QPG - Quantum Property Group Limited - Business rescue application and renewal

QPG - Quantum Property Group Limited - Business rescue application and renewal  
of cautionary                                                                   
QUANTUM PROPERTY GROUP LIMITED                                                  
Incorporated in the Republic of South Africa                                    
(Registration number 1984/002788/06)                                            
Share code: QPG ISIN:ZAE000125647                                               
("QPG" or "the Company")                                                        
BUSINESS RESCUE APPLICATION AND RENEWAL OF CAUTIONARY                           
1    Background to the business rescue application and resolution to begin      
    business rescue proceedings                                                 
    The board of directors of QPG ("the Board") is of the view that its wholly- 
owned subsidiary, A Million Up Investments 105 Proprietary Limited ("AMU"), 
    is currently financially distressed, as contemplated in Chapter 6 of the    
    Companies Act, 71 of 2008, as amended ("the Companies Act").                
    The decision taken by the board of directors of AMU to place AMU under      
business rescue is as a consequence of the required payment to Absa Bank    
    Limited ("ABSA") in the amount of R581 420 062.04. Such amount has been     
    called up by ABSA in terms of a development bond provided by ABSA to AMU,   
    which development bond was registered during July 2006, and which AMU is    
currently not in a position to repay.                                       
    The boards of directors of AMU and QPG ("the Boards") are of the view that  
    a reasonable prospect to rescue AMU from its current financial difficulties 
    exist. In addition, the Boards are confident as to the trading performance  
and long-term prospects of AMU`s principal asset, being the `15 on Orange`  
    hotel.  Business rescue is being sought principally in relation to          
    development debt. Based on this view, on Monday, 4 June 2012 the board of   
    AMU resolved that business rescue proceedings commence, and that AMU be     
placed under supervision in terms of Section 129 of the Companies Act ("the 
    Resolution"). The Boards believe that the implementation of business rescue 
    proceedings will afford the executive directors of AMU the opportunity to   
    develop and implement a business rescue plan in a manner that will optimise 
the likelihood of AMU continuing in existence as a going concern.           
2    Filing of the Resolution                                                   
    The Resolution was filed with the Companies and Intellectual Property       
    Commission ("CIPC") on Wednesday, 6 June 2012 and the effective date of     
commencement of the business rescue proceedings is confirmed as Wednesday,  
    6 June 2012, in accordance with Section 132(1)(a)(i) of the Companies Act.  
3    Application initiated by ABSA                                              
    An application which has been initiated by ABSA, will be heard in the       
Western Cape High Court, to set aside the resolution taken by the board of  
    AMU, to voluntarily commence business rescue proceedings and to place AMU   
    under supervision, thus declaring such resolution to be of no force or      
    effect ("Application"). The board of AMU intends to oppose the Application. 
The Application is expected to be heard on Friday, 15 June 2012.            
    If the Application is successful, AMU will be discharged from business      
    rescue. If the Application is unsuccessful, the business rescue of AMU will 
    continue. The Boards are of the view that a reasonable prospect to rescue   
AMU exists, and that AMU can be restored to a position where it can trade   
    on a successful basis.                                                      
4    Notice of the Resolution                                                   
    AMU is in the process of giving notice of the Resolution, in the prescribed 
manner, to all affected persons ("Notice"). In terms of Section 129(3)(a)   
    of the Companies Act, such Notice includes copies of the Resolution and a   
    sworn statement of facts relevant to the grounds upon which the Resolution  
    was founded.                                                                
5    Renewal of cautionary announcement                                         
    Subsequent to the cautionary announcement released on SENS on 25 May 2012,  
    shareholders are advised to continue to exercise caution when dealing in    
    the Company`s securities until further information regarding the            
aforementioned matters is provided.                                         
Sandton                                                                         
13 June 2012                                                                    
Designated Adviser                                                              
Merchantec Capital                                                              
Date: 13/06/2012 17:49:02 Supplied by www.sharenet.co.za                     
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