| Tue 12 Dec 2006, 14:51 | | ACC - Acc-Ross - Acquisition and part withdrawal o |
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ACC
ACC
ACC - Acc-Ross - Acquisition and part withdrawal of Cautionary Announcement
ACC-ROSS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/000059/06)
Share code: ACC & ISIN: ZAE000077335
("Acc-Ross" or "the company")
ACQUISITION OF THE REMAINING INTEREST IN EAGLE CREEK INVESTMENTS 74
(PROPRIETARY) LIMITED (KNOWN AS LIZARD POINT) AND PART WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Introduction
Acc-Ross, through its wholly owned subsidiary, Accretio Property Developers
(Pty) Ltd ("APD") announces the acquisition of the remaining shares in
Lizard Point for a total consideration of R33 750 000. The purchase is
being effected through the acquisition of the entire shareholding of Zamien
Investment 67 (Pty) Ltd and all its sale share claims from Enani Trust
("Enani") and Fana Hlongwane ("Hlongwane") in terms of two separate
agreements ("the acquisition"). The date of the acquisition will be with
immediate effect.
The subsidiary 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 with 6 kilometres of water
frontage, situated at the mouth of the Wilge River and on the banks of the
Vaal Dam next to Orangeville, Free State Province. Facilities of R140
million are in place to fund Phase 1 of the development by Investec Bank
Ltd, subject to minimum pre-sales being achieved.
The project achieved its ROD from the environment authorities on 02 November
2005 and the final amendment to the Guide Plan was promulgated on 19 May
2006. The company is planning to break ground in February 2007. 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
Phases 2 and 3 comprise the development of residential units and the
waterfront area, which consists of a commercial hotel, retail outlets,
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.
Terms of the Acquisition
An amount of R18 000 000 shall be paid by APD to Hlongwane either in cash or
via the issue of shares equal to this value , or settlement of part payment
in cash and the balance of the purchase price will be paid via the issue of
shares as is equal to the value outstanding. In the event of APD making
payment to Hlongwane by way of issue of shares, Hlongwane will irrevocably
grant an option from the date of issue of the Acc-Ross shares up until 31
March 2007 to APD to purchase all the shares issued at the call option
price which is the higher price of 25 cents per share or the 30 day
weighted average price of the shares prior to the exercise date of the
option. Shareholder approval for the exercise of the call option will be
obtained, if and when required, in terms of the JSE Listings Requirements.
An amount is also payable of R15 750 000 to Enani and shall be settled by way
of set-off of an amount of R3 750 000 being an amount owed by Xeedan
Property Investment (Pty) Ltd to Acc-Ross, and an amount of R12 000 000 via
the issue to Enani Trust or its nominee of 60 000 000 shares. This payment
includes a settlement of dispute between the parties.
The Abalengani group of companies has granted suretyship in favour of Investec
Bank Limited in respect of debt owed by ECI and this shall remain in place
for a maximum period of 6 months from the signature date, after which the
said suretyship shall be withdrawn and replaced by an Acc-Ross procured
suretyship, acceptable to the financier concerned, failing which payment
will be made on a monthly basis for the suretyships provided by the
Abalengani group of companies.
All the conditions precedent to the acquisition have been fulfilled.
Rationale for the acquisition
The rationale for the acquisition is to increase the shareholding of Acc-Ross
in its core projects and is also in line with the company`s long-term
strategy of owning 100% of its core projects, of which Lizard Point is one
such project.
Financial Effects of the acquisition
The table below summarises the financial effects of the acquisition pro forma
financial effects of the acquisition on the unaudited interim financial
statements for the six months ended 31 August 2006. The financial effects
have been prepared for illustrative purposes only and, illustrates the
possible financial effect if the acquisition had been effective on 01 March
2006.
Before the After the % Change
Acquisition Acquisition
Weighted average shares in 972 734 1 032 734 6.17%
issue (`000)
Earnings/(loss) per share 0.19 0.18 (5.26%)
ordinary share (cents)
Headline earnings per 0.52 0.49 (5.77%)
ordinary share (cents)
Shares in issue at period end 975 930 1 035 930 6.15%
(`000)
Net asset value per share 26.40 26.11 (1.1%)
(cents)
Net tangible asset value per 10.30 10.92 6.02%
share (cents)
It has been assumed that the payment of R18 000 000 to Hlongwane will be
settled in cash.
Part withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement dated 04 October 2006
and advise that the negotiations regarding the acquisition of the remaining
interest in Lizard Point are now complete. However, the company are still
in negotiations with respect to a strategic partner and the sale of a
project, and are advised to continue to exercise caution when dealing in
the company`s securities until a full announcement is made.
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on the AltX and that the JSE does
not guarantee the viability or the success of a company listed on the AltX.
In terms of the JSE Listings Requirements, a Designated Advisor has to be
retained by the company. The Designated Advisor is required, inter alia,
to attend all board meetings held by the company to ensure that all the 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 Advisor it must make arrangements to appoint a new Designated
Advisor within 10 business days, failing which the company faces suspension
of trading of its securities. If a Designated Advisor is not appointed
within 30 days of its suspension, the company faces the termination of its
listing without an offer to minorities.
Johannesburg
12 December 2006
Designated Advisor
Arcay Moela Sponsors
Date: 12/12/2006 14:51:10 Produced by the JSE SENS Department.
