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PNG - Pinnacle Point - Sale of Pinnacle Point Golf and Beach Resorts and Renewal of Cautionary Announcement PINNACLE POINT GROUP LIMITED (Incorporated in the Republic of South Africa) (Registration Number 2000/000059/06) JSE Share code: PNG NSE Share code: PNG ISIN: ZAE000127122 ("Pinnacle Point" or the "Company") SALE OF PINNACLE POINT GOLF AND BEACH RESORTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT The Company is pleased to announce that in relation to the cautionary announcements dated 24 December 2010, 04 February 2011, 18 March 2011 and 29 April 2011, the negotiations referred to therein have been finalised. DISPOSAL OF PINNACLE POINT GOLF AND BEACH RESORTS On 13 May 2011, the Board approved a re-instatement agreement of sale which has been entered into with effect from 18 April 2011 whereby the Main Agreement signed on 03 February 2011 has been re-instated with amended conditions precedent and an extension of dates for proof of funds and guarantees by 31 May 2011. The agreement between Pinnacle Point Resorts (Proprietary) Limited ("PPR"), a wholly-owned subsidiary of the Company, Festival Bay Trading 55 (Proprietary) Limited ("Festival"), another wholly-owned subsidiary of the Company, collectively referred to as "the Sellers", and Veritable Investments (Proprietary) Limited ("Veritable") and Raptoguard (Proprietary) Limited ("Raptoguard"), collectively referred to as "the Purchasers" has been signed with effect from 23 April 2011. The agreement states that the Sellers will sell to the Purchasers the golf course, the property upon which the clubhouse is situated, all unsold erven, and certain vacant property upon which a gymnasium, spa, recreational facilities and convention centre will be erected on and utilized as a hotel operation of the Pinnacle Point Resort ("PP Resort"). The purchase consideration for the PP Resort as a going concern is R75 000 000 which is payable in cash. The purchase amount is payable on registration of transfer of the properties to be purchased which will also then be the effective date of the disposal. The Purchasers are a German based consortium that wish to convert the PP Resort into a 5-star resort. The purchase consideration of R75 million will be used, inter alia, to settle outstanding debt of approximately R58 million with Investec Bank Limited. CONDITIONS PRECEDENT The conditions precedent for the above mentioned agreement to be fulfilled are as follows: - Approval by the Veritable and Raptoguard shareholders of this purchase; - Veritable and Raptoguard to furnish the Company with a bank guarantee for the amount of R75 million by 31 May 2011 and the balance of the R400 million by 30 June 2011; - PPR to obtain the sanction of the PPR Homeowner`s Association ("PPHOA") by 21 May 2011 to approve the agreement and amend Article 35.13 of its constitution authorising the hosting of up to 36 professional golf tournaments at the golf course and clubhouse; and - Approval by the Pinnacle shareholders of this transaction, if required. OTHER TERMS The Purchasers grant a first option to PPHOA to acquire the golf course and clubhouse property in the event that the Purchaser does not construct and complete the various facilities within the stipulated time period and/or in the event that the Platinum Members benefits are not maintained as set out in their agreement with the Company. PRO FORMA FINANCIAL EFFECTS Pro forma financial effects of the above mentioned disposal will be released on SENS in a separate announcement in due course. RENEWAL OF CAUTIONARY ANNOUNCEMENT The company remains in negotiations in relation to other matters in addition and separate to this disposal. Accordingly, shareholders are advised to continue to exercise caution until the pro forma financial effects of this disposal are announced as well as until a further announcement is made in relation to other separate negotiations. Johannesburg 17 May 2011 Designated Advisor Arcay Moela Sponsors (Proprietary) Limited Date: 17/05/2011 17:41:10 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.
