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IFH
IFH
IFH - IFA - acquisition by IFA of additional land and extension of cautionary
IFA Hotels & Resorts Limited
(Incorporated in the Republic of South Africa)
(Registration number 1919/001318/06)
Share code: IFH
ISIN: ZAE000075669
("IFA" or "the company")
Announcement regarding the acquisition by IFA of additional land and extension
of cautionary announcement
1. Introduction
Further to the cautionary announcements dated 11 December 2006 and 22 January
2007, IFA is pleased to announce that an agreement has been reached between
Moreland Developments (Pty) Limited ("Moreland") and Moreland / IFA Resort
Developments ("MIFAZ") (being a partnership / joint venture between Moreland-
Zimbali Resorts (Pty) Limited and IFA Hotels & Resorts (SA) (Pty) Limited, a
wholly owned subsidiary of IFA) relating to the acquisition by MIFAZ of
additional land adjacent to the Zimbali Coastal Estate ("the property") ("the
acquisition").
2. Details of the acquisition
2.1 The vendor
The vendor of the property is Moreland, which is a wholly owned subsidiary of
Tongaat-Hulett Group Limited.
2.2 The property
The property comprises various subdivisions of agricultural land measuring in
aggregate 427 hectares in extent and is bounded by the N2 highway to the West,
Zimbali Lakes and the Tongaat River to the North, the Watson Highway to the
South and the M4/Westbrook township to the East. The property is anchored on
its South-Western corner by the N2/Watson Highway interchange, which is located
on the North-Eastern corner of the proposed King Shaka International Airport.
2.3 The purchase consideration
The total purchase consideration in respect of the acquisition amounts to R139.2
million, excluding Value Added Tax, which is payable in cash. IFA is
responsible for 50% of such purchase consideration in terms of the MIFAZ joint
venture agreement.
As at 26 February 2007, the directors of the company were of the opinion that
the purchase consideration reflected a fair market value for the property. One
of the executive directors is registered as a professional valuer in terms of
the Property Valuers Profession Act, No 47 of 2000.
2.4 The effective date
The effective date of the acquisition is the date of transfer of the property,
which is expected to occur in July 2007.
3. Rationale for the acquisition
The rationale for acquiring the property is to extend the development activities
of MIFAZ to capture value arising from its adjoining Zimbali and Zimbali Lakes
developments. Further resort and residential precincts as well as a significant
business/commercial node close to the proposed King Shaka International Airport
are envisaged.
4. Conditions precedent to the acquisition
The implementation of the acquisition is conditional upon the transfer of the
property and there are no conditions precedent precluding such transfer.
5. Pro forma financial effects
The acquisition has no significant effect on the historical net asset value, net
tangible asset value, earnings or headline earnings per share of the company
but, as the land is to be developed, is expected to increase earnings in the
medium to long term future of the company.
6. Extension of cautionary announcement
Shareholders are advised that the company is continuing with negotiations with
third parties on separate matters which, if successfully concluded, may have a
material effect on the price of the company`s securities. Accordingly,
shareholders are advised to continue to exercise caution when dealing in the
company`s securities until a full announcement in this regard is made.
5 March 2007
Zimbali
Sponsor to the company
BDO QuestCo (Pty) Ltd
Date: 05/03/2007 10:00:01 Produced by the JSE SENS Department.
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