| Thu 7 Sep 2006, 9:10 | | Acc-Ross- Part Reversal of Acquisitions and withdr |
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ACC
ACC
Acc-Ross- Part Reversal of Acquisitions and withdrawal of cautionary
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
Part reversal of acquisitions and sale of assets and new transactions with
the abalengani group of companies (together "The Transactions") and
withdrawal of cautionary announcement
Introduction
Shareholders are referred to the results announcement dated 31 May 2006,
wherein the board of directors indicated that certain transactions
previously entered into with the Abalengani group of companies would
probably be reversed. In addition to this, the company has refocused its
strategy on the development of leisure and resort projects and has been
seeking to dispose of non-core assets and certain top structure
developments. In line with this, the board announces that the company
signed agreements, on 25 August 2006, with the Abalengani Group of
Companies, comprising Abalengani Supplies (Proprietary) Limited, Xeedan
Property Investments (Proprietary) Limited, Zamien Investments 65
(Proprietary) Limited, Zamien Investments 67 (Proprietary) Limited, Zamien
Investments 72 (Proprietary) Limited and Zunaid Abbas Moti, ("Abalengani"
or "the Abalengani Group") as detailed below.
Part reversal of acquisitions and sale of assets
The acquisition by Acc-Ross, through Accretio Property Developments
(Proprietary) Limited ("Accretio"), of 90% of Icon@Sandhurst for a purchase
consideration of R37 million from Abalengani has been reversed ab initio.
The debt in the underlying subsidiary of approximately R60 million will
revert to Abalengani.
The acquisition by Acc-Ross, through Accretio, of 100% of the shares and
loan account claims in Icon@Hyde Park for a purchase consideration of R29
million from Abalengani has been reversed ab initio. The purchase
consideration was previously settled by way of the purchase by Abalengani
for R35 million of 100% of Seven Seasons Trading 60 (Proprietary) Limited
("Seven Seasons") from Tauve Developments (Proprietary) Limited ("Tauve"),
a wholly owned subsidiary of Accretio and which company holds the Royal
Palms development. In addition, certain commissions and recovery of
project fees of R11 million were to be paid by Abalengani. Abalengani also
assumed the debt within Seven Seasons of approximately R16 million. This
sale of Seven Seasons and the related fees payable have been reversed ab
initio
Acc-Ross, through Accretio, had disposed of 35% of Eagle Creek Investments
74 (Proprietary) Limited, which company holds the Lizard Point development,
to Abalengani for a purchase consideration of R24 736 000 in cash and
provision of bridging loan funding of up to R30 million. In addition,
Abalengani was required to procure development funding for Phase 1 of
Lizard Point of R100 million and stand as joint surety for the project
finance for the various phases of the development. The shares and claims
held by the Abalengani group are being repurchased for a consideration of
R42 million and Abalengani will remain as a surety on Lizard Point for an
additional period of six months from 25 August 2006. The acquisition is
subject to suspensive conditions as detailed below.
Debentures held by Abalengani amounting to R24 million, plus interest on
the debentures of R1 million will be settled as part of the above reversal
transaction and loans owing by Abalengani to Accretio of R5 million and by
Accretio to Abalengani of R2 million will be settled.
New transactions
Acc-Ross, through Gardener Ross Holdings Limited ("Gardener Ross"), has
disposed of its shares in and claims against Chestnut Hill Investments 111
(Proprietary) Limited ("Chestnut Hill") for a purchase consideration of R38
250 000 to Abalengani with effect from 01 August 2006. The original cost
of Chestnut Hill, comprising shares and loans settled was R26 250 000. In
addition, further professional costs have been incurred against loan
accounts, which will fall into the claims being purchased by Abalengani.
The disposal is subject to the suspensive condition relating to the re-
acquisition of Acc-Ross" interests in Lizard Point as detailed in
suspensive conditions below.
In addition, Acc-Ross has disposed of its 9% investment in Nondela for a
purchase consideration of R6 million to Abalengani. The cost of
acquisition was R4 million.
Rationale for the transactions
The rationale for the transactions is to streamline Acc-Ross in line with
its repositioning as a developer of leisure and resort developments and to
dispose of its non-core assets. Subject to the suspensive conditions, the
group will be left with three flagship projects, namely Lizard Point at the
Vaal Dam, Gardener Ross Golf and Country Estate in Centurion and The Bay at
Hartbeespoort Dam and two smaller leisure developments on the coast being
Blue Horizon Bay Eco Estate and Royal Palms at Plettenberg Bay. These
smaller projects are currently being evaluated, along with the company"s
investment in Vilancoulos, and a decision may be taken to dispose of one or
two of these projects.
Suspensive Conditions
The re-acquisition of Abalengani"s interests in Lizard Point is subject to
Abalengani re-acquiring interests disposed by them in Lizard Point to third
parties. In the event that Abalengani cannot restore Acc-Ross to its
original 100% shareholding in Lizard Point by 30 September 2006, the Lizard
Point transaction will not proceed and the sale of Chestnut Hill will also
be cancelled. The net amount then due to Acc-Ross of R3 750 000 will be
settled in cash within approximately 3 months.
The agreements are also subject to Competition Commission, JSE approval and
shareholder approval, where necessary.
Pro forma financial effects
The pro forma financial effects are the responsibility of the directors and
have been prepared for illustrative purposes only, to provide information
on how the transaction would have impacted on the results of Acc-Ross and
may not give a true picture of Acc-Ross" financial position, changes in
equity, results of operations or cash flows after the transaction.
Income statement
The pro forma financial effects of the above transaction on the audited
income statement as published on SENS for the year ended 28 February 2006
is reflected below as though the transaction had been implemented with
effect from 01 March 2005.
Before(1) After(2,3,4) % Suspensive %
change (5) change
(7)
(Loss)/earnings (0.40) 0.41 224.7% (0.23) 40.9%
per share
(cents)(6)
Headline earnings 1.52 2.33 53.2% 1.68 10.6%
per share
(cents)(6)
Fully diluted 877 930 034 877 930 034 --% 877 930 034 --%
shares (`000"s)(6)
Notes
1. The income statement has been extracted from the restated audited
results for the year ended 28 February 2006 published on SENS on 01
September 2006.
2. No goodwill has been assumed as the cost of Lizard Point will be
attributed to the underlying property in line with IFRS accounting
treatment. The profit on the disposals of Chestnut Hill and Nondela
of R8 million and R2 million have been assumed, as well as a notional
taxation charge at 29% thereon.
3. The results for the year ended 28 February 2006 have not been affected
by the reversal of the sale of Seven Seasons, as this was fully
provided for at year end in anticipation of the reversal of the sale.
4. Interest on debentures of R1 million has been not been adjusted as the
interest was incurred after year end.
5. The suspensive column shows the effect of the reversal of profit of
approximately R8 million on the disposal of Welvergenoegd, and
notional taxation at 29%, in the event that the suspensive condition
with regard to Lizard Point is not met, but still includes the effect
of the profit on disposal of Nondela.
6. Information has been prepared on fully diluted share information as at
28 February 2006.
7. The percentage change is calculated based on the "Before" numbers.
Balance sheet
The pro forma financial effects on the balance sheet has been prepared for
illustrative purposes only, to provide information on how the transaction
would have impacted on the financial position of Acc-Ross, had the
transaction been effected on 28 February 2006. The nature of a pro forma
balance sheet may not give a true picture of Acc-Ross" financial position
after the transactions.
Before(1) After(2,3) % change
Net asset value per share 18.7 25.5 36.6%
(cents)
Tangible net asset value 9.2 17.0 84.2%
per share (cents)
Fully diluted shares 877 930 034 975 930 034 11.2%
(`000"s)(4)
Notes
1. The pro forma balance sheet has been extracted from the restated
audited results announcement published on SENS on 01 September 2006.
2. The after column has first been adjusted for the pro forma effects of
the combined transaction with Abalengani as announced on SENS on 08
March 2006.
3. The pro forma balance sheet has been adjusted for the impact of the
reversal of the acquisitions of Icon@Sandhurst and Icon@Hyde Park and
reversal of the disposal of minority shareholding in Lizard Point and
the settlement of the debentures. The liability within
Icon@Sandhurst, which is reassumed by Abalengani, has been adjusted.
The balance sheet has also been adjusted for the disposal of Nondela
and Chestnut Hill, together with the assumption of third party
liabilities of R21 750 000, which were included in the balance sheet
as at 28 February 2006. Certain loans owing between Abalengani and
Acc-Ross have also been eliminated.
4. Information has been prepared on fully diluted share information.
Due to the need to reflect the impact of the first transaction entered into
with the Abalengani group on the balance sheet of Acc-Ross prior to
reflecting the pro forma effect of the part reversal, full balance sheet
effects have been reflected below.
Balance Sheets Audited Column "A" Pro forma Column
28 Feb 2006 After A "B"
R R R R
ASSETS
Non-current 299 754 404 259 466 000 559 220 404 -104 000 000
assets
Property, plant 177 481 212 259 466 000 436 947 212 -98 000 000
and equipment
Intangible 82 757 902 -- 82 757 902 --
assets
Investment in -- -- -- --
associates
Investments 25 240 025 -- 25 240 025 -6 000 000
Loans receivable 14 275 265 -- 14 275 265 --
Deferred tax -- -- -- --
Current assets 91 850 343 -20 500 000 71 350 343 -2 750 000
Inventory 32 840 757 -- 32 840 757 --
Trade and other 47 742 978 -30 000 000 17 742 978 -3 000 000
receivables
Other financial 74 522 -- 74 522
assets
Cash and cash 11 192 086 9500 000 20 692 086 250 000
equivalents
Total assets 391 604 747 238 966 000 630 570 747 -106 750 000
EQUITY &
LIABILITIES
Capital and 162 953 961 84 966 000 248 787 792 --
reserves
Issued capital 166 422 414 84 966 000 251 388 414 --
Accumulated loss (3 468 453) -- (3 468 453) --
Minority 867 831 -- 867 831 --
interest
Non-current 106 726 614 120 000 000 226 726 614 -81 750 000
liabilities
Other financial 94 705 949 120 000 000 214 705 949 -81 750 000
liabilities
Other loans 1 000 000 -- 1 000 000 --
Finance lease 294 147 -- 294 147 --
obligations
Deferred tax 10 726 518 -- 10 726 518 --
Current 121 056 341 34 000 000 155 056 341 -25 000 000
liabilities
Trade and other 48 517 234 34 000 000 82 517 234 -25 000 000
payables
Other financial 67 973 597 -- 67 973 597 --
liabilities
Current tax 4 456 249 -- 4 456 249 --
payable
Finance lease 109 261 -- 109 261 --
obligation
Total equity and 391 604 747 238 966 000 630 570 747 -106 750 000
liabilities
Shares in issue 877 930 034 975 930 034
at year end
Net asset value 18.66 25.49
per share
(cents)
Net tangible 9.23 17.01
asset value per
share (cents)
(Continued)
Balance Sheets Pro forma Column "C" After C
After B
R R R
ASSETS
Non-current 455 220 404 18 000 000 473 220 404
assets
Property, plant 338 947 212 18 000 000 356 947 212
and equipment
Intangible 82 757 902 -- 82 757 902
assets
Investment in -- -- --
associates
Investments 19 240 025 -- 19 240 025
Loans receivable 14 275 265 -- 14 275 265
Deferred tax -- -- --
Current assets 68 600 343 3 750 000 72 350 343
Inventory 32 840 757 -- 32 840 757
Trade and other 14 742 978 -- 14 742 978
receivables
Other financial 74 522 -- 74 522
assets
Cash and cash 20 692 086 3 750 000 24 692 086
equivalents
Total assets 523 820 747 21 750 000 545 570 747
EQUITY &
LIABILITIES
Capital and 248 787 792 -- 248 787 792
reserves
Issued capital 251 388 414 -- 251 388 414
Accumulated loss (3 468 453) -- (3 468 453)
Minority 867 831 -- 867 831
interest
Non-current 144 976 614 21 750 000 166 726 614
liabilities
Other financial 132 955 949 21 750 000 154 705 949
liabilities
Other loans 1 000 000 -- 1 000 000
Finance lease 294 147 -- 294 147
obligations
Deferred tax 10 726 518 -- 10 726 518
Current 130 056 341 -- 130 056 341
liabilities
Trade and other 57 517 234 -- 57 517 234
payables
Other financial 67 973 597 -- 67 973 597
liabilities
Current tax 4 456 249 -- 4 456 249
payable
Finance lease 109 261 -- 109 261
obligation
Total equity and 523 820 747 21 750 000 545 570 747
liabilities
Shares in issue 975 930 034 975 930 034
at year end
Net asset value 25.49 25.49
per share
(cents)
Net tangible 17.01 17.01
asset value per
share (cents)
Notes:
1. Column "After A" shows the pro forma effect of the first transaction
with the Abalengani group entered into on 06 March 2006 and announced on
SENS on 08 March 2006, as detailed in "Column A", on the audited balance
sheet as at 28 February 2006.
2. Column "After B" shows the pro forma effect of the part reversal and
new agreements entered into with the Abalengani group as detailed in this
announcement on the Pro Forma After A column.
3. Column "After C" show the impact of the suspensive condition relating
to Lizard Point and Welvergenoegd, if Abalengani is unable to meet the
suspensive condition relating to Lizard Point as detailed above.
Withdrawal of cautionary announcement
As a result of the above announcement, the cautionary announcement is now
withdrawn.
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
Arcay Corporate Services
Date of issue: 07 September 2006
Date: 07/09/2006 09:10:19 AM Produced by the JSE SENS Department
