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BONATLA PROPERTY HOLDINGS LIMITED - Detailed Cautionary Announcement in relation to share swap agreements

Release Date: 05/05/2014 07:05
Code(s): BNT     PDF:  
Wrap Text
Detailed Cautionary Announcement in relation to share swap agreements

BONATLA PROPERTY HOLDINGS LIMITED
(Registration number 1996/014533/06)
Share code: BNT ISIN: ZAE000013694
(”Bonatla” or “the Company”)


DETAILED CAUTIONARY ANNOUNCEMENT IN RELATION TO SHARE SWAP
AGREEMENTS IN RESPECT OF THE DEVELOPMENT OF THE KIMBERLEY
DIAMOND AND JEWELLERY HUB AND THE LINCOLN MEADE AFFORDABLE
HOUSING ESTATE

Shareholders are advised that the Company has entered into two separate Share Swap
Agreements between Bonatla and Namavect Proprietary Limited (“Namavect”) and the
Inqaba Trading Trust (“Inqaba”) respectively. These projects have been introduced to
Bonatla pursuant to the socio economic upliftment and development projects undertaken by
Bonatla.

Full details of each of the Share Swap Agreements are set out below:

KIMBERLEY DIAMOND AND JEWELLERY HUB

Introduction
A sale of shares agreement has been signed between Bonatla Property Holdings Limited and
Namavect (Pty) Ltd (“Namavect”), in terms of which Bonatla will acquire from Namavect its
75.1% stake in the special purpose vehicle ("SPV") formed between Namavect and the
Northern Cape Department of Economic Development and Tourism ("NC-DEDAT") or its
nominee for the purposes of developing the Kimberley Diamond and Jewellery Hub.

Objectives and Scope of the Project

The NC-DEDAT has committed to:

-   Secure about 67 hectares of land in the close vicinity of the Kimberley Airport for the
    development of the Kimberley Diamond Jewellery Hub for leasing to the SPV. This shall
    be a 99 year lease or any long lease as agreed to by the parties.
-   Seek to have this designated area rezoned into a Special Economic Zone in terms of tax
    incentives, duty free trade area and incentives.
-   To explore De Beers availing its adjacent land to facilitate possible future expansion.
-   Fund the required infrastructure for the Hub like bulk services and access roads.
-   To fund and facilitate meetings of the SPV and requested Parties to develop a Business
    Plan for the Hub.
-   To arrange for visits to existing global Hubs to enable the SPV to benchmark globally.
-   Procure all the legislative permissions required for the Hub to operate.

Terms of the sale of shares agreement
In terms of the agreement, Namavect has agreed to cede and transfer its shareholdings to and
in favour of Bonatla, who shall then assume all the obligations of Namavect. This equates to
a cession of lease hold value of R250 000 000. Namavect will continue to be appointed as
the Development Manager.

Consideration payable
Namavect has agreed to swop 100% of its share equity with Bonatla in exchange for
416 666 667 ordinary shares issued at an issue price of 60 cents per ordinary share. This will
result in Bonatla holding the 75.1% stage in the SPV.

Facilitation and success fee
Bonatla has agreed to pay Namavect a fee of 0.2% of the transaction value of R250 000 000
within 14 days of the effective date.

Effective date
The effective date of the Share Swap Agreements is the date on which the land lease is signed
and notarially registered by the SPV and NC-DEDAT or any other party owning the land
(termed the landlord).

Conditions precedent
The proposed transaction is subject to the following conditions precedent:

- the approval of the board of Bonatla by 30 May 2014; and
- any requisite statutory approvals including JSE, TRP and Competition Commission
  approvals, where applicable.

The parties have agreed to extend this agreement should it be so required in order to give
effect to the above.

LINCOLN MEADE AFFORDABLE HOUSING ESTATE

Introduction
Lincoln Meade Park (Pty) Ltd has acquired the rights to develop 1214 residential units in
Pietermaritzburg through a Land Availability Agreement it has concluded with the Msunduzi
Municipality. The extent of the land is 35.4924 Ha and is made up of the following:

Erf 31 New England measuring 8.5718 Ha
Rem of Erf 21 New England measuring 11.0116 Ha
Erf 19 New England Measuring 7.9545 Ha
Erf 18 New England measuring 7.9545 Ha

Terms of the sale of shares agreement
In terms of the agreement, the Company has acquired 75.1% of Lincoln Meade Park (Pty)
Limited (“Lincoln Meade Park”), (Registration No. 2012/033142/07). This was achieved by
buying the 75.1% of shares owned by Inqaba Trading Trust (“Inqaba”) in Lincoln Meade
Park.

The funding of the project will be based on pre sales and the issue of shares will take place
when the development funding is obtained. There is no funding or risk exposure to Bonatla.

Objectives and scope of Project and the Commercial Structure
The objective is to develop Lincoln Meade Place as per the approved DFA. This will then be
developed by a Lincoln Meade Park (Pty) Limited owned which is owned by Mr Sipho Shezi
Trust (or his nominee) (24.9%) and Inqaba (75.1%). Inqaba has acquired 75.1% of Lincoln
Meade Park.

Inqaba has acquired the development management rights in the project. Inqaba has agreed to
share this with Mr Shezi, allocating a third of the total Development Management fee of the
project to him.

Inqaba has also acquired the right to cede and assign all its rights and obligations as contained
herein to a listed property company.

Inqaba has committed to:
- Provide its property Development Expertise and experience to the partnership to acquire
   the development bond;
- Assemble and appoint a competent professional team; and
- Provide its financial capability to stand behind the project.

Cession of Ownership
Inqaba has agreed to cede all its rights in the Lincoln Meade Park, save for the rights to the
Development Manager, to Bonatla who shall then assume all the obligations of Inqaba.
Bonatla will then own 75.1% of shares in Lincoln Meade Park.

Swapping of Shares
Inqaba has agreed to swap 100% of its share equity in Lincoln Meade Park to Bonatla in
exchange for 120 000 000 ordinary shares in Bonatla.

Consideration payable
The net consideration is R60 000 000 and will be discharged by the issue of 120 000 000
ordinary shares in Bonatla at an issue price of R0.50 (50 cents) per share.

Facilitation and success fee
It has been agreed that commission is payable to African Dune Investments 251 (Pty) Ltd as
the introducer of the parties. This amount will be determined as agreed between the parties.

Effective date
The effective date of the Share Swap Agreement is the date that the development bond /
finance for the project is approved unconditionally.

Conditions precedent
The proposed transaction is subject to the following conditions precedent:

- the approval of the board of Bonatla by 30 May 2014; and
- any requisite statutory approvals including JSE, TRP and Competition Commission
  approvals where applicable.

The parties have agreed to extend this agreement should it be so required in order to give
effect to the above.

This project is of regional and national interest and has already attracted interest from
international investors.

Pro forma financial effects
The pro forma financial effects will be announced in due course.
Renewal of cautionary announcement

Shareholders are advised to continue to exercise caution with regard to the following:

Pro forma effects still to be announced:
-    Disposal of Bishops Court announced on 17 May 2013;
-    Disposal of Austin Crossing announced on 17 May 2013;
-    Acquisition of an increased shareholding in CPTech from related parties announced on
     17 May 2013;
-    Disposal of Chambers announced on 21 February 2014;
-    Disposal of Tropical 320 announced on 21 February 2014;
-    Disposal of Tropical 334 announced on 21 February 2014;
-    Share Swap Agreement for Kimberley Diamond and Jewellery Hub announced as
     above; and
-    Share Swap Agreement for Lincoln Meade Park announced as above.

On-going discussions and/or negotiations:
-   Acquisition of 75.1% of Guilder Investments Proprietary Limited;
-   Acquisition of 75.1% in a special purpose vehicle to be formed for the Jozini
    acquisition; and
-   Acquisition of Ruitersvlei.

Circular to shareholders
A circular to shareholders outlining the above Share Swap Agreements will be published in
due course.

Shareholders are reminded that the JSE investigations have still to be concluded per the
announcements published on SENS on 14 November 2012, 24 April 2013, 5 July 2013,
8 July 2013 and 21 February 2014 respectively, and accordingly shareholders are advised to
continue to exercise caution in dealing in their shares until full announcements in respect of
this investigation and all of the acquisition and disposal transactions are made.


By order of the board
2 May 2014


Sponsor
Arcay Moela Sponsors Proprietary Limited

Date: 05/05/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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