| Tue 27 Mar 2007, 11:00 | | IFH - IFA Hotels & Resorts Limited - Acquisition o |
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IFH
IFH
IFH - IFA Hotels & Resorts Limited - Acquisition of properties in Namibia
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")
Joint venture between IFA and Ohlthaver & List Finance and Trading Corporation
("O&L") relating to the acquisition and development of properties in Namibia
1. Introduction
Further to the cautionary announcements dated 11 December 2006, 22 January 2007
and 5 March 2007, IFA, through its wholly owned Namibian subsidiary
Heike Fourty-Three Investments (Pty) Limited, is pleased to announce that an
agreement has been reached between O&L, W.U.M. Properties (Pty) Limited ("WUM")
(a subsidiary in the O&L group), IFA Hotels & Resorts K.S.C.C., IFA Hotels &
Resorts FZE and IFA relating to the establishment of a joint venture between O&L
and IFA for the purposes of acquiring and developing certain properties situated
within Namibia ("the properties") ("the joint venture"). The properties will be
developed through the creation of five star hotels, up-market residential areas
as well as commercial and leisure facilities. Kempinski Hotels S.A.
("Kempinski") will be appointed to operate all hotels owned by the joint
venture.
2. Details of the acquisition
Certain properties are to be acquired from WUM by the joint venture company
which will be held 50% by IFA and 50% by O&L.
2.1 The vendor
The vendor of the properties is WUM.
2.2 The properties
The properties comprise:
a) the remaining extent of Farm Kleinbegin in the Oshikoto region
measuring 4 379 m2 on which the Mokuti Lodge (which is a 106 room game
lodge) is situated;
b) Erf 4743 located in the Swakopmund municipality measuring 7 801 m2 on
which the Strand Hotel (which is a 45 room family hotel) is situated;
c) a portion of land measuring 100 000 m2 at Kasiki Kabuta in the Caprivi
Region where the King`s Den (which is an exclusive 13 room game lodge)
is situated;
d) the remaining extent of portion A of Erf 282 in the Windhoek
municipality measuring 2 916 m2 and Erf 990 in the Windhoek
municipality measuring 1,1374 hectares where it is anticipated that a
hotel will be developed.
2.3 The purchase consideration
The total purchase consideration payable by the joint venture company in respect
of the properties amounts to N$97 million which is to be settled with N$35
million in cash from the proceeds of a mortgage loan (as referred to in
paragraph 4 below) and N$62 million through the creation of a shareholder`s loan
in favour of O&L.
The purchase consideration is allocated as to N$57 million for the Mokuti Lodge,
N$27 million for the Strand Hotel, N$7 million for King`s Den and N$6 million
for the property where it is anticipated that a hotel will be developed. IFA is
responsible for 50% of the total purchase consideration.
As at 26 March 2007, the directors of IFA were of the opinion that the purchase
consideration reflected a fair market value for the properties. One of the
executive directors of IFA is registered as a professional valuer in terms of
the Property Valuers Profession Act, No 47 of 2000 (in South Africa).
2.4 The effective date
The effective date for the acquisition of the properties is the date of
fulfillment of all conditions precedent.
3. Rationale for the acquisition and prospects
O&L has been at the forefront of the Namibian hotel and resort sector and, as
such, provides not only a platform for IFA`s initial entry into Namibia, but
also represents future opportunities for IFA to expand further into this growing
market.
Drawing on the expertise and resources of its Middle Eastern headquarters, the
IFA group will tap into its global clientele to generate awareness and grow
investor appeal for its Namibian interests. It is also through the strength of
existing partnerships formed through the IFA group`s Middle Eastern operations
that it has been possible to secure the services of the renowned hotel operator
Kempinski for the joint venture.
4. Conditions precedent to the acquisition
The implementation of the joint venture is conditional upon:
a) IFA securing certain undertakings from the Namibian government;
b) the joint venture company being able to raise N$35 million as a mortgage
loan against the properties;
c) IFA conducting a financial feasibility study including a legal, accounting
and tax survey on the structure of the investment and compiling a satisfactory
business plan, to be approved by O&L, in respect of the operation, development
and marketing of the properties;
d) the four agreements to purchase the properties being entered into; and
e) IFA being satisfied with the conditions of title and the security of the
land tenure of all the properties.
5. Pro forma financial effects
The acquisition of the properties has no significant effect on the historical
net asset value, net tangible asset value, earnings or headline earnings per
share of IFA but, as the properties are still to be developed, their acquisition
is expected to increase IFA`s earnings in the medium to long term future.
6. Extension of cautionary announcement
Shareholders are advised that IFA 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.
27 March 2007
Zimbali
Sponsor to the company
BDO QuestCo (Pty) Ltd
Date: 27/03/2007 11:00:01 Produced by the JSE SENS Department.
