| Fri 22 Dec 2006, 10:30 | | ACC - Acc-Ross - Disposal of land known as The Bay |
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ACC
ACC
ACC - Acc-Ross - Disposal of land known as The Bay and withdrawal of cautionary
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")
DISPOSAL OF LAND KNOWN AS THE BAY AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Acc-Ross, through its wholly owned subsidiary, Zamien Investments 66
(Proprietary) Limited ("the seller") announces the disposal of the development
known as The Bay through the sale of Portion 166 De Rust and the Remaining
Extent of Portion 2, De Rust to Clidet No 677 (Proprietary) Limited and Clidet
No 696 (Proprietary) Limited respectively (together known as "the purchaser").
The purchaser represents a consortium of investors comprising, inter alia, the
Carnoustie Investment Trust, the Sibo and Busi Investment Trust and the Walden
Business Trust, primarily representing Ivora Properties (Proprietary) Limited.
The disposal is for a total purchase consideration of R195 550 000, through a
number of agreements dated 14 December 2006, subject to the conditions precedent
noted below. The purchaser is not a related party to Acc-Ross.
Conditions Precedent
The disposal is subject to the following conditions precedent:
* board approval of both the seller and the purchaser by 10 January 2007;
* the transaction becoming unconditional before 14 April 2007;
* written confirmation from banks of grant of loan funding to the purchaser
of R95 550 000 by no later than 14 February 2007;
* approval by the shareholders of Acc-Ross in general meeting;
* any other regulatory approvals, including JSE Limited ("JSE") and
Competition Commission, within the specified timelines of such regulatory
authority; and
* delivery of guarantees acceptable to the seller within 15 days of
completion of all other conditions precedent.
Terms of the Disposal
The sale consideration of R195 550 000 shall be paid by the purchaser to the
seller in cash of R95 550 000 on date of registration of transfer of the land,
with the balance being settled through the issue of debentures, redeemable as
follows:
* R20 000 000 within 60 days of date of transfer;
* R20 000 000 within 18 months of date of transfer;
* R25 000 000 within 30 months of date of transfer; and
* R35 000 000 within 42 months of date of transfer.
The debentures will become interest bearing, at the Nedbank Limited prime
interest rate, after 18 months from date of transfer of the land. Shareholders
of the purchaser have provided security for any obligations outstanding to the
Seller through the cession and pledge of 60% of the shareholding in Clidet No
677 (Proprietary) Limited, which obligation will be reduced on a pro rata basis
to any outstanding obligations.
Rationale for the disposal
A decision was taken to dispose of one of the larger projects in the Acc-Ross
group in order to generate additional cash flow for the group`s other projects
and to further strengthen the group`s balance sheets. The Bay provided the
group with the largest short term return from a willing buyer.
Pro forma financial effects of the disposal
The table below summarises the pro forma financial effects of the disposal on
the unaudited interim financial statements for the six months ended 31 August
2006. The financial effects are the responsibility of the directors and have
been prepared for illustrative purposes only, to show the possible financial
effect if the disposal had been effective on 01 March 2006 for income statement
purposes and as at 31 August 2006 for balance sheet purposes. The pro forma
financial effects, because of their nature, may not give a true reflection of
the financial position, the statement of changes in equity, the results of
operations or cash flows of Acc-Ross.
Before the After the %
Disposal Disposal Change
Weighted average shares in issue 972 734 972 734 --
(`000)
Earnings per share ordinary share 0.19 2.70 1 284%
(cents)
Headline earnings per ordinary share 0.52 7.49 1 350%
(cents)
Shares in issue at period end (`000) 975 930 975 930 --
Net asset value per share (cents) 26.40 28.89 9%
Net tangible asset value per share 10.30 17.23 68%
(cents)
Assumptions:
1. The "Before the Disposal" column is based on published results for the six
months ended 31 August 2006;
2. Proceeds from the disposal have been applied to the elimination of the loan
with Investec Bank Limited and other third party borrowings in the seller,
with the balance to cash;
3. Provision for taxation has been assumed on profit before taxation at 29%;
4. The carrying value of the seller has been impaired to net asset value by
R43 481 609 for the earnings per share calculation, but has been added back
for the headline earnings per share calculation;
5. No reduction in interest paid has been assumed due to accounting policy of
capitalisation of borrowing costs.
Shareholder approval
The disposal of The Bay will require the approval of Acc-Ross shareholders in
general meeting. A circular, containing full details of the disposal and
incorporating a notice of general meeting, will be posted to shareholders within
approximately 28 days of this announcement.
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcements dated 04 October 2006
and 11 December 2006, and are advised that the negotiations regarding the
disposal of a project are now complete, subject to the conditions precedent
noted above. With regard to negotiations with respect of a strategic partner,
shareholders are advised that the strategic partner was satisfied with the first
two phases of the due diligence, but would now like to present a revised
proposal for a more substantial role and shareholding of the company next year
as opposed to proceeding on the basis of the current envisaged agreement.
Shareholders are accordingly advised that, as negotiations are no longer
continuing in their current format and details of any new proposal are unknown,
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 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
22 December 2006
Designated Advisor
Arcay Moela Sponsors
Date: 22/12/2006 10:30:01 Produced by the JSE SENS Department.
