Wrap Text
COL - Colliers South Africa Holdings Limited - Disposal of non-core assets
to related parties
COLLIERS SOUTH AFRICA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/012245/06)
Share code: COL ISIN: ZAE000099461
("CSA" or "The Company")
DISPOSAL OF NON-CORE ASSETS TO RELATED PARTIES
1. Introduction
Shareholders are advised that CSA has accepted an offer from Reccared
Prankir Fertig, Wayne Peter Alcock, Ian Kenneth Setzkorn and Bernard
William Kaiser ("the Purchasers"), all of whom are executives of CSA,
to acquire, by way of a management buy-out, all of CSA`s non-core
subsidiaries, being the service companies and properties held for sale,
within the CSA Group, for a purchase consideration of R1.25 million
("the disposal consideration"). In terms of the agreement the
purchasers will acquire a 100% of Colliers` interest in the following
non-core subsidiaries, collectively referred to as the "MBO Group of
Companies", with effect from 1 September 2011:
* Colliers RMS (Pty) Ltd - a wholly-owned subsidiary of Colliers,
which holds property located in Pietermaritzburg, Kwa-Zulu Natal,
which property is held for re-sale and which company is also the
holding company of all the other companies forming part of the MBO
Group of Companies as detailed below:
* Colliers Property & Facilities Management (Pty) Ltd - a
wholly-owned subsidiary of Colliers engaged in Property and
facilities management of buildings on behalf of third
parties;
* Hollyberry Props 130 (Pty) Ltd - a wholly-owned subsidiary of
Colliers and the owner of the property located in Edenvale,
Gauteng, which property is held for sale;
* Colliers Broking (Pty) Ltd - a wholly-owned subsidiary of
Colliers engaged in fixed property broking;
* Islandsite Investments Twenty Three (Pty) Ltd - a wholly-
owned subsidiary of Colliers and the owner of land in
Vosloorus, which land is held for development and carried at
a cost of R 20 310 935;
* Erf 68 Illovo (Pty) Ltd - a wholly-owned subsidiary of
Colliers and the owner of four residential units in Salt Rock
Residential Scheme, Salt Rock, Kwa-Zulu Natal, which
properties are held for resale;
* Colliers RMS Nelspruit (Pty) Ltd - a wholly-owned subsidiary
of Colliers and the owner of the Woolworths building, cnr.
Princess and Voortrekker Roads, Benoni;
* Collprop KZN (Pty) Ltd, Colliers Auctions (Pty) Ltd, Colliers
Residential (Pty) Ltd, Collprop Kwa-Zulu Natal(Pty) Ltd,
Colliers Property Investment Two (Pty) Ltd, Quyn Outsource
(Pty) Ltd, Quyn Sure (Pty) Ltd, Quyn Financial Services (Pty)
Ltd and NIB 82 Shareblock (Pty) Ltd, all of which are wholly-
owned subsidiaries of Colliers, but which companies are
currently dormant; and
* Atteridge Investments (Pty) Ltd, MDB Holdings (Pty) Ltd,
Alpcoll (Pty) Ltd and Alpcoll Shareblock (Pty) Ltd, which
companies Colliers holds a 50% interest in, but all of which
are currently dormant.
2. Rationale for the disposal
The disposal will result in CSA being a purely commercial property
focused company with industrial and retail property investments in
Elsies River and Hout Bay in the Western Cape. The Board is of the
opinion that the disposal will facilitate the long term growth of the
Group as management`s attention will not be misdirected to loss making
businesses. The re-alignment of the Group`s business strategy into a
focussed property owning entity is also expected to facilitate future
acquisitions by CSA of income producing properties.
3. Terms of the disposal
The disposal consideration of R1.25 million will be paid by the
purchasers to CSA in 12 equal monthly instalments commencing on 1
January 2012, together with interest at a rate equal to the Prime
Overdraft Rate as quoted by First National Bank Limited. The disposal
consideration will be applied towards the reduction of debt.
Notwithstanding the delivery by CSA to the Purchasers of the
certificates of title in respect of the issued shares in the MBO Group
of Companies, CSA will retain possession of the shares in the
Purchasers` names and in negotiable form to be released on the full and
final payment of the disposal consideration.
Overdraft facilities in the amount of R13 million will revert to CSA,
R10 million of which is secured by assets owned by Somerset Mall
Developments (Pty) Ltd, which remains a subsidiary of CSA. The
overdraft facilities will be replaced by inter-company loans. The MBO
Group of Companies will provide the necessary sureties to ensure that
CSA does not suffer any economic loss in respect of the remaining R3
million of facilities.
4. Property information
Details of the properties held for sale which form part of the MBO
Group of Companies, including property name and address, location,
rentable area, sector, weighted average rental per square metre,
effective date of acquisition, purchase price and/or net cost and the
valuations attributed to the properties by Peter Parfitt, a
professional associated valuer as at 1 March 2011, are as follows:
Property Location Rentable Sector Weighted
Name Area Average
Rental
per m2
Woolworths Cnr. Princess 3882 Ground R 24.46
Building and floor
Voortrekker retail and
Roads, upper floor
Benoni, offices
Gauteng
Salt Rock Cnr. Shrimp 1017 Developed N/A.
Residential and Hewitt sectional Units
Scheme Roads, Salt residential held for
Rock, Kwa- units resale
Zulu Natal purposes
71, 16th Erf 149, Erf Zoned R 50
Avenue, Portion measuring commercial
Edenvale Number 13, 991 sqm property
Edenvale with a
house
thereon
The Summit University 630 Sectional R 106
Road, title
Westville, offices
Pietermaritzb
urg, Kwa-Zulu
Natal
Property Effective Valuation Liabilities Disposal
Name Date of as at 1 R Price
Acquisition March 2011 R
by CSA and R
cost
Woolworths May 1999 6 700 000 4 680 000 4 166 667
Buildings R4 560 000
Salt Rock September 9 900 000 12 340 000 7 875 000
Residentia 2003
l Scheme R14 087 000
71, 16th August 2008 1 650 000* 1 615 000 1 363 000
Avenue, R1 560 000
Edenvale
The Summit May 2007 7 700 000 3 346 000 7 700 000
R 4 306 000
* Valuation determined by Prop IQ, the online valuation facilitator of
Property24.
5. Computation of disposal value:
The disposal does not relate solely to the above properties, but
includes a number of operating/dormant companies, many of which have
negative shareholders` values.
The disposal value was computed as follows:
R `000
Net assets of disposed entities based on 43 311
published unaudited interim results at 31 August
2011 (including property owning companies)
Less: Provisions, write-offs and impairments to 42 419
achieve fair values
Calculated disposal value 892
6. Pro forma financial effects of the disposal:
The table below summarises the pro forma financial effects of the
management buy-out of non-core subsidiaries. The financial effects are
the responsibility of the directors and have been prepared for
illustrative purposes only, to provide the possible financial effects
as if the disposal had taken place from 01 March 2011 for the period of
6 months until 31 August 2011 for Statement of Comprehensive Income
purposes and as at 31 August 2011 for Statement of Financial Position
purposes. Due to their nature, these pro forma financial effects may
not fairly present Colliers financial position, changes in equity, cash
flow or the results of its operations.
Before Disposal Disposal After % Change
Effects Proceeds
and fair
value
adjustme
nts
Weighted 55,782 55,915 0.24%
average 0
shares in
issue (`000) 133
Basic (665) 2,608 34 1,977 397.29%
Earnings
(`000)
Basic (1.19) 3.53 396.64%
earnings per 4.66 0.06
ordinary
share (cents)
Headline (650) 9,985 1,636.15%
earnings 10,601 34
(`000)
Headline (1.17) 17.85 1,625.64%
earnings per 18.96 0.06
ordinary
share (cents)
Shares in 55,782 55,915 0.24%
issue at 133 0
period end
(`000)
Total assets 305,000 (90,457) 1,250 215,793 (29.25)%
(`000)
Total 182,356 (46,436) - 135,920 (25.46)%
liabilities
(`000)
Net Asset 122,644 79,873 (34.87)%
Value (`000) (44,021) 1,250
Net asset 219.86 143.37 (34.79)%
value per (78.73) 2.24
share (cents)
Net tangible 219.86 143.37 (34.79)%
asset value (78.73) 2.24
per share
(cents)
Assumptions:
i.) The earnings and headline earnings per Colliers share, as set out
in the "Before" column of the table, are based on the published
unaudited interim financial results of Colliers SA Holdings
Limited for the six months ended 31 August 2011 and a weighted
average of 55 782 000 ordinary shares in issue.
ii.) The earnings and headline earnings per Colliers SA Holdings
Limited share, as set out in the "After" column of the table, are
based upon the published unaudited interim financial results of
Colliers for the six months ended 31 August 2011, excluding the
unaudited financial results of the non-core subsidiaries being
disposed of for the six months ended 31 August 2011, and a
weighted average of 55 915 000 ordinary shares in issue and the
assumptions that:
- costs associated with the transaction are estimated to
approximate R450 000;
- additional investment income yielded upon the deferred
disposal price has been included for the six months ended 31
August 2011; this will have a continuing effect on the group
until the disposal price has been settled in twelve month`s
time;
- additional finance costs incurred on the newly acquired bank
overdraft has been included for the six months ended 31
August 2011; this will have a continuing effect on the group
until the overdraft has been extinguished;
- taxation effects arising from additional investment income
and finance costs have been included.
iii.) The net asset value and tangible net asset value per Colliers
SA Holdings Limited share, as set out in the "Before" column
of the table, are based upon the unaudited statement of
financial position of Colliers at 31 August 2011 and 55 782
000 ordinary shares in issue.
iv.) The net asset value and tangible net asset value per Colliers
SA Holdings Limited share, as set out in the "After" column
of the table, are based upon the published unaudited
statement of financial position of Colliers at 31 August
2011, excluding the assets and liabilities of the non-core
subsidiaries being disposed of, and the assumptions that:
- the purchase consideration of R1 250 000 is payable over a
period of twelve months and attracts interest at the prime
interest rate;
- estimated transaction costs associated with the management
buy-out are included in trade and other payables;
- the bank overdrafts in the disposal group are transferred
into the name of Colliers SA Holdings Limited and attract
interest at the prime lending rate.
7. Suspensive conditions
The disposal is subject to the following suspensive conditions:
* the board of directors of CSA passing all such resolutions as may
be required to approve and implement the disposal;
* to the extent necessary, the approval of the disposal by the JSE
Limited.
8. Fairness opinion
As the Purchasers are all executives of CSA, the disposal constitutes a
small related party transaction in terms of section 10.7 of the JSE
Listings Requirements. A small related party transaction is not
subject to shareholder approval, provided that an independent
professional expert has confirmed that the terms of the transaction are
fair as far as shareholders are concerned. Mazars Corporate Finance
(Proprietary) Limited ("Mazars") has been appointed by Colliers, as an
independent expert, to review the terms and conditions of the disposal
and is of the opinion that these terms and conditions are fair to
Colliers shareholders. Mazars has expressed this opinion in writing
and such opinion has been provided to the JSE. The fairness opinion is
available for inspection at the Company`s registered office for a
period of 28 days from the date of this announcement.
9. Withdrawal of cautionary announcement
Following the release of this announcement, caution is no longer
required to be exercised by shareholders when dealing in the company`s
securities.
Johannesburg
30 January 2012
Sponsors
Arcay Moela Sponsors (Pty) Limited
Date: 30/01/2012 08:50:01 Supplied by www.sharenet.co.za
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