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QHL - Queensgate Hotels And Leisure Limited - Disposal of Queensgate Leisure Holdings Proprietary Limited and renewal of cautionary announcement QUEENSGATE HOTELS AND LEISURE LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/013649/06) Share code: QHL ISIN Code: ZAE000113718 ("Queensgate" or "the company") DISPOSAL OF QUEENSGATE LEISURE HOLDINGS PROPRIETARY LIMITED AND RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised that the Company has disposed of its shares in, and loan account claims against, Queensgate Leisure Holdings Proprietary Limited and its subsidiaries ("QLH"), for a sale consideration of R468 (being the par value of the shares acquired), in cash to Elatiscan Proprietary Limited ("Elatiscan"), which is a company held 70% by Mvelaphanda Holdings Proprietary Limited ("Mvelaphanda") and 30% by Investec Bank Limited. Mvelaphanda is a related party to Queensgate. The original agreement was signed on 08 October 2010 and was extended in terms of addenda dated 11 January 2011 and 10 June 2011. The disposal will be with immediate effect. The directors of the Company believe that the disposal is in the best interests of the Company as the investment in QLH was previously impaired in full in the Company`s results published for the period ended 28 February 2010 and there were no refinancing options available to the group. However, the continued holding of shares in QLH has prevented the company from progressing in certain other transactions due to the large liabilities in QLH. QLH was placed into provisional liquidation during 2009 and was facing final liquidation, which was averted by Elatiscan undertaking a Section 311 process under the previous Companies Act, 1973, as amended, in order to seek to recover a portion of the liabilities due to them. The retention of QLH holds no further prospects for Queensgate nor its shareholders and the disposal thereof will remove the major portion of the group`s liabilities. The value of QLH is negative and the disposal consideration of R468 was determined based on the par value of the shares held. The JSE has been provided with the statement of the liquidators in this regard. The Section 311 process was finalised and Elatiscan is the only remaining creditor in QLH. It will be seeking to dispose of the underlying assets in QLH in order to recover a portion of its loans. Given the above, the JSE will be considering the termination of the Company in due course. An extract of the impact of the disposal as detailed in the results announcement for the six months ended 28 February 2010 is set out below: ASSETS R Available for sale assets 116 549 Assets of subsidiary in liquidation 32 710 Surplus on liquidation of subsidiary 83 839 LIABILITIES Available for sale liabilities 108 327 Liabilities of subsidiary in provisional 108 327 liquidation The pro forma financial effects of the disposal on the last published results is set out below: Per share information Pro forma Published % 28 February 28 February Change 2010 2010 Before After
Net asset/(liability) -4.68 -0.04 99.10% value per share (cents) Net tangible -4.68 -0.04 99.10% asset/(liability) value per share (cents) Shares in issue at 1 1 0.00% period end (`000) 809 045 809 045 Attributable loss per -23.18 -18.54 20.00% share (cents) Headline loss per share -5.14 -5.14 0.00% (cents) Weighted average shares 1 1 0.00% in issue (000`s) 809 045 809 045 Assumptions 1. The published "After" numbers have been extracted from the last published results of the Company for the six months ended 28 February 2010. 2. The pro forma "Before" column has been adjusted to show the effect of the following: - for the statement of financial position purposes the gain on liquidation on subsidiaries of R83m has reduced assets held for resale and reduced retained earnings as though the gain had not been recognised. - for the statement comprehensive purposes the impairments losses were increased by R83m to remove the effect of the gain recognised on liquidation. 3. The impact of the sale of shares is the same as the impact on the liquidation of the subsidiary grouping. 4. The proceeds of R438 have been set off the investment in subsidiary and has no impact on the NAV, NTAV, EPS or HEPS calculations. The disposal consideration of R438 is considered fair by the directors, based on the liquidators` statement dated 13 April 2010 and the fairness opinion as detailed below. The gain recognised on liquidation in the February 2010 results amounted to approximately R83.8 million. In addition, the consideration and disposal is not categorised as either a Category One transaction and shareholder approval for a related party transaction would not be required in terms of the Alternative Exchange Listings requirements. However, due to the unusual nature of the transaction and the consideration, the JSE was consulted in terms of categorisation. An independent fairness opinion on the disposal of QLH has been obtained from BDO Corporate Finance (Proprietary) Limited, which opinion was found to be fair. A copy of the fairness opinion will be available for inspection at the registered office of the company for 28 days after this announcement. The continued future prospects of the group are dependent on the injection of new assets and/or cash. The board of the Company has recently been restructured and a new Chief Executive Officer and Financial Director have been appointed. The new executives are busy with regularising the Company with regard to compliance and other matters, which include finalising the results and audits of the Company for the year ended 31 August 2011. The company is currently in negotiations for the injection of new assets, which will constitute a reverse listing in terms of the JSE Listings Requirements, which assets must be suitable for a new listing and approved by the JSE. A working capital statement will be made as part of the JSE Listings Requirements for a reverse listing. RENEWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised that the company is still in negotiations as detailed above and so should continue to exercise caution when dealing in their securities. By order of the board 19 December 2011 Designated Advisor Arcay Moela Sponsors Date: 19/12/2011 17:00:01 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.
