse
take-over;
- shareholder approval of the waiver of the mandatory offer;
- the completion of a due diligence on Moribo to the satisfaction of IFA;
- the deregistration or unbundling of all Moribo subsidiary companies; and
- the conclusion of a detailed agreement between Moribo and IFA containing
normal warranties and guarantees for a transaction of this nature plus any
special matters that may arise out of the implementation of the reverse
take-over.
9. Pro forma financial effects
The pro forma financial effects presented below are the responsibility of the
board and are presented for illustrative purposes only to provide information on
how the consolidation and the reverse take-over might have impacted on the
reported financial information of Moribo if they had been implemented in the
year ended 31 December 2004. Because of their nature, the pro forma financial
effects may not give a fair reflection of Moribo`s financial position at 31
December 2004.
Before the After the After the
consolidation consolidation consolidation
and the and before the and the
reverse take- reverse take- reverse take-
over (1) over (3) over (4,5)
(Loss) / Profit per (10.63) (106.3) 7.93
share for the year
ended 31 December 2004
(cents)
Headline (loss) / (8.94) (89.4) 7.93
profit per share for
the year ended 31
December 2004 (cents)
Net asset value (`NAV`) 0 (2) 0 47.16
per share at 31
December 2004 (cents)
Net tangible asset 0 (2) 0 47.16
value (`NTAV`) per
share at 31 December
2004 (cents)
Weighted average shares 55 230 513 5 523 051 220 922 052
in issue for the period
Shares in issue at the 55 230 513 5 523 051 220 922 052
end of the period
Notes:
1. The figures in this column, other than the NAV and NTAV per share, are
extracted from the audited financial statements of Moribo for the year
ended 31 December 2004.
2. All liabilities, including a potential Value Added Tax liability, are to be
settled and any surplus cash is to be distributed as the dividend.
3. The figures in this column are based on the figures set out in the previous
column after the implementation of the consolidation.
4. The figures in this column have been compiled from the figures set out in
the previous column and from the audited financial statements of IFA
Zimbali and IFA Hotels for the year ended 31 December 2004. For purposes of
the profit and loss and headline profit and loss per share it was assumed
that the reverse take-over had been in effect for the full year ended 31
December 2004 and, for purposes of NAV and NTAV per share, that it had been
implemented on 31 December 2004.
5. The application of note 4 results in the application of different
accounting standards for business combinations. AC131 - Business
Combinations should be applied to the income statement and IFRS 3 (AC140) -
Business Combinations should be applied to the balance sheet. In light of
the above, taking into account that IFRS 3 (AC 140) was applicable for 9
months of the 12-month period, IFRS 3 (AC 140) was applied to both the
income statement and the balance sheet. The fair values assigned to the
identifiable assets, liabilities and contingent liabilities have been
determined using provisional values.
10. General meeting and opinions and recommendation
A general meeting of Moribo shareholders will be convened for the purposes of
considering and, if deemed fit, passing the necessary ordinary and special
resolutions to:
- approve the consolidation;
- increase Moribo`s authorised share capital;
- approve the reverse take-over;
- approve the waiver of the mandatory offer; and
- change the company`s name to IFA Hotels and Resorts Limited.
The board is recommending that shareholders should vote in favour of all
resolutions relating to the implementation of the reverse take-over and all the
members of the board will be voting in favour of all such resolutions in respect
of their shareholdings in Moribo.
Shareholders holding 68% of the issued shares in Moribo have provided
irrevocable undertakings to vote in favour of all resolutions relating to the
implementation of the reverse take-over.
11. Documentation and related JSE and SRP matters
In terms of the reverse take-over requirements set out in the Listings
Requirements of the JSE (`the Listings Requirements`), Moribo is required to
prepare a Category 1 circular and listing particulars as though Moribo was a new
applicant. The circular, which is subject to the approval of the JSE and SRP
and will contain full details of the reverse take-over, will be posted to
shareholders as soon as possible.
The articles of association of IFA Zimbali and IFA Hotels will be amended to
comply with Schedule 10 of the Listings Requirements.
9 September 2005
Johannesburg
Deal Originator and Corporate Advisor to IFA
BDO Spencer Steward Capital (Pty) Ltd
Sponsor to Moribo
QuestCo (Pty) Ltd
Reporting Accountants for Moribo and Auditors to IFA
BDO Spencer Steward (KZN) Inc.
Legal Advisors to IFA
Larson Falconer Incorporated
IFA HOTELS
Email contact: phil@ifahotelsresorts.com
Date: 09/09/2005 03:20:15 PM
Produced by the JSE SENS Department
