| Wed 15 Feb 2006, 11:22 | | Acc-Ross Holdings Limited - Results Of Offer |
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Acc-Ross Holdings Limited - Results Of Offer, Variation Of Agreements And
Revised Date Of Listing Of Acc-Ross On The Alternative Exchange ("ALTX")
ACC-ROSS HOLDINGS LIMITED
(Formerly Le-Sel Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2000/000059/06)
("the company" or "Acc-Ross")
ISIN Code: ZAE000077335 Share code: ACC
RESULTS OF OFFER, VARIATION OF AGREEMENTS AND REVISED DATE OF LISTING OF ACC-
ROSS ON THE ALTERNATIVE EXCHANGE ("ALTX")
Results of offer and variation of agreements
Following the SENS announcement dated 02 February 2006, shareholders are advised
that the offer closed with subscriptions amounting to 36 839 034 shares at R1
per share. This comprises cash of R5 255 895 and the balance of R31 583 139
from 157 preference shareholders within Gardener Ross Holdings Limited
("Gardener Ross Holdings"), who elected to take up 31 583 139 shares in Acc-Ross
through redemption of their preference shares in lieu of cash. In terms of the
prospectus, the proceeds of the offer were first going to be applied to the
redemption of the preference shares. The remaining 37 219 259 preference
shares, which are redeemable on or before 28 February 2007, will be redeemed out
of the cash proceeds arising from the listing as previously outlined in the
prospectus, or through cash flows generated by Gardener Ross Golf and Country
Estate (Proprietary) Limited ("Golf and Country Estate") on 28 February 2007, or
such earlier date subject to cash flow within the group.
Following the closing of the offer and due to the level of subscriptions, loans
amounting to R4 500 000 have been agreed to be settled in shares at R1 per
shares and certain vendors have elected to accept shares in lieu of amounts due
to them, totalling R70 950 000 at R1 per share. The vendors have signed
variation agreements, details of which are summarised below. The total amount
settled in terms of these arrangements amounts to R75 450 000 settled in shares
at R1 per share and the assumption of liabilities of R22 250 000. This brings
the total new ordinary shares to be issued to 112 289 034 at R1 per share,
bringing the issued share capital to 877 930 034 ordinary shares.
The prospectus disclosed profit forecasts reflecting full subscription and zero
subscription scenarios. Although the full subscription was not achieved, the
positive impact on the zero subscription is material for disclosure to
shareholders.
Accordingly, the impact of the results of the offer and the variation of
agreements are reflected in the restated pro forma balance sheet and profit
forecasts as detailed below. In accordance with the JSE Listings Requirements,
the pro forma balance sheet and revised profit forecast have been reviewed by
the reporting accountants, Ernst & Young, and their report is available for
inspection at the registered address of the company.
Variation agreements
The following agreements, as set out in the prospectus dated 31 January 2006,
have been varied as follows:
1. In terms of the acquisition of Gardener Ross Golf & Country Estate
(Proprietary) Limited ("Golf & Country Estate") by Gardener Ross Holdings
Limited ("Gardener Ross Holdings"), a liability of R20 000 000 was payable, to
be settled out of proceeds of the offer. The agreement has been varied to
provide for the vendor to receive 20 000 000 shares at R1 each, which shares
will be placed, on the vendor"s behalf, on a best endeavours basis..
2. In terms of the acquisition of Eagle Creek Investments 257 (Proprietary)
Limited ("Eagle Creek") by Acc-Ross, a purchase consideration of R15 000 000 was
payable, to be settled out of proceeds of the offer. The agreement has been
varied such that vendors will receive 15 000 000 shares at R1 each, which shares
will be placed, on the vendors behalf, on a best endeavours basis.
3. In terms of the acquisition of Chestnut Hill Investments 111 (Proprietary)
Limited ("Chestnut Hill") by Acc-Ross, a purchase consideration of R20 000 000
was payable for the shares, to be settled out of proceeds of the offer and
certain liabilities amounting to R28 million were to be assumed or settled out
of proceeds of the offer. The agreement has been varied and the vendors will
receive 20 000 000 shares at R1 each in settlement of the purchase price, which
shares will be placed, on the vendors behalf, on a best endeavours basis. With
regard to the liabilities to be assumed, R6 250 000 is to be settled by the
issue of 6 250 000 shares at R1 per share on similar terms, with the balance of
R21 750 000 only payable in approximately 2 years time.
4. In terms of the acquisition of the remaining 50% of Tauve Properties
(Proprietary) Limited ("Tauve") by Acc-Ross, a purchase consideration of R6 500
000 was payable for the shares, to be settled out of proceeds of the offer. The
agreement has been varied to provide for the vendor to receive 6 000 000 shares
at R1 each in settlement of R6 000 000 of the purchase price with the balance of
R500 000 to be settled in cash. The variation agreement also provides for the
settlement of the shareholder loan, amounting to R3 700 000, through the issue
of 3 700 000 shares at R1 per share.
Pro forma balance sheet
The figures shown in the column headed "Reviewed 31 August 2005", have been
extracted from the reviewed accounts of Acc-Ross, without adjustment. The
figures shown in the second column have been adjusted for the issue of 112 289
034 ordinary shares at R1.00 each in terms of the results of the offer detailed
above. The pro forma balance sheet has been prepared for illustrative purposes
only, to provide information on how the raising of capital would have impacted
on the financial position of Acc-Ross, had the issue of shares been effected on
31 August 2005. The nature of a pro forma balance sheet may not give a true
picture of Acc-Ross" financial position after the raising of the capital and
implementation of the variation agreements.
Balance Sheet Reviewed Adjustment Adjustment Pro forma
interim for for interim
31 August placement of assumption 31 August
2005 shares of 2005
R liability R
ASSETS
Non-current assets 460 589 321 523 839 321
Property, plant 316 896 530 41 000 000 22 250 000 380 146 530
and equipment
Intangible assets 130 181 601 130 181 601
Investment in 15 790 15 790
associates
Loans receivable 13 495 400 13 495 400
and investments
Current assets 12 714 596 12 714 596
Trade and other 12 456 107 12 456 107
receivables
Cash and cash 258 489 258 489
equivalents
Total assets 473 303 917 41 000 000 22 250 000 536 553 917
EQUITY AND
LIABILITIES
Capital and 158 141 185 270 430 219
reserves
Issued capital 162 547 714 112 289 034 274 836 748
Accumulated loss (1 783 221) (1 783 221)
Minority interest (2 623 308) (2 623 308)
Non-current 195 838 265 146 299 231
liabilities
Borrowings 173 695 931 (71 289 034) 21 750 000 124 156 897
Deferred tax 22 142 334 22 142 334
Current 119 324 467 119 324 467
liabilities
Trade and other 24 645 850 500 000 25 145 850
payables
Current portion of 94 678 617 94 678 617
borrowings*
Total equity and 473 303 917 41 000 000 22 250 000 536 553 917
liabilities
Shares in issue at 737 141 000 112 289 034 849 430 034
31 August 2005**
Net asset value 21.45 36.69
per share (cents)
Net tangible asset 3.79 16.51
value per share
(cents)
Additional
information:
Fully diluted 877 930 034
shares
Net asset value 30.80
per share (cents)
Net tangible asset 15.97
value per share
(cents)
* Subsequent to 31 August 2005, the current portion of borrowings that was
owed to Investec Bank Limited on the Golf and Country Estate development, has
been settled in full through proceeds realised on the transfer of Phase 1 from
October 2005 onwards.
** Subsequent to 31 August 2005, Accretio Holdings increased it shareholding
in two subsidiaries, namely Tauve and Peel Pickering, through the issue of
6 500 000 and 2 000 000 shares at R1.00 respectively. Accretio also secured its
shareholding in the Comuine project through the issue of 4 000 000 shares at
R1.00 each. These share issues were effected on 14 October 2005, but the effect
is immaterial in comparison to the acquisition of Gardener Ross. Full details
of these issues are shown in Annexure 9 of the prospectus. Acc-Ross also issued
16 000 000 shares at par value, effective 10 November 2005 to its directors and
employees, subject to performance criteria relating to, inter alia, the
performance of the company against profit forecasts.
Profit forecasts
The Acc-Ross profit forecasts for the years ending 28 February 2006 and 28
February 2007, have been revised to take account of the results of the offer and
variation of agreements as detailed above. The revised forecasts of Acc-Ross
incorporate the following projects:
- 90% of Golf and Country Estate;
- 100% of Eagle Creek Investments 74 (Proprietary) Limited ("ECI"), in which
- Phase 1 of Lizard Point is being developed;
- 100% of Eagle Creek, owning 60% of Zeranza;
- 100% of Tauve, which owns:
- 85% of Seven Seasons, in which Royal Palms is being developed; and
- 100% of Redlex, in which Brooklyn Stone is being developed.
28 February 2006 28 February 2007
R R
Revenue 157 548 140 1 010 064 686
Cost of sales (91 486 275) (688 321 971)
Gross profit 66 061 865 321 742 715
Interest earned 2 794 617 913
Operating expenses (33 194 372) (63 520 730)
Impairment of goodwill (25 484 428) (70 609 721)
Donation to empowerment fund - (1 649 026)
Operating profit before interest 7 385 859 186 581 151
Finance costs 31 522 278 58 980 492
(Loss)/profit before taxation (24 136 419) 127 600 659
Taxation 1 249 722 59 361 411
Secondary Tax on Companies 1 662 500 3 927 245
(Loss)/Profit after taxation and (27 008 641) 64 312 004
before dividends
Minority interest in subsidiaries 3 224 943 24 933 317
Preference dividends 13 300 000 6 978 611
(Loss)/profit attributable to (43 533 584) 32 400 075
ordinary shareholders
Proposed ordinary dividend -- 24 439 347
Fully diluted shares (`000"s) 877 930 034 877 930 034
(Loss)/earnings per share (cents) (5.1) 3.7
Headline (loss)/earnings per share (2.1) 11.7
(cents)
Dividend per share - proposed -- 2.8
(cents)
Assumptions
1. The profit forecasts in column 1 and 2 are based on the assumption that the
listing on the JSE is achieved prior to 28 February 2006, taking into account
the results of the offer and variation of agreements detailed above.
2. The revenue for 2006 and 2007 year are based on the sales of stands in the
various developments with specific starting dates.
3. Cost of sales primarily comprises land development costs, adjusted for
stock on hand, and operating costs mainly relating to project costs, with 2006
relating to Phase 1 of Golf and Country Estate and 2007 as detailed in the
segmental analysis below. For 2006, operating costs comprise marketing costs of
R19.7 million, professional endorsement fees of R7 million with the balance
relating to head office and project administration costs. Operating costs for
2007 comprise marketing costs of R34.5 million, commissions of R16.2 million
with the balance relating to head office and project administration costs.
4. The goodwill amount of R130 181 601 is impaired in relation with stand
sales over the next three years:
- 2006 - R 25 484 428
- 2007 - R 70 609 721
- 2008 - R 34 087 452
5. The donation to the empowerment fund is based on 2.5% of after tax profits.
6. The 18.75% preference dividend payable on the remaining 37 219 259 Gardener
Ross Preference Shares.
7. A proposed dividend of R24 439 347, is assumed in the second year, with STC
being assumed at 12.5%.
8. Included in Cost of Sales are the following fair value adjustment amounts
attributable to stand sales in Golf and Country Estate; 2006: R23 699 413 and a
resultant deferred tax credit of R6 872 830, 2007: R65 663 978 and a deferred
tax credit of R19 042 554.
9. It is assumed that there will be no major changes in the economic
environment nor will interest rates fluctuate materially.
10. It is assumed that there will be no changes in legislation affecting the
company.
Projected revenue is mainly from Golf and Country Estate for the year ending 28
February 2006 as a result of pre-sales from Phase 1 of R157 million (net of
sales to Zeranza), having been proclaimed during September and being transferred
to individual owners from October 2005. The profit forecast for 2006 has not
required revision, except for earnings per share information.
A segmental analysis of projects for 2007 and head office costs is set out
below:
Analysis Per Project
Cost of Gross
Sales sales profit
Gardener Ross 435,043,872 277,059,800 157,984,072
Lizard Point 243,914,910 139,372,249 104,542,661
Brooklyn Stone 120,698,289 85,188,241 35,510,048
Royal Palms 47,035,088 16,012,507 31,022,581
Eagle Creek 163 372 527 105 025 196 58 347 331
Fair value adj. 65,663,978 -65,663,978
Goodwill
1 010 064 686 688 321 971 321 742 715
Gardener Operating
Ross
Lizard expenditure Interest Taxation Minority Total
Point
Brooklyn 33,973,927 46,457,120 22,490,378 5,506,264 49,556,383
Stone
Royal 14,407,406 11,863,711 22,517,406 55,754,138
Palms
Eagle 3,854,600 1,011,483 8,742,749 21,901,216
Creek
Fair value 3,700,797 -351,822 7,732,703 2,856,413 17,084,490
adj.
Goodwill -- -- 16 920 729 16 570 640 24 855 962
7,584,000 -73,247,978
70,609,721 -19,042,554 -51,567,167
134,130,451 58,980,492 59 361 411 24 933 317 44 337 044
With regard to projections for the year ending 28 February 2007, it should be
noted that Phase 2 of Golf and Country Estate is already 80% pre-sold with
proclamation and transfers expected in early 2006. Sales and transfers of Phase
3 of Golf and Country Estate have been projected at 60%. Phase 3 pre-sales are
to be launched in early 2006 with proclamation expected in the latter half of
2006 and transfers in early 2007. Total Phase 3 sales are estimated to be in
excess of R400 million.
As each development operates as a stand alone project and is self-funded, no
provision has been made for non-sale of stands in any instance. The costs per
project are budgeted in fixed costs and there is a very large profit margin in
each development, based on historic sale of sites on similar developments in
South Africa. The forecast is, in many cases, not dependant on the acceptance
of the individual estates in the market place as most of the estates have
already met with exceptional pre-development sales, which have already made the
developments secure, profitable exercises.
Further details on each of the projects held through the two main subsidiaries,
namely Accretio Holdings (Proprietary) Limited ("Accretio Holdings") and
Gardener Ross Holdings are set out below:
Accretio Holdings
Accretio Holdings" assets constitute 100% of Accretio Property Developments
(Proprietary) Limited ("APD"). The assets of APD will comprise:
- 100% of the shareholding in ECI, which will develop the Lizard Point Resort
Development;
- 100% of the shareholding in Tauve Developments (Proprietary) Limited
("Tauve"), which in turn owns 100% of the shareholding in Redlex 89
(Proprietary) Limited ("Redlex"), which will develop Brooklyn Stone, and which
further owns 85% of the shareholding in Seven Seasons Trading 60 (Proprietary)
Limited ("Seven Seasons"), which will develop Royal Palms;
- 80% of the shareholding in GR Equity (Proprietary) Limited ("GRE"), which
will develop Blue Horizon Bay;
Lizard Point (Phase 1 of existing project included in the projections)
APD owns 100% of the shareholding in ECI which will develop the Lizard Point
Resort Development, estimated by directors to be a R4,5 billion development over
8 years. The land was acquired in 2004 for a purchase consideration of R11,5
million, which has been settled in full. All professional fees have been
carried by the company to date through funds raised from the sale of debentures.
Lizard Point is a 700 hectare resort development situated at the mouth of the
Wilge river and on the banks of the Vaal Dam next to Orangeville, Free State
Province and currently has a land value of R170 million, with phase 1 of the
project to be funded by project finance. Accordingly, the project does not
require funds raised from the listing.
The project achieved its ROD from the environment authorities on 01 November
2005 and APD began with detailed design of the Lizard Point Resort Development
in November 2005 and is planning to break ground in February 2006. The first
phase of the development comprises an 18 hole championship Links golf course,
which will be co-designed by Retief Goosen and DDV Design Group, with 513
Residential One, freehold stands and 135 cluster units. Phase 1 was officially
launched in August 2005 and pre-sales of stands in excess of R80 million have
been achieved to date. Phase 1 has been included in the profit forecast for the
year ending 28 February 2007.
Phases 2 and 3 comprise the development of residential units and the waterfront
area, which consists of a commercial hotel, retail restaurants, cinemas,
entertainment and the boutique hotel and timeshare component.
The 4th phase will comprise a second 18 hole signature parklands golf course
with 315 Residential One, freehold stands and 621 Residential Two sites. Other
products in the development include boat storage and launching facilities, a
golf driving range, tennis courts, the 2 club houses for the golf courses and
the island with the resort pools and sundowner bars.
An independent valuation of R50 million has been obtained on Phase 1 of Lizard
Point, a summary of which is included in the prospectus.
Brooklyn Stone (existing project included in the projections)
APD owns 50% of the shareholding in Tauve, which in turn owns 100% of the
shareholding in Redlex, which will develop Brooklyn Stone Luxury Apartments, the
first ultra luxury apartment development in the exclusive suburb of Brooklyn,
Pretoria. The development comprises up to 40 units, all of which have been pre-
sold at the initial launch of the development. Pre-sales amounted to
approximately R120 million. The land was acquired for a purchase consideration
of R6,5 million, which has been settled in full. A third party-funder, Pieter
Venter, has a 30% profit share in the project"s net profit after tax, which has
been factored into the projections.
The development is to be fully financed by either Imperial Bank Limited or
Investec Bank Limited depending on commercial terms which are currently under
negotiation and expected to be finalised shortly and, accordingly, does not
require funding from the proceeds of the offer. Construction is set to commence
at the beginning of 2006. The project is expected to be completed by December
2006.
Royal Palms (existing project included in the projections)
APD owns 100% of the shareholding in Tauve, which in turn owns 85% of the
shareholding in Seven Seasons, which will develop Royal Palms. Royal Palms,
located in Plettenberg Bay, has uninterrupted views over Plettenberg Bay and
Keurbooms. Phase 1 of the development comprises 17 upmarket residential stands,
as well as the original estate Manor House, recently valued at R15 million. It
is planned that the Manor House will be converted into a boutique hotel and
wellness centre.
Phase 2 of the development will comprise of a further 14 proposed residential
stands.
The land was acquired for a purchase consideration of R12,5 million, for which
guarantees had been provided. The transfer of the land is in process. All
professional fees have been carried by the company to date through own funding.
The development is to be funded by Investec Bank Limited, with funding already
approved and documentation lodged with attorneys, and the development commenced
during January 2006, with finalisation of Phase 1 in November 2006 and Phase 2
during 2007.
Blue Horizon Bay (existing project, forming part of the projections)
APD owns 80% of the shareholding in GRE, which will develop Blue Horizon Bay Eco
Estate, on a near pristine stretch of land, in order to create an
environmentally friendly, upmarket estate, that will protect and reinstate the
natural environment on a sustainable basis. The property of 76 hectares is
located in an extremely sought-after area of coastal land, between Port
Elizabeth and Jeffreys Bay.
Being a very low density development, less than 150 homes will be accommodated
on the land, leaving ample open space to allow small game to roam freely. The
development brief is to retain and enhance as much of the natural environment as
possible. The roads, other infrastructure finishes and architectural themes
will be selected to take a secondary role to the natural environment. No
internal fences or plot boundary walls will be allowed. The majority of the
homes to be built will have uninterrupted ocean views.
Blue Horizon Bay Eco-Estate is one of the first estates of its kind in the area,
potentially setting the standard for other eco-estates to follow. Every
possible precaution will be taken during the design and development of the
project to minimise negative environmental impact. Comprehensive studies of the
existing flora and fauna, the soil conditions and land use have been done and
will continue to play a critical role in the development.
Planned community facilities include a clubhouse with swimming pool, tennis
courts and a "Village Green" area for sporting activities. The scope of works
for the development includes 95 single or double storey houses on freehold
stands and some areas as Sectional Title, appropriate architectural theme,
secure boundary fence and gatehouse, internal roads and footpaths, common
facilities including a clubhouse, village green, sports fields, and staff
accommodation. It is the intention to introduce suitable small game to roam
through the estate. Dams, bird viewing hides and coastal view points will also
be created, and all alien invader species will be removed.
The land was purchased for R550 000 three years ago and transfer has been
effected. The Environmental Impact Assessment has been prepared and submitted
for approval. The township application is in the process of formulation.
Twelve months have been estimated for the construction of the development
infrastructure, currently planned to commence during May 2006.
Funding for this project was not linked to the private placement and banks will
be approached to finance the project in the normal manner once the Record Of
Decision ("ROD") has been received.
Rock Ridge Resort (existing project not forming part of the projections)
APD owns a 50% stake in Rock Ridge Golf and Fly-fishing Resort through a joint
venture agreement with Smilin" Thru. Rock Ridge is being developed on a lush and
hilly terrain, not far from Parys on the banks of the Vaal River, just over an
hour"s drive from Johannesburg.
The developers want to bring to South Africa, and in particular the residents of
Johannesburg and Pretoria and their surrounding areas, a unique and exclusive
world class, self contained, eco-friendly resort providing golf, fly fishing,
sports and other recreational facilities, and a proposed health spa and hotel.
All the necessary development rights have been secured for the residential and
fractional ownership component of the development, as well as the construction
of a golf course. The hotel and wellness centre, with complimentary resort
facilities, are planned in phase 2. Phase 3 will comprise a game reserve area
of approximately 1 000 hectares with corporate lodges.
The project is located on the Vaal River, with close proximity to Gauteng.
There will be 315 stands, with an experienced team of professional consultants
managing the development.
The scope of works for Phase 1 of the development includes an 18 hole
championship golf course designed to United States Golf Association ("USGA")
specifications, a clubhouse with conferencing and banquet facilities and a pro-
shop, all with views over the golf course to the surrounding mountain ranges, a
sports centre, incorporating a squash court, two tennis course, bowls and a
swimming pool, entrance gatehouse and workshop facility for estate and golf
course maintenance, extensive water features and general estate landscaping and
the infrastructure for 315 residential stands and construction of the perimeter
boundary walling.
As insufficient funds were raised for this project, banks will be approached in
the normal manner to fund the project. The project duration will cover an
estimated 18 months but will only commence once funding has been raised.
Gardener Ross
Gardener Ross was acquired by Acc-Ross for a purchase consideration of R162,5
million, which was settled by the issue of 260 000 000 new shares in Acc-Ross at
62,5 cents per share. Gardener Ross, which previously held a 40% direct
shareholding in Golf and Country Estate, acquired an additional 50%, held by
GRIF, for a purchase consideration of R20 million.
Gardener Ross holds the following investments:
- 90% of the shareholding in Golf and Country Estate;
- 29 Debentures held for resale, which entitle the holder to a prime stand in
Golf and Country Estate;
- 100% of the shareholding in Eagle Creek Investments 257 (Proprietary)
Limited ("Eagle Creek"), which holds 60% in Zeranza 50 (Proprietary) Limited
("Zeranza"); and
- 100% of the shareholding in Chestnut Hill Investments 111 (Proprietary)
Limited, which will develop Welvergenoegd in Durbanville;
Golf and Country Estate (existing project included in the projections)
Golf and Country Estate comprises an Ernie Els signature golf course and a
housing development comprising 1 153 full title stands and is situated in
Centurion, Gauteng. The land was acquired in 2003 for a purchase consideration
of R12 million. The individual stands are to be sold, whilst the golf course,
clubhouse and all other developments will remain the property of Golf and
Country Estate.
Golf and Country Estate has already pre-sold Phase 1 in its entirety, amounting
to pre-sales of approximately R157 million after elimination of sales to
Zeranza, for which 10% deposits and finance approvals have been received. Phase
1 was proclaimed in September 2005 and transfer of the stands commenced in
October 2005, which will convert the pre-sales to recognised turnover for the
year ending 28 February 2006.
Phase 2 sales are in progress and approximately 80% of the stands have been sold
to date. Proclamation and transfer is expected during the course of 2006. Pre-
sales for Phase 3 will be launched before the end of the year, with proclamation
expected towards the end of 2006 and transfer in early 2007.
Golf and Country Estate, per its projected budgets, projects a total profit
after tax from the entire development upon sale of all stands, of approximately
R200 million.
Golf and Country Estate is fully financed by Investec Bank Limited, which has
provided a total facility of R334 million for the project. The project finance
is a rolling facility, attracting interest at prime less 0.5% and a profit share
of 20% of the pre-tax profit. The necessary ROD and Environmental Impact Report
approvals were obtained in 2004 and construction commenced in September 2004.
The development is currently ahead of schedule, with 12 golf holes having been
completed. The project is expected to be completed in the next 15 months.
The Golf and Country Estate project development management is being undertaken
by Devco Africa (Proprietary) Limited, which owns the remaining 10% in Golf and
Country Estate, and has developed, and is currently developing, numerous
property projects throughout South Africa. An independent valuation of R235
million has been obtained for Golf and Country Estate, a summary of which is
included in the prospectus.
Debentures (existing asset, not forming part of the projections)
Gardener Ross owns 29 Debentures, each of which represents ownership of a
fairway stand on the Golf and Country Estate development or is redeemable for
R650 000 cash, which represents a liability to Golf and Country Estate. The
Debentures have a current market valuation of R38 million based on stands sales
currently being achieved.
Eagle Creek (planned project, forming part of the projections)
On 15 August 2005, Gardener Ross entered into an agreement for the acquisition
of 100% of Eagle Creek for a purchase consideration of R15 million, payable in
cash. Eagle Creek has a 60% vested interest in the Cluster Homes Development of
Golf and Country Estate through its 60% shareholding in Zeranza.
The Cluster Homes Development comprises the exclusive right relating to the
development of 164 cluster units, which development is expected to commence in
early 2006 and is expected to be completed during 2007. The estimated profit
before taxation of the entire development over 2 years is R50 million before
taxation, based on an average cost of development of R2,4 million each. Eagle
Creek expects to show a profit of R24 million for the year ending 28 February
2007.
Welvergenoegd (not forming part of the projections)
On 15 August 2005, Gardener Ross entered into an agreement for the acquisition
of 100% of Chestnut Hill for a purchase consideration of R20 million, with a
further R28 million payable in respect of the balance of the purchase price for
the land. Chestnut Hill, also known as the Welvergenoegd Golf and Leisure
Estate, acquired the farm Welvergenoegd for a purchase consideration of R6.25
million during 2004, which purchase consideration will be repaid as part of the
R28 million as detailed above.
Welvergenoegd is a planned signature golf and leisure development situated
outside Durbanville in the Cape and Water Rights have been secured through part
funding of the Durbanville water pipeline. The ROD is expected to be received
in 2006, and it is anticipated that the development will commence during 2007
and be completed within 36 months thereafter. The estimated profit before
taxation of the entire development over 4 years is R400 million. Projections
have not been included for this project due to the fact that the project is
still at an early stage and Environmental Impact Assessments still need to be
submitted.
Authorised and issued share capital
The authorised and issued share capital of Acc-Ross is set out below. The share
capital of the company has been calculated before setting off the estimated
expenses against share premium.
R"000
Authorised
2 000 000 000 ordinary shares of R0.0001 each 200
Issued, before the offer
765 641 000 ordinary shares of R0.0001 each 77
Share premium 174 973
Issued after the offer, settlement of creditors
and variation agreements as detailed above 11
112 289 034 ordinary shares of R0.0001 each 112 278
Share Premium
Issued, after the offer
877 930 034 ordinary shares of R0.0001 each 88
Share premium 287 251
Listing of Acc-Ross on AltX
The JSE has approved the listing of 877 930 034 shares in Acc-Ross with effect
from commencement of business on 16 February 2006.
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on AltX and that the JSE does not
guarantee the viability or the success of a company listing on AltX. In terms of
JSE Listings Requirements a Designated Adviser has to be retained by the
company. The Designated Adviser is required to, inter alia, attend all board
meetings held by the company to ensure that all JSE Listings Requirements and
applicable regulations are complied with, approve the financial director of the
company and guide the company in a competent, professional and impartial manner.
If the company fails to retain a Designated Adviser it must make arrangement to
appoint a new Designated Adviser within 10 business days, failing which the
company faces suspension of trading of its securities. If a Designated Adviser
is not appointed within 30 days of its suspension, the company faces the
termination of its listing without an offer to minorities.
Designated Adviser Reporting Attorneys
Arcay Corporate Accountants Webber Wentzel Bowens
Services Ernst & Young
Auditors and Reporting Stockbrokers Auditors and Reporting
Accountants to Accretio Watermark Accountants to Gardener
Holdings and Acc-Ross Securities Ross
ACT Audit Solutions Inc JA Visagie & Co
Date of issue: 15 February 2006
Date: 15/02/2006 11:22:25 AM Produced by the JSE SENS Department
