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JCD - JCI Limited - Loan Funding Provided by Investec Bank Limited ("Investec")

Release Date: 06/01/2011 11:03
Code(s): JCD KRHT
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JCD - JCI Limited - Loan Funding Provided by Investec Bank Limited ("Investec") in terms of Schedule 13 of The JSE Listings Requirements JCI LIMITED (Incorporated in the Republic of South Africa) Registration number 1894/00854/06 Share code: JCD ISIN: ZAE0000039681 (Suspended) ("JCI" or "the Group") LOAN FUNDING PROVIDED BY INVESTEC BANK LIMITED ("INVESTEC") IN TERMS OF SCHEDULE 13 OF THE JSE LISTINGS REQUIREMENTS Introduction JCI Limited requires cash urgently in order to meet outstanding liabilities and ongoing operating costs, including salaries and wages. However, JCI does not currently have cash resources available to meet its obligations and has no operating business which will generate the required funding. In addition, the major part of JCI`s present NAV consists of illiquid assets (a 62.7% investment in Boschendal Limited and preference shares in Xelewa (Proprietary) Limited (previously Jaganda Trading (Proprietary) Limited) which is currently the subject of a legal dispute) which will not provide the necessary cash flow in the short term. The board of directors of JCI ("JCI Board") believe that the only alternative in the circumstances is to obtain further loan funding from Investec in order to fund JCI`s near term cash requirements. The JSE Limited ("JSE") has indicated that it views the taking of security as a disposal and therefore a related party transaction because Investec is a material shareholder of JCI. As a result, and in order to secure JSE approval, JCI has submitted an application in terms of Schedule 13 of the Listings Requirements for dispensation from the related party provisions which may be applicable to the Investec loan funding. Terms of the Investec loan funding Investec has agreed to provide R8 million of loan funding to JCI on or about 6 January 2011 which will be secured by the Group`s investment in Boschendal Limited and the Group`s shareholder loans to Boschendal Limited. The loan will bear interest at Prime and has a term of 3 months from the date of advance. Views of the JCI Board The JCI Board believe that the additional loan funding from Investec is in the best interests of the company and shareholders as a whole and that if it is not completed, JCI will not have sufficient cash to meet its financial obligations in the near term. Pro forma financial effects on JCI shareholders The pro forma financial effects of the additional Investec loan funding on JCI`s net asset value per share and net tangible asset value per share are not material. Confirmations provided to the JSE In accordance with the requirements of Schedule 13, JCI has provided the JSE with the following confirmations: 1 Confirmation from the JCI Board that: * JCI`s cash requirements do not allow time for shareholder approval; * The additional Investec loan funding is the only available option in the current circumstances; and * The directors of JCI are acting in the best interests of the company and shareholders as a whole and that if the additional Investec funding is not obtained, JCI will not have sufficient cash to meet its financial obligations in the near term. 2 Confirmation from JCI`s sponsor that, in its opinion and on the basis of information available to it, JCI will not be able to meet its financial obligations in the near term. 3 Confirmation from Investec that it would not loan additional funding to JCI unless it received adequate security for the additional funding. 4 Confirmation that the SRP has been consulted. Prospects and working capital JCI`s main asset is its investment in Boschendal which is an iconic South African property development situated near Stellenbosch in the Western Cape. While Boschendal`s property development is in the early stages of development and will not generate cash flow in the near term, the JCI Board are confident of the long term value of Boschendal and are currently exploring alternatives for Boschendal`s development and financing in order to maximise value for shareholders. The legal dispute regarding JCI`s investment in Xelewa (Proprietary) Limited is due to be heard in court in early 2011 and the JCI Board is confident of the merits of its case. As mentioned previously, JCI has no operational cash flows and does not have sufficient cash available for the Group`s present requirements. However, the JCI Board believes that its current financiers will extend the approximately R30 million of additional funding which will be required in the short term based on JCI`s detailed cash budgets. Sandton 6 January 2011 Sponsor: Investec Bank Limited Date: 06/01/2011 11:03:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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