| Thu 22 Dec 2005, 13:26 | | Moribo - Update on Terms of Reverse Takeover |
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Moribo - Update on Terms of Reverse Takeover
Moribo Leisure Limited
(which is to be renamed IFA Hotels & Resorts Limited)
(Incorporated in the Republic of South Africa)
JSE code: MRB & ISIN: ZAE000014023
(Registration number 1919/001318/06)
("the company" or "Moribo")
IFA Zimbali Lodge (Pty) Limited
(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)
Supplementary announcement on the terms of the reverse take-over of the company
1. Introduction
Shareholders were advised in an announcement released on SENS and published in
the press on 9 September 2005 and 12 September 2005 respectively ("the original
announcement") that Moribo had agreed in principle to acquire all of the issued
shares and portions of the shareholders loan accounts in IFA Zimbali Lodge (Pty)
Limited ("IFA Zimbali") and all of the issued shares in IFA Hotels & Resorts
(South Africa) (Pty) Limited ("IFA Hotels") from IFA Hotels & Resorts K.S.C.C.
("IFA Kuwait"), a Kuwaiti-based real estate company, as a reverse take-over
("the reverse take-over"). It was also announced that the company intended to
undertake a consolidation of its share capital on a one-for-10 basis ("the
consolidation"), increase its authorised share capital, distribute any surplus
cash to shareholders as well as to reconstitute the board and to change its
name.
2. Update on the terms of the reverse take-over
A formal agreement has now been signed between the company and IFA Kuwait and
the terms of the reverse take-over have been refined as follows:
2.1 The repurchase of shares issued in terms of the company"s share incentive
scheme
Subject to shareholder approval, the board is proposing that the 677 843 shares
held by the company"s share incentive trust are repurchased by the company for
an aggregate consideration of R 1.00 and are cancelled ("the repurchase") and
that the company"s share incentive scheme is terminated.
2.2 A dividend in specie
Due to the uncertainty which exists regarding the nature and quantum of any
liabilities which might exist or might arise in the Moribo subsidiaries which,
although dormant, have not as yet been wound up or deregistered, the directors
have agreed, subject to shareholder approval, that it would be appropriate to
distribute all of the securities in the Moribo subsidiaries to shareholders
prior to implementing the reverse take-over by way of a dividend in specie ("the
dividend in specie").
2.3 Possible specific issue(s) of shares
In addition, and subject to shareholder approval, IFA Kuwait has the right, but
is not obliged, to settle any liabilities which may become apparent within three
years after the effective date of the reverse take-over ("the effective date")
relating to any activities conducted by the Moribo group prior to the effective
date, as well as any associated transaction costs, up to an aggregate value of
R20 million in exchange for the issue of shares in the company ("the specific
issue(s) of shares"). The issue price shall be the weighted average traded
price of the company"s shares over the 30 days prior to the date that the price
of the issue is agreed by the directors of the company or at such price as
determined by an independent advisor appointed to indicate that the issue price
is fair and reasonable.
2.4 The dividend
As set out in the original announcement, it is the intention of the board,
subject to the implementation of the reverse take-over, to distribute all of the
company"s excess cash to its shareholders as a dividend ("the dividend"). It
was announced in the company"s results announcement of 29 September 2005 that
the dividend would amount to between 5 and 7 cents per share. However, the
company has since been advised of a potential Value-Added Tax ("VAT") liability
amounting to approximately R2.5 million and has instituted litigation for the
recovery of R0.5 million (both of which have been fully provided for in the
reviewed interim results of the company presented in paragraph 4 below). The
company is also still in the process of settling and/or recovering certain bad
debts. It is therefore not possible at this time to quantify the extent, if
any, of the dividend. As soon as the company has clarity on the quantum of the
dividend, an announcement will be made.
2.5 Amended purchase consideration
As a result of the repurchase, 212 755 314 consolidated shares will now be
issued to IFA Kuwait as opposed to the issue of 215 399 001 consolidated shares
as set out in the original announcement. The per cent of issued shares held by
Moribo shareholders after the implementation of the reverse take-over remains at
2.5% of the total number of shares in issue.
3. Important dates
As soon as the ordinary and special resolutions relating to the implementation
of the reverse take-over have been approved and, where necessary, registered, an
announcement setting out the salient dates relating to the dividend, the
dividend in specie, the change of name of the company and the consolidation will
be made.
4. Amended financial effects
As a result of the changes to the terms of the reverse take-over as presented
above, as well as the fact that the interim results of the company have become
available and such results have been reviewed by PricewaterhouseCoopers Inc.,
the financial effects of implementing the reverse take-over have been updated.
The earnings and headline earnings presented are therefore for a 6 month period
as opposed to the 12 month period presented in the original announcement.
The adjusted pro forma financial effects presented below are the responsibility
of the current directors of the company as well as the directors which are to be
appointed to the board after the implementation of the reverse take-over and are
presented for illustrative purposes only to provide information on how the
reverse take-over might have impacted on the financial information of the
company if it had been implemented in the 6 month interim period ended 30 June
2005. Because of their nature, the pro forma financial effects may not give a
fair reflection of the company"s financial position at 30 June 2005.
Before the After the After the
repurchase, the repurchase, the repurchase, the
consolidation, consolidation, consolidation,
the dividend, the the dividend and the dividend,
dividend in the dividend in the dividend in
specie and the specie and before specie and the
reverse take- the reverse take- reverse take-
over(1) over(2) over(3,4,5)
(Loss) / earnings per (6.55) - 5.64
share for the 6 month
interim period ended
30 June 2005 (cents)
Headline (loss) / - - 5.64
earnings per share for
the six month interim
period ended 30 June
2005 (cents)
Net asset value per 3.80 - 48.20
share at 30 June 2005
(cents)
Net tangible asset 3.80 - 48.20
value per share per
share at 30 June 2005
(cents)
Weighted average 55,230,513 5,455,267 218,210,680
shares in issue for
the period
Shares in issue at the 55,230,513 5,455,267 218,210,680
end of the period
Notes:
1. The figures in this column are extracted from the reviewed interim results
of Moribo for the 6 month period ended 30 June 2005.
2. The figures in this column are based on the figures set out in the previous
column after the implementation of the repurchase, the consolidation, the
dividend and the dividend in specie. It was accordingly assumed that all
liabilities, including a potential VAT liability, had been settled, all
assets realised and any surplus cash and all interests held in subsidiaries
distributed as the dividend and the dividend in specie respectively. The
income statement, balance sheet, loss and headline loss, net asset value
and net tangible asset value per share have been adjusted to reflect the
discontinuance of Moribo"s business operations.
3. 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 six months ended 30 June 2005. For purposes
of the earnings and headline earnings per share it was assumed that the
reverse take-over had been in effect for the 6 months ended 30 June 2005
and, for purposes of net asset value and net tangible asset value per
share, that it had been implemented on 30 June 2005.
4. The accounting standard for business combinations IFRS 3 (AC140) was
applied to both the income statement and the balance sheet. The fair
values assigned to the identifiable assets, liabilities and contingent
liabilities were determined using provisional values and no goodwill or
negative goodwill arose on acquisition of the business combinations.
5. It was assumed that the specific issue of shares was not implemented since
it is impossible to determine the quantum of an unknown liability.
5. Documentation
Other than as set out above, no other significant new matter has arisen and
there has been no change affecting any of the information contained in the
original announcement which would require disclosure.
The circular containing full details of the reverse take-over and including a
notice of general meeting will be posted to shareholders today.
Johannesburg
22 December 2005
Deal Originator and Corporate Advisor to IFA Kuwait
BDO Spencer Steward Capital (Pty) Ltd
Transactional Sponsor to Moribo
QuestCo (Pty) Ltd
Reporting Accountants and Auditors for IFA Hotels, IFA Zimbali and Moribo
BDO Spencer Steward (KZN) Inc.
Legal Advisors to IFA Kuwait
Larson Falconer Incorporated
Date: 22/12/2005 01:26:07 PM Produced by the JSE SENS Department
