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DEC - Decillion Limited - Detailed cautionary announcement regarding the acquisition by Decillion of all the issued shares of Ardor Property Holdings (Pty) Ltd and further cautionary announcement Decillion Limited (Registration number: 1998/011692/06) (Incorporated in the Republic of South Africa) JSE code: DEC & ISIN: ZAE000108247 ("Decillion" or "the Company") DETAILED CAUTIONARY ANNOUNCEMENT REGARDING THE ACQUISITION BY DECILLION OF ALL THE ISSUED SHARES OF ARDOR PROPERTY HOLDINGS (PTY) LTD ("ARDOR") AND FURTHER CAUTIONARY ANNOUNCEMENT INTRODUCTION Following the cautionary announcements released on SENS on 25 May 2010, 8 July 2010, 20 August 2010, 04 October 2010, 15 November 2010, 28 December 2010, 08 February 2011, 22 March 2011, 06 May 2011 and 21 June 2011 respectively, which announcements detailed that the Company had entered into negotiations with a construction and property development company who are acquiring and consolidating a diversified property portfolio, for a possible reverse listing of a large construction company, development company and the properties being acquired into Decillion, is pleased to announce that Decillion and Ardor Group Proprietary Limited ("Ardor Group") have signed a Memorandum of Understanding ("MOU") dated 2 August 2011. The MOU agrees that Decillion acquires from Ardor Group all the issued shares of Ardor Property Holdings Pty Ltd ("Ardor") for a purchase consideration of R76 million subject to the conclusion of the conditions precedent detailed below. CONDITIONS PRECEDENT The acquisition is subject to the fulfilment of the following conditions precedent: * R29 million of the purchase consideration is payable in equity and the remaining R47 million payable in cash. * The cash payment will be phased over 12 months in line with Decillion`s equity placement and acquisition plan currently being prepared by the Decillion board. * The first cash payment of R30 million will be paid within 14 days after the unsuspension of Decillion ("First Payment"). Post completion of the acquisition Ardor will own all the shares of the companies holding 100% of the following properties, known as: * Sparrow Retail Mall (complete) * Furrowlane Hotel and Conference Venue (complete) * Die Werf (partially complete)("Die Werf") * Ardor offices (complete and to house the new Decillion corporate head office) * Windmill Mall (under development)("Windmill") * Estcourt Retail Mall (in final planning)("Estcourt") Hereinafter "the Portfolio" * R16.8 million of First Payment will be used to complete the land acquisitions by Ardor relating to Windmill and Estcourt. * The maximum bank and or other liabilities to be assumed by Decillion in relation to the Portfolio will not exceed R67 million, excluding development and related debt to be incurred in relation to the development of Die Werf, Windmill and Estcourt. * The historic net income before interest and tax of the Portfolio is R15.9 million rounded, not accounting for any projected annuity rental and development income for Die Werf, Windmill and Estcourt post completion, and escalation in rental income of the current income producing properties. * The bank interest will be at a maximum interest rate of prime or such other rate as agreed by the board with the current financiers of the Portfolio. * The transaction is subject to approval by the shareholders of Decillion as well as regulatory approval and the completion of due diligences by the respective parties on each other within 30 days hereof. * Ardor Group will nominate at least two directors to the board of Decillion. * The acquisition is subject to the capitalisation of all existing debts in Decillion. ARDOR PROPERTY PORTFOLIO Details on the property portfolio and financial effects will be announced in due course. REVERSE TAKEOVER Shareholders are cautioned that the implementation of the proposed acquisition will result in the issue of more than 100% of the current issued share capital of the Company, and accordingly will result in a reverse takeover of Decillion for the purposes of the Listings Requirements, which stipulate that the Company can only retain its listing following the reverse take-over if the JSE is satisfied that the Company continues to qualify to be listed. The listing on the Main Board is conditional on the Company maintaining the said shareholder spread requirements. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS A separate SENS announcement detailing the pro forma financial effects will be published in due course. CHANGE OF CONTROL Depending on the outcome of separate ongoing acquisition discussions, which outcomes will be detailed in a separate announcement once concluded, there may or may not be a change in control. This will be determined in due course and further announcements made where required. DOCUMENTATION AND SALIENT DATES A circular to shareholders detailing the terms of the acquisition and reverse takeover, incorporating revised listing particulars will be drafted and distributed to shareholders in due course. Salient dates shall also be announced in due course. FURTHER CAUTIONARY ANNOUNCEMENT Since the Company is still negotiating further acquisitions and the final terms and pro forma financial effects of the above-mentioned acquisition and reverse takeover have not yet been published, shareholders are advised to continue exercising caution when dealing in the Company`s securities until a full announcement is made. JOHANNESBURG 2 August 2011 SPONSOR Arcay Moela Sponsors (Proprietary) Limited Date: 03/08/2011 08:12:01 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.
