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SKJ - Sekunjalo Investments - Disposal of Sekunjalo House, Block F, the
Terraces, Tokai ("Sekunjalo House")
Sekunjalo Investments Limited
Incorporated in the Republic of South Africa
(Registration number 1996/006093/06)
Share code: SKJ & ISIN: ZAE000017893
("Sekunjalo" or "the company" or "the group")
DISPOSAL OF SEKUNJALO HOUSE, BLOCK F, THE TERRACES, TOKAI ("SEKUNJALO HOUSE")
1. Introduction
1.1 Shareholders are hereby advised that Sekunjalo, through its 100% held
subsidiary Sekunjalo Properties (Pty) Limited, has entered into an
agreement to dispose of its immovable property, known as Sekunjalo
House ("the disposal").
1.2 The disposal referred to in 1.1 above constitutes a category 2
transaction in terms of the Listings Requirements ("LR") of the JSE
Limited ("JSE"). This announcement is for information purposes only
and no action is required by Sekunjalo shareholders with regards to
the disposal.
2. Details of the disposal
Sekunjalo House, more fully described as sections 15, 16, 17 and 18 of SS
The Terraces, scheme no SS565/2004, SS320/2005 and SS 529/2003, including
certain parking bays and store rooms is situate at Block F, the Terraces,
Steenberg Office Park, Tokai ("the property").
3. Rationale for the disposal
The property no longer houses the group`s Head Office and, in line with the
group`s strategy to restructure and reduce the group`s Head Office costs,
the board of Sekunjalo deemed it appropriate to exit the property
investment. The major portion of the property is currently being rented
to third party tenants, with a small portion thereof being rented by
Sekunjalo group companies.
Furthermore, the group has taken a more focused, longer term view on its
investments and believes that the disposal of this non-core asset presents
an opportunity to unlock the value of the capital growth in the property.
4. Particulars of the disposal
4.1 The property has been sold to Dale Property Holdings (Pty) Limited
("the purchaser"), a property holding company, in terms of an
agreement of sale that had initially lapsed and was reinstated on 22
October 2009.
4.2 The effective date of the sale is 1 May 2009, notwithstanding the date
of registration of transfer of the property to the purchaser which
transfer was registered in the Cape Town deeds registry on Tuesday, 17
November 2009.
4.3 Consideration and application thereof
The consideration payable by the purchaser for the purchase of the
property is the sum of R 22 million (excluding VAT), of which R2.5
million has been received by Sekunjalo as a non-refundable deposit
from the purchaser prior to transfer of the property, R16,6 million
was paid in cash on transfer of the property and the balance of R2.9
million, plus interest thereon at prime plus 1%, being deferred over
the short term and payable in 11 monthly instalments of R150 000
following transfer of the property, with the final lump sum payment,
including accrued interest thereon, to be made on the first day of the
12th month following transfer of the property. The consideration
received on disposal by Sekunjalo will be applied to settle long term
debt and overdraft facilities of the group.
4.4 Conditions precedent to the disposal
All conditions precedent to the disposal have been fulfilled and there
are no outstanding conditions precedent to this disposal.
4.5 Other significant terms
The purchaser has provided security acceptable to Sekunjalo for the
deferred purchase consideration payable.
5. Pro forma financial effects of the disposal
The unaudited pro forma financial effects of the disposal are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of Sekunjalo`s financial position nor of the effect on future
earnings after the disposal. Set out below are the unaudited pro forma
financial effects of the disposal, based on Sekunjalo`s audited results for
the year ended 31 August 2009. The directors of Sekunjalo are responsible
for the preparation of the unaudited pro forma financial effects.
Audited before Unaudited after % change
Disposal (1) Disposal(2)(3)(4)
Earnings per share -12.05 -11.06 8.26%
(cents)
Headline earnings per 1.55 1.91 23.27%
share (cents)
NAV per share (cents) 80.57 81.20 0.79%
NTAV per share (cents) 63.63 64.26 1.00%
Shares in issue (`000) 489,339 489,339
Weighted average 489,073 489,073
number of shares in
issue (`000)
Notes:
1. Extracted from Sekunjalo`s audited financial results for the financial year
ended 31 August 2009.
2. The unaudited pro forma financial effects after the disposal has been
calculated based on the assumption that the disposal was affected on 1
September 2008 for the purposes of calculating the earnings per share
("EPS") and headline earnings per share ("HEPS") effects and based on the
assumption that the disposal was effected on 31 August 2009 for the
purposes of calculating the net asset value per share ("NAV") and net
tangible asset value per share ("NTAV").
3. It has been assumed that R 12 million of the disposal consideration
received will be used to reduce the company`s debt that currently attracts
interest at a pre-tax interest rate of 11.43% per annum.
4. It has further been assumed that the remaining R 10 million of the disposal
consideration has been used to reduce the bank overdraft balance that
attracts interest at an average pre-tax rate of 13.45% per annum.
5. The taxation rate applicable is assumed to be 28%.
Cape Town
5 January 2010
Sponsors
PSG Capital (Pty) Limited
Legal advisers to Sekunjalo
Edward Nathan Sonnenbergs Inc
Date: 05/01/2010 16:39:01 Supplied by www.sharenet.co.za
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