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Financial effects and withdrawal of cautionary announcement
IFA Hotels & Resorts Limited
Registration number 1919/001318/06
Share code: IFH
ISIN: ZAE000075669 ("IFA" or "the Company”)
-FULFILMENT OF CONDITIONS PRECEDENT TO THE DISPOSAL OF IFA
BOSCHENDAL
-FINANCIAL EFFECTS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT OF
THE IFA BOSCHENDAL DISPOSAL
-WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT RELATING TO THE INTRODUCTION OF POTENTIAL INVESTORS
1. Conditions Precedent and IFA shareholders’ approval
1.1 IFA Boschendal Investments (Pty) Ltd (“IFA Boschendal”)
IFA shareholders are referred to the announcements released
on SENS on 8 August and 17 August 2012 and are advised that
the conditions precedent relating to the Disposal by IFA
Boschendal in terms of which Canombys Limited will acquire,
as one indivisible transaction, all of IFA Boschendal’s
shares and claims in Boschendal(Pty)Limited (“Boschendal”)(“the Transaction”) were fulfilled on
Wednesday, 22 August 2012 and the Transaction was concluded
on Friday, 24 August 2012.
1.2 IFA
An IFA shareholders meeting will be convened so as to
obtain IFA shareholders approval by way of special
resolution as required in terms of Section 115(2)(b)(ii) of
the Companies Act, 71 of 2008 (as amended) and the JSE
Limited Listings Requirements as set out in more detail in
paragraph 3 below.
2. Unaudited pro forma financial information of the Transaction
The pro forma financial information is based on the published
year-end results of IFA for the 18 months ended 31 December
2011. The preparation of the pro forma financial information
is the responsibility of the Directors. The unaudited pro
forma financial effects have been prepared to illustrate the
impact of the Transaction on the audited financial information
of IFA for the 18 months ended 31 December 2011.
The unaudited pro forma financial effects have been prepared
using accounting policies that comply with IFRS and that are
consistent with those applied in the audited results of IFA
for the 18 months ended 31 December 2011.
The unaudited pro forma financial information has been
presented for illustrative purposes only and, because of its
nature, may not give a fair reflection of IFA’s financial
position and results after the Transaction.
Before After
Pro forma
31 December Adjustments
20111 2,3
%
(cents) (cents) Change4
(Loss) per ordinary share (62.45) (59.33) 4.99%
(cents)
Headline (loss) per share (18.11) (12.97) 28.39%
Net asset value per share (26.07) (29.00) 11.24%
(cents)
Net tangible asset value (27.13) (30.06) 10.80%
per share (cents)
Number of ordinary shares 218 210 680 218 210 680 0
in issue /
Weighted average number of
ordinary shares in issue
Notes:
1. The “Before” basic loss and headline loss per share have
been extracted without adjustment from the audited,
published results of IFA for the 18 months ended 31
December 2011. The “Before” net asset value and tangible
net asset value per share have been calculated from the
financial information presented in the audited, published
results of IFA for the 18 months ended 31 December 2011.
2. The “After pro forma adjustments” loss per share and
headline loss per share assumes:
o Recognition of the loss on disposal of shares and
claims in Boschendal, being the excess of the carrying
value of the investment and claims in Boschendal over
the expected proceeds on the disposal. This will not
have a continuing effect on IFA’s financial results.
o Transaction costs of approximately R934 306 directly
relating to the transaction. This will not have a
continuing effect on IFA’s financial results.
o Reduction in interest income not accrued from the loan
provided to Boschendal at an interest rate of 8%, as a
result of the Disposal of the claims in Boschendal and
the reversal of the tax effect at a company tax rate
of 28%. This will have a continuing effect on IFA’s
financial results.
o Reversal of IFA’s share of the Boschendal loss for the
18 months ended 31 December 2011. This will have a
continuing effect on IFA’s financial results.
o Reduction in interest expense not accrued on loans
repaid from the proceeds of the Transaction, at an
interest rate of 8%, and the reversal of the tax
effect at a company tax rate of 28%. This will have a
continuing effect on IFA’s financial results.
3. The “After pro forma adjustments” net asset value and net
tangible asset value per share assumes:
o Reversal of the carrying value of the loan to
Boschendal.
o Raising of R80.0 million, in cash, received as
consideration for the disposal of the shares and
claims in Boschendal.
o Payment of transaction costs of approximately R934 306
directly related to the Transaction.
o Repayment of loans provided by group companies of an
amount of R10.5 million
o Repayment of the loan provided by Nedbank Limited,
secured by IFA Boschendal, of an amount of R53.8
million.
o Recognition of the loss on disposal of the shares and
claims in Boschendal.
4. Measured as the “After pro forma adjustments” column as a
percentage of the “Before” column.
3. Posting of the circular
In addition to the above, shareholders are also referred to
the announcement released by the Company on 20 July 2012
relating to the posting of the circular to IFA
shareholders.
Shareholders are hereby advised that obtaining property
valuation report/s on the Transaction from the independent
registered valuer took longer than initially envisaged and
therefore the circular to IFA shareholders will be posted
on or about 17 September 2012.
4. Withdrawal of cautionary announcement relating to
Transaction
IFA Shareholders are advised that the cautionary
announcement relating to the above Transaction is hereby
withdrawn following the release of the above financial
effects.
5. Withdrawal of cautionary announcement relating to the
introduction of potential investors
IFA Shareholders are referred to the original announcement
in this regard which was released on 28 October 2011 and the
subsequent renewals thereof, the last of which was released
on 17 August 2012. IFA Shareholders are advised that while
the process to introduce potential investors intothe
business is ongoing, it has not resulted in any corporate
action to date and the said cautionary announcement is
hereby withdrawn. Directors will continue to pursue avenues
to maximise shareholder value and will release an
announcement should circumstances require.
Zimbali
06 September 2012
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)
Legal Advisor: Larson Falconer Incorporated
Corporate Advisor: DEA-RU (Pty) Ltd
Date: 06/09/2012 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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