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Disposal of properties, Acquisition of additional shares, Renewal of cautionary and Withdrawal of cautionary
BONATLA PROPERTY HOLDINGS LIMITED
(Registration number 1996/014533/06)
Share code: BNT ISIN: ZAE000013694
(”Bonatla” or “the Company”)
DISPOSAL OF BISHOPS COURT PROPERTIES PROPRIETARY LIMITED
(“BISHOPS COURT”) AND AUSTIN CROSSING PROPERTIES PROPRIETARY
LIMITED (“AUSTIN CROSSING”) (“THE DISPOSALS”), ACQUISITION OF
ADDITIONAL SHARES IN CARBON PROCESSING AND TECHNOLOGIES
PROPRIETARY LIMITED (“CPTECH”), RENEWAL OF CAUTIONARY
ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. THE DISPOSAL OF BISHOPS COURT
1.1 RATIONALE FOR THE DISPOSAL
Bishops Court owns a property that is currently
categorised as a B Grade property. The lease with the
major tenant expires in September 2015. It is expected
that the lease rental level will reduce in addition to a
possible requirement for additional spend on a tenant
installation cost to upgrade the premises. The company
has received an offer at a current yield of 10.75% and
thus the directors deemed it prudent to dispose of
Bishops Court.
1.2 TERMS OF THE DISPOSAL
The total cash consideration for the disposal of the
shares and loan accounts in Bishops Court is R23 000 000
less indebtedness of approximately R5 000 000, giving a
net consideration of approximately R18 000 000 in cash.
The net consideration will be used to settle group
liabilities and to procure capital and working capital to
CPTech.
The purchaser is Pearl Star Proprietary Limited, which
entity is not a related party to Bonatla.
The effective date of transfer will be deemed to be
1 January 2013.
1.3 PROPERTY SPECIFIC INFORMATION
PROPERTY NAME ADDRESS LOCATION SECTOR
Bishops Court Units 3-8, Hillcrest, Offices
Bishops KwaZulu Natal
Court, corner
of Delamore
and Warrior
Roads,
Hillcrest
WEIGHTED RENTABLE AREA VALUATION ACQUISITION
AVERAGE (M2) PRICE
RENTAL PER M2
R102 2 070 R22 500 000 R22 000 000
2 DISPOSAL OF AUSTIN CROSSING
2.1 RATIONALE FOR THE DISPOSAL
The second largest tenant advised that it would not be
renewing its lease at the end of April 2013 and the
premises also required external renovation. Bonatla
furthermore anticipated difficulty in re-letting this
portion of the building due to problems with the
availability of parking and the board therefore deemed it
prudent to dispose of the building in order to minimise
the adverse financial effects that retaining it would
have had on the company. The yield on the sale of the
property is 8.5%.
2.2 CONSIDERATION FOR THE DISPOSAL
The total cash consideration for the disposal of Austin
Crossing shares and loan account is R5 800 000. The
consideration for the disposal shall be paid by means of
satisfying the existing short term loan over the property
in the amount of R2 500 000 and the balance in cash. The
disposal will be with effect from 23 January 2013. The
net consideration will be used to settle group
liabilities and to procure capital and working capital to
CPTech. The purchaser is Zariba Properties Proprietary
Limited, which party is not a related party to Bonatla
2.3 PROPERTY SPECIFIC INFORMATION
PROPERTY NAME ADDRESS LOCATION SECTOR
Austin Corner of Klerksdorp Retail
Crossing Austin and
Ametis
streets,
Klerksdorp
WEIGHTED RENTABLE AREA VALUATION ACQUISITION
AVERAGE (M2) PRICE
RENTAL PER M2
R85 672 R5 000 000 R7 000 000
3 ACQUISITION OF A FURTHER SHAREHOLDING IN CPTECH
(“Acquisition”)
3.1 INTRODUCTION
CPTech is a subsidiary of Bonatla but is not a major
subsidiary as defined in the JSE Listings Requirements.
The CPTech factory, warehouse, offices, plant and the
property on which it is located are owned by Bonatla.
3.2 CONSIDERATION FOR THE ACQUISITION
Bonatla has acquired a further 25% interest in CPTech and
its loan account from I Dube Trust for R2 000 000 in cash.
Being a major shareholder in a subsidiary, the trust is a
related party as defined in the JSE Listings Requirements.
Accordingly shareholder approval of, and a fairness
opinion on, the Acquisition will be required to be
included in the circular to shareholders.
In addition, in order to strengthen the balance sheet of
CPTech, CPTech undertook a rights offer to existing
shareholders in the amount of R23 000 000 on 1 March 2013.
Bonatla followed its rights by the capitalisation of its
loan in the amount of R17 480 000. The balance of the
CPTech minority shareholders did not follow their rights
and Bonatla accordingly took up additional rights of
R5 520 000 by a further capitalisation of its loan. This
increased Bonatla’s shareholding in CPTech to 90%.
3.3 RATIONALE
CPTech is the largest producer in the Southern Hemisphere
of activated carbon and also produces charcoal and oil
absorbent products, all from biomass products. The
barriers to and costs of entry into the activated carbon
market are substantial and the nature of the products
produced make it a high margin business. There is strong
and growing local and global demand for these products.
Bonatla is of the opinion the CPTech is well positioned to
make a substantial contribution to the profits of the
group in the future and as the other shareholders were not
in a position to provide the further capital required for
the expansion of the factory, Bonatla agreed to provide
the required capital.
4 THE PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS
Pro forma financial effects will be announced as soon as
practicable after the announcement of the Company’s results
for the year ended 31 December 2012.
5. CONDITIONS PRECEDENT AND DOCUMENTATION
The disposal of Bishops Court and Austin Crossing and the
acquisition of the increased shareholding in CPTech
(together, “the transactions”) are subject to the approval
of Bonatla shareholders in general meeting.
The Johannesburg Stock Exchange (“JSE”) is, however, still
concluding its investigation into the potential restatement
of the Company’s annual financial statements for the year
ended 31 December 2009 and the JSE’s Issuer Regulation
Division has accordingly advised that it will not review
the previous acquisition circular and associated
transactions nor any further circulars until the
investigation has been concluded. The board is, however,
firmly of the opinion that the transactions are in the best
interests of the Company and thus, in order to enable them
to proceed, the Company will, in the interim, be seeking
irrevocable undertakings from existing shareholders to vote
in favour of these transactions. It is anticipated that
the JSE required information relating to these transactions
will be included in a revised submission of the circular to
shareholders that was submitted to the JSE Regulation
Division in mid-2012.
6. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that negotiations are still on-
going in relation to the acquisition of 100 000 m2 at the
Durban Point Development and the company continues to
pursue discussions on Ruitersvlei and the Guilder
Investments Proprietary Limited transactions.
In addition, the Company remains in negotiations for the
acquisition of 75.1% in the development known as Jozini as
initially announced on 29 June 2012.
Furthermore, pro forma financial effects of the disposals
and the CPTech Acquisition are required to be published.
Accordingly, shareholders are advised to continue to
exercise caution in dealing in their shares until a further
announcement is made.
7. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders were advised on 22 May 2012 and 29 June 2012
that the Company had previously entered into negotiations
for the introduction of an additional BEE partner and the
acquisition of additional properties into the group. These
negotiations were not pursued further by Bonatla.
By order of the board
17 May 2012
Sponsor
Arcay Moela Sponsors
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