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DEC - Decillion Limited - Detailed cautionary announcement regarding amended

Release Date: 13/03/2012 16:02
Code(s): DEC
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DEC - Decillion Limited - Detailed cautionary announcement regarding amended terms of the acquisition by Decillion 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 AMENDED TERMS OF THE ACQUISITION BY DECILLION OF ARDOR PROPERTY HOLDINGS (PTY) LTD ("ARDOR PROPERTY HOLDINGS"), LASHKA 132 LIMITED ("LASHKA") AND OAKWOOD FOURWAYS DEVELOPMENTS (PTY) LTD ("OAKWOOD"), THE CAPITALISATION OF RELATED PARTY LOAN, A PROPOSED SPECIFIC ISSUE OF SHARES FOR CASH AND FURTHER CAUTIONARY ANNOUNCEMENT INTRODUCTION Following the detailed cautionary announcements on 3 August 2011 and 16 September 2011 (and renewal of cautionary announcements on 28 October 2011, 13 December 2011 and 27 January 2012), the board of directors advise that, pursuant to property portfolio changes and receipt of independent property valuations, new agreements have been negotiated and signed for the acquisition of 100% of the shares and claims in Ardor Property Holdings, Lashka and Oakwood. The terms of the various acquisitions are set out below. Shareholders are advised that, due to the fact that Mr Mark Smith was appointed to the board pursuant to the signing of the initial Ardor Property Holdings Memorandum of Understanding and the new acquisition agreements being signed in March 2012, that all the acquisitions are now considered related party acquisitions. ARDOR PROPERTY HOLDINGS ACQUISITION Decillion has entered into an agreement with Ardor Group (Proprietary) Limited dated 08 March 2012 to acquire 100% of the shares and claims of Ardor Property Holdings for a purchase consideration of R92 275 000.00 of which R8 000 000 is payable through the issue of shares at R2.45 and the remaining R84 275 000.00 payable in cash. The equity portion is subject to the placement price for the ordinary shares in the Company as per the final approved circular to Decillion shareholders which circular relates to the acquisition of Ardor, which placement price will not be less than 250 cents per share. In the event that the placement price is less than 250 cents, the shares to be issued to Ardor Group will be issued at the price per share pro rata less than 245 cents per ordinary share as it relates to the lesser placement price. At the effective date, being 1 May 2012, Ardor will own or become the owner of all the shares of the companies holding 100% of the following properties, known as: * Dayizenza Shopping Centre (to be completed) ("Dayizenza") * Furrowlane Hotel and Conference Venue (complete) ("Furrowlane") * Die Werf (complete, but excluding development rights)("Die Werf") * Windmill Mall (to be completed)("Windmill") * Estcourt Retail Mall (to be completed)("Estcourt") * Raslouw Retail Mall (to be completed) ("Raslouw"). The acquisition is subject to the fulfilment of the following conditions precedent: * An amount of R54 875 000 constituting the biggest portion of the first payment will be used by the Ardor Group to complete the land acquisitions by Ardor relating to Windmill and Estcourt. * All current financial facilities, excluding development and related debt to be incurred in relation to the development of Dayizenza, Die Werf, Windmill, Estcourt and Raslouw, will be settled or taken over by the Company as part of the purchase consideration. * The transaction is subject to approval by the shareholders of Decillion within 90 days of signing of the agreement. * Regulatory approval from the JSE and Competitions Commission, if required. * Due diligences by each party to be conducted within 10 days of signing of the agreement. * The transaction is subject to approval by the shareholders of Ardor within 14 days of signing of the agreement. * All existing debts in Decillion will be capitalised and paid or settled in shares after the approval by Decillion shareholders. * The release of all current sureties to Absa Bank for the current exposure of not more than R4 000 000. The valuation of the property portfolio is R650 950 000, less R4 000 000 debt and R554 575 000 development cost), which equates to R92 275 000. LASHKA ACQUISITION Decillion and Lashka entered into an agreement dated 9 March 2012 with Sciofin (Proprietary) Limited for the acquisition of 100% of the shares and claims in Lashka for a purchase consideration of R239 500 000. The purchase price is payable as follows: * R26 571 002.50 by the issue of 10 845 307 shares in Decillion at R2.45 per share; and * the remaining R212 928 997.50 payable in cash. Lashka is the owner of the following properties via subsidiaries: - Bergville Mall (Portion 2 of Erf 45, Bergville, Kwa-Zulu Natal) - Langverwacht Centre (Erf 12431 Kuils River) - Jean Village Shopping Centre (Erf 393, Die Hoewes Extension 105, Centurion) - Ryneveld Lifestyle Centre (Remaining extent of Erf 1149, Pierre van Ryneveld extension 2) - Uitenhage Regional Mall to be developed (Erf 25332, Uitenhage) Decillion will take over the current bank liabilities to a maximum of R111 000 000. The Lashka agreement is subject to the fulfilment of the following suspensive conditions: * Sufficient cash to be raised by Decillion on or before the implementation date. * The completion by Decillion of a due diligence investigation in respect of Lashka; * The approval of this acquisition by the shareholders of Decillion before 31 May 2012. The valuation of the property portfolio is R601 700 000, less R111 000 000 debt and R265 000 000 development cost, which equates to the purchase price of R239 500 000. OAKWOOD ACQUISITION Decillion entered into an agreement dated 9 March 2012 for the acquisition of 100% of the shares and claims in Oakwood by Decillion for a purchase consideration of R31 300 000 payable in cash. The claims in the Company, excluding the sale claims, shall not be more than R47 000 000. The vendors of Oakwood are Real Time Investments (20%), Winkfield (20%), DC Gadney (ID 6112295092089) (20%) and Marble Gold (40%). The Oakwood acquisition is subject to the fulfilment of the following suspensive conditions: * the completion by Decillion of a due diligence investigation in respect of Oakwood; * the approval of this acquisition by the shareholders of Decillion before 31 May 2012; and * sufficient cash being raised by Decillion on or before the implementation date (date after all suspensive conditions have been met). The valuation of the property portfolio is R78 300 000 (less R47 000 000 debt), which equates to the purchase price of R31 300 000. ARDOR, LASHKA AND OAKWOOD PROPERTY PORTFOLIO Details on the property portfolio are being finalised and will be announced in due course. The underlying properties have been independently valued by an external valuer, namely Quadrant Properties (Proprietary) Limited, which company is busy finalising its reports for inclusion in the circular to shareholders. PROPOSED CAPITALISATION OF RELATED PARTY LOAN Shareholders will be requested to approve the capitalisation of the related party loan with Sciofin through the issue of 8 500 000 shares at R1.00 per share in order to further strengthen the balance sheet of Decillion. PROPOSED SPECIFIC ISSUE OF SHARES FOR CASH AND PROPOSED WAIVER OF AN OFFER It is the intention of the company to issue up to 320 000 000 new shares in Decillion at R2.50 in order to raise up to R900 000 000 to facilitate the above acquisitions as well as the development of the retail centres acquired as part of the acquisitions. The minimum capital to be raised has been set at R330 000 000. Due to the wide range of possible outcomes for new investors, shareholders will be asked to waive a mandatory offer in the event that any new investor or investors acquire 35% or more pursuant to the specific offer. In the event that shareholders do not waive the mandatory offer, then the new investors will be offered the opportunity to reduce their subscription for shares in Decillion. RESPONSIBILITY STATEMENT The board of directors accepts responsibility for the information in relation to the proposed waiver of an offer and, that to the best of their respective knowledge and belief, the information is true and does not omit anything likely to affect the importance of the information. REVERSE TAKEOVER Shareholders are cautioned that the implementation of the proposed acquisition and specific issue of shares for cash 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 AND PROFIT FORECAST The pro forma financial effects and profit forecast are in the process of being finalised and will be published in due course. DOCUMENTATION AND SALIENT DATES A circular to shareholders detailing the terms of the acquisitions, the capitalisation of related party loans, specific issue of shares for cash, reverse takeover, and other associated transactions, incorporating revised listing particulars is being drafted and will be distributed to shareholders in due course. Salient dates shall also be announced in due course. FURTHER CAUTIONARY ANNOUNCEMENT Since the property portfolio information and pro forma financial effects of the above-mentioned acquisitions, specific issue of shares for cash and associated transactions 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 13 March 2012 SPONSOR Arcay Moela Sponsors (Proprietary) Limited Date: 13/03/2012 16:02:22 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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