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Disposal Of Greenoaks Property By Candlestick Park Investments Proprietary Limited
African Dawn Capital Limited
Incorporated in the Republic of South Africa
(Registration Number: 1998/020520/06)
JSE share code: ADW
ISIN: ZAE000060703
(“Afdawn” or the “Company")
DISPOSAL OF GREENOAKS PROPERTY BY CANDLESTICK PARK INVESTMENTS
PROPRIETARY LIMITED
1. THE TRANSACTION
Shareholders are hereby advised that Candlestick Park
Investments Proprietary Limited (“Seller” or
“Candlestick”), a wholly-owned subsidiary of Afdawn
entered into an agreement with Boulder Property
Investments Two Proprietary Limited (“Purchaser”) dated
23 December 2015 (“Agreement of Sale”). In terms of the
Agreement of Sale, the Purchaser will acquire Portion 214
of the farm Lyttleton 381, Gauteng province, commonly
known as the Greenoaks residential housing complex
(“Fixed Property”) (“Transaction”).
2. OVERVIEW OF THE FIXED PROPERTY
The Fixed Property is a residential housing complex in
Centurion, Gauteng, where the residential units are
rented out to tenants on an annual lease basis.
3. EFFECTIVE DATE
The effective date of the Transaction shall be the date
of registration of the Fixed Property into the name of
the Purchaser, as soon as is reasonable after the date of
signing the Agreement of Sale, subject to the fulfilment
of the suspensive conditions set out in paragraph 6 below
(“Effective Date”).
4. RATIONALE FOR THE TRANSACTION AND USE OF PROCEEDS
The Fixed Property has been identified as a non-core
asset by the Afdawn board of directors. The Transaction
is in line with the strategy of the Company to dispose of
certain non-core assets.
The net proceeds of the Transaction will be used to
reduce liabilities and fund other ongoing commitments of
the Company.
5. PURCHASE CONSIDERATION
In terms of the Transaction, the purchase consideration
for the Fixed Property is R35 million (“Purchase
Consideration”), which will be a payable as follows:
5.1. a deposit or guarantee in the amount of
R3.5 million must be paid on or before 13 January
2016 into the trust account of the Seller’s
attorney; and
5.2. the balance of the Purchase Consideration shall be
payable by means of an irrevocable and
unconditional bank guarantee issued in favour of
the Seller and must be delivered within 45 days
from signature of the Agreement of Sale to the
Seller’s attorney.
6. SUSPENSIVE CONDITIONS
The Transaction is subject to the fulfilment of the
following suspensive conditions:
6.1. the Purchaser must secure a loan on or before
29 January 2016 in the sum of at least R28 million
from a registered bank or other registered
financial institution as a first mortgage bond
over the Fixed Property and/or any other property
owned by the Purchaser; and
6.2. receipt of all regulatory and/or shareholder
approvals required in accordance with applicable
law, the Listings Requirements of the JSE or any
other regulations.
7. FINANCIAL INFORMATION
The net value of the Fixed Property, which is the subject
of the Transaction, was R10.95 million as at the year
ended 28 February 2015.
The loss attributable to the Fixed Property, which is the
subject of the Transaction was R0.24 million for the year
ended 28 February 2015.
8. OTHER RELEVANT INFORMATION
Save for set out in this announcement, the parties have
provided warranties to each other that are standard to a
transaction of this nature.
9. SETTLEMENT AGREEMENT RELATING TO CANDLESTICK
9.1. The Fixed Property, which is the subject of the
Transaction, was transferred to Candlestick in
August 2010 in the settlement of amounts owing to
African Dawn Property Transfer Finance 2
Proprietary Limited (“PTF2”) and African Dawn
Property Transfer Finance 3 Proprietary Limited
(“PTF3”) by Blue Dot Properties 1198 CC (“Blue
Dot”) (“Transfer”).
9.2. The liquidators of Blue Dot subsequently made an
application seeking relief, inter alia, setting
aside the Transfer, which application was opposed
by Candlestick and accordingly disputed between
the parties (“Dispute”).
9.3. Further to the Transaction, Candlestick has
entered into a settlement agreement relating to
the Dispute with Nedbank Limited (“Nedbank”),
PTF2, PTF3, and Blue Dot (“Settlement Agreement”).
The parties will make application for the
Settlement Agreement to be made an order of the
court.
9.4. In terms of the Settlement Agreement, the proceeds
received by Candlestick from the Transaction will
be divided and paid as follows:
9.4.1. Nedbank will be paid as a first charge the
amount of the balance due to it under the
mortgage bond over the Fixed Property, as
at the Effective Date;
9.4.2. a fixed sum of R8 million, which includes
legal costs set out in paragraph 9.4.3
below, will be paid to Blue Dot;
9.4.3. Nedbank’s taxed legal cost on the scale as
between attorney and client incurred, to be
paid first from the fixed sum of R8
million;
9.4.4. 50% of the net proceeds after deduction of
the amounts set out in paragraph 9.4.1,
paragraph 9.4.2 and paragraph 9.4.3 above
(“Net Proceeds”), will be paid to PTF2 in
full and final settlement of its loan claim
against Candlestick; and
9.4.5. 50% of the Net Proceeds will be paid to
PTF3 in full and final settlement of its
loan claim against Candlestick.
9.5. Based on the terms of the Settlement Agreement,
Afdawn expects to receive proceeds of R9.15
million as a result of the Transaction.
10. CATEGORISATION
The categorisation of the Transaction is still being
determined by the Company in consultation with the JSE.
Shareholders will be advised of the categorisation in due
course.
Cape Town
23 December 2015
Corporate Adviser and Transaction Designated Adviser
PSG Capital
Date: 23/12/2015 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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