Wrap Text
ISSUE OF SHARES BY BOSCHENDAL PROPRIETARY LIMITED, RIGHTS OFFER IN BOSCHENDAL AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
JCI LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1894/00854/06
Share code: JCD
ISIN: ZAE0000039681 (Suspended)
("JCI" or "the Company")
ISSUE OF SHARES BY BOSCHENDAL PROPRIETARY LIMITED (“BOSCHENDAL”) TO CANOMBYS
LIMITED (“CANOMBYS”), ADVANCE OF SHAREHOLDER LOAN BY CANOMBYS TO
BOSCHENDAL, EQUALISATION OF SHAREHOLDER LOANS IN BOSCHENDAL, RIGHTS OFFER IN
BOSCHENDAL AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
JCI is pleased to announce that Boschendal, a 62.67% subsidiary of JCI Investment Finance Proprietary
Limited (“JCIIF”) which is in turn a wholly-owned subsidiary of JCI, has entered into a transaction
agreement (“Transaction Agreement”) with Canombys whereby:
Boschendal will issue 769,608 ordinary shares to Canombys for an aggregate value of R76.96
(“the Subscription”). The Subscription will result in JCI’s indirect interest in Boschendal reducing
to 49.0%. Canombys is about to acquire IFA Hotels & Resorts Limited’s (“IFA”) 37.33% interest in
Boschendal (“IFA Acquisition”) which acquisition was announced by IFA on SENS on 20 July
2012 (and which is conditional, inter alia, on the successful conclusion of the transactions
outlined in the Transaction Agreement);
Canombys will advance R79,999,923.04 to Boschendal as a shareholders loan (“the
Shareholders Loan”);
JCIIF and Canombys’ shareholder loans to Boschendal will be equalised such that Canombys
and JCIIF shall hold 51% and 49% respectively of the shareholder loans owing by Boschendal to
its shareholders (“the Equalisation”); and
Boschendal shall effect a rights offer to its shareholders to raise R20,000,000.00 of additional
capital (“the Rights Offer”)
(collectively the “Transactions”).
The Transaction Agreement stipulates that the Transactions form one indivisible transaction and that
Canombys would not conclude any of the underlying transactions without concluding all of the other
transactions.
The Transactions are subject to the conditions precedent outlined in paragraph 2.7 below.
2. Overview of the Transactions
2.1. Description of Boschendal
Boschendal is one of the oldest wine farms in South Africa with a French viticultural heritage
dating back to 1685. Boschendal is set on a 2,240 hectare estate between Stellenbosch and
Franschhoek in the Western Cape, and consists of vineyards which cover an area of 254
hectares, extending for six kilometres along the slopes of the Groot Drakenstein Mountain
towards the Dwars River and the slopes of the Simonsberg Mountain.
Boschendal is currently the site of a proposed mixed-use development.
2.2. Rationale for the Transactions
Boschendal is currently operating at a loss and is in need of a cash injection to provide the
necessary working capital in order to fund its ongoing operations. The Transactions provide
Boschendal with cash required to meet its operational cash flow requirements and to invest in
infrastructure in order to allow the marketing and sale of Phase 1 of Boschendal’s proposed
mixed-use development to progress.
The Transactions also relieve JCI of the burden of financing Boschendal’s ongoing operational
expenditure and will allow the Boschendal development to progress to a stage where it is
materially self-funding.
2.3. The Subscription
Following the fulfillment of the conditions precedent outlined in paragraph 2.7, Boschendal will
issue 769,608 ordinary shares to Canombys in exchange for an aggregate amount of R76.96
which equates to an issue price per share of R0.0001.
2.4. The Shareholder Loan
Following the fulfillment of the conditions precedent outlined in paragraph 2.7, Canombys will
advance R79,999,923.04 to Boschendal as a shareholders loan. The Shareholder Loan will
accrue interest at Prime less 1 percent.
2.5. The Equalisation
In terms of the Equalisation, JCIIF and Canombys’ shareholder loans to Boschendal will be
equalised such that Canombys and JCIIF shall hold 51% and 49% respectively of the
shareholder loans owing by Boschendal. In order to effect the Equalisation, JCIIF will sell and
cede approximately R43,496,625.87 of its shareholder loans to Canombys for R1.00. This will
result in shareholder loans owing by Boschendal to Canombys and JCIIF after the Equalisation
of approximately R286,776,454.91 and R276,374,750.13 respectively.
2.6. The Rights Offer
In terms of the Transaction Agreement, Boschendal will effect a rights issue to raise additional
capital funding of R20,000,000.00 or such other amount as may be agreed to by JCIIF,
Canombys and Boschendal subject to the following:
The Rights Offer will be effected at a subscription price of R0.0001 per share to be
offered proportionately to all shareholders of Boschendal;
The new ordinary shares to be allotted in terms of the Rights Offer will rank pari passu
with all previously issued shares of Boschendal;
Each shareholder who wishes to follow its rights shall be obliged to give Boschendal
written notice of its acceptance by no later than 10 business days following the date that
the Boschendal board of directors agrees to implement the Rights Offer or such
extended date as may be required by any shareholder of Boschendal should such
shareholder by obliged to obtain any regulatory approval to implement acceptance of
the Rights Offer;
Canombys and JCIIF have agreed to subscribe for shares to the value of R10,200,000
and R9,800,000 respectively; and
Should JCIIF fail to subscribe for its proportionate number of shares in terms of the
Rights Offer, Canombys shall have the right to subscribe for those shares for which
JCIIF does not subscribe.
2.7. Conditions precedent
The Transactions are subject to the fulfillment or waiver of the following conditions precedent
within 45 business days after the signature date of the Transaction Agreement, being 2 August
2012:
a) The approval of the Financial Surveillance Department of the South African Reserve
Bank being obtained to give effect to and implement the IFA Acquisition and the
Transactions;
b) All other regulatory approvals, consents and shareholder approvals being obtained to
give effect to the Transactions;
c) Canombys completing, to its satisfaction, a due diligence investigation into the affairs of
Boschendal and its underlying businesses, assets and liabilities;
d) JCIIF and Canombys entering into a shareholders’ agreement and adopting a new MOI
and the shareholders’ agreement becoming unconditional (save for any condition
therein requiring that the Transaction Agreement become unconditional);
e) The IFA Acquisition becoming unconditional in all respects;
f) Boschendal’s bankers consenting in writing to the implementation of the IFA Acquisition
and the Transactions, to the extent legally required;
g) Boschendal’s bankers providing written confirmation, to the satisfaction of Canombys,
that:
they shall not call for repayment of the loan owing by Boschendal to them for a
period of at least 90 days from the date of signature of the Transaction
Agreement, being 2 August 2012; and
they, or such other third party financier as may be acceptable to Canombys, will
advance a loan or facility to Boschendal for at least R125 000 000, or such
lesser amount as Canombys may in its discretion determine, for a period of not
less than 3 years from the expiry of the 90 day period referred to above, and on
such terms and conditions as may be acceptable to Canombys.
Each of the conditions precedent set out in paragraphs 2.7 (c) and (e) to (g) (inclusive) have
been stipulated for the benefit of Canombys, and may be waived by Canombys by written notice
delivered to JCIIF and Boschendal. The condition precedent set out in paragraph 2.7 (d) is for
the benefit of Canombys, Boschendal and JCIIF and may be waived by written agreement
between them. The conditions precedent set out in paragraphs 2.7 (a) and (b) are of a
regulatory nature and may not be waived.
3. Circular to JCI shareholders
In terms of paragraph 9.5 read with paragraph 3.35 of the JSE Listings Requirements, the Transactions
have been categorised as a Category 1 transaction. A circular, containing a notice of general meeting, will
be sent to JCI shareholders in due course.
4. Financial effects and renewal of cautionary
The pro-forma financial effects based on JCI’s unaudited NAV statement are in the process of being
finalised, and as a result, shareholders are advised to continue to exercise caution when dealing in the
company’s securities until a further announcement is made. Shareholders are also reminded that JCI is in
the process of finalising its 2011 and 2012 annual financial statements.
Johannesburg
7 August 2012
Sponsor: Investec Bank Limited
Legal adviser to JCI: Eversheds
Legal adviser to Canombys: Edward Nathan Sonnenbergs
Date: 07/08/2012 03:15:00 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.