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Sharenet Sites
Disposal of the Middlesbrough Shopping Centre and Cautionary Announcement
New Frontier Properties Limited
(Registration number: 123368C1/GBL)
SEM share code: NFP.N0000
JSE share code: NFP
ISIN: MU0453N00004
(“New Frontier” or “the Company”)
DISPOSAL OF THE MIDDLESBROUGH SHOPPING CENTRE AND CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are advised that the Council for the Borough of Middlesbrough (“Council”)
has acquired the Middlesbrough Shopping Centre (“the Transaction”) with immediate
effect. The purchase consideration is GBP12m in cash, which will be applied to eliminate
the loan. The Council is not a related party to New Frontier.
BACKGROUND
Shareholders are referred to the various announcements released on SENS and the
website of the SEM regarding the difficulties being experienced by the incoming Board of
directors due to the impairment of the value of properties below loan value in 2018 due
to the impact of Brexit and the new loan agreement entered into by the former Board.
Subsequent announcements have highlighted the loss of control over the properties and
the rental cash trap by the funder. Furthermore, the Company has advised of the
continued action of the asset manager to sell the properties on behalf of the funder.
RATIONALE FOR THE DISPOSAL
The disposal was implemented by subsidiary directors pursuant to the Amended Funding
Agreement signed with the subsidiary and HSBC Bank Limited in November 2019. The loan
on the Shopping Centre had expired and was being rolled from month to month. The
funder required the disposal of the Shopping Centre to recover its loan or a portion
thereof.
FINANCIAL INFORMATION
The carrying value of the Middlesbrough Shopping Centre at 31 August 2021 was
GBP15 million and the loan amount owing to HSBC was GBP27.8m, representing negative
net asset value of GBP12.8m. The profit after tax attributed to the Middlesbrough
Shopping Centre was GBP0.6m for the period ended 31 August 2021.
The net effect will be an improvement in the net asset value of the Company as the loan
with HSBC has no recourse to New Frontier.
The financial information was provided by the asset manager of New Frontier and is
considered reliable.
The property specific information will be requested and published in due course.
CATEGORISATION AND BREACH
Shareholders are notified that, whilst the Transaction constitutes an undertaking in the
ordinary course of business of New Frontier and therefore does not fall under the scope of
Chapter 13 of the SEM Listing Rules, it is a Category 1 transaction in terms of the JSE Listings
Requirements and, accordingly, requires approval from the Company’s shareholders by
means of an ordinary resolution in a General Meeting.
However, shareholders are advised that the Company still does not have control over its
properties nor the asset manager or subsidiary directors due to certain breach provisions
contained in the revised loan agreements, which matter has been reported to the JSE.
Accordingly, the disposal of the Middlesbrough Shopping Centre without the requisite JSE
and shareholder approval, will result in a breach of the JSE Listings Requirements. This is
outside the control of the incumbent Board.
CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the Company still does not have control over its properties
as announced regularly on SENS and the asset manager is continuing with the process of
trying to sell the remaining property, which disposal will similarly be without the required
JSE and shareholder approval, which will result in a breach of the JSE Listings
Requirements. Shareholders are advised that the current carrying value of the remaining
shopping centre is similarly below the remaining loan amount.
New Frontier was incorporated in the Republic of Mauritius on 5 June 2014 and holds
primary listings on both the Official Market of the SEM and the Alternative Exchange of the
JSE.
By Order of the Board
26 January 2022
This notice is issued pursuant to SEM Listing Rule 11.3, the JSE Listings Requirements and the
Mauritian Securities Act 2005. The Board of the Company accepts full responsibility for the
accuracy of the information contained in this notice.
For further information please contact:
JSE Sponsor
AcaciaCap Advisors Proprietary Limited
+27 11 480 8500
Date: 26-01-2022 12:00:00
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