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VISUAL INTERNATIONAL HOLDINGS LIMITED - Detailed cautionary announcement - MOU in terms of a development agreement for Reebokfontein Village

Release Date: 31/10/2014 12:46
Code(s): VIS     PDF:  
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Detailed cautionary announcement - MOU in terms of a development agreement for Reebokfontein Village

VISUAL INTERNATIONAL HOLDINGS LIMITED
(Formerly Presto Financing Proprietary Limited)
(Registration number 2006/030975/06)
(“the Company” or “Visual”)
ISIN Code: ZAE000187407 Share code: VIS

DETAILED CAUTIONARY ANNOUNCEMENT - MEMORANDUM OF UNDERSTANDING (“MOU”) IN TERMS OF A 
DEVELOPMENT AGREEMENT FOR REEBOKFONTEIN VILLAGE


Shareholders are advised that Visual has entered into an MOU for the acquisition in terms of a development
agreement of approximately 83 hectares in Klerksdorp (“Reebokfontein Village”). With Reebokfontein
Village Visual intends to replicate in Klerksdorp its Stellendale Village Cape Town suburb, by developing
approximately 2,000 houses, apartments and lifestyle suites for the middle income group.

The necessary approvals have been granted for the development of the property, but Visual wishes to have
these changed. The sellers will be responsible for obtaining the various written approvals for the
development of Reebokfontein Village in accordance with directives provided by Visual (“the Approvals”),
whilst Visual will be responsible for the overall concept plans for the project as well as the site development
plan. These approvals are expected to be obtained within one year of signing of the development
agreement. Visual will be entitled to raise property development finance against the property and will be
responsible for registration costs for such facility. The sellers will release property or building opportunities
for transfer on payment by Visual of a release consideration based on set formulas, termed release
considerations. Payment of release considerations will be part of, and be deducted from the purchase price
of the property.

The MOU provides various options for Visual to purchase the property at various prices and dates
throughout the development of the project, which will be embodied in a separate agreement, and which will
be signed in conjunction with the signature of the development agreement. However, Visual will be
mandated to develop the property before an option is exercised. The various options to acquire the property
are set out below:
a)    Purchase price of R12 million, plus VAT, on or before 31 December 2015;
b)    Purchase price of R15 million, plus VAT, before Date 1, adjusted by any release considerations paid,
      where applicable;
c)    Purchase price of R17 million, plus VAT, after three years from Date 1 (“Date 2”), adjusted by any
      release considerations paid, where applicable;
d)    Purchase price of R23.65 million, plus VAT, within 3 years from Date 2 (“Date 3), adjusted by any
      release considerations paid, where applicable;
e)    In the event that the options are not exercised above, Visual will have the option to acquire the
      property for R7 million more plus VAT above R17 million plus VAT for every three years after Date 3,
      and as adjusted for release considerations.

Date 1, referred to above, in terms of the MOU will be eight months from the date of obtaining the
Approvals, from which date Visual will take occupation of the property and pay rates and taxes to the
municipality.

The MOU is subject to two suspensive conditions in Visual’s favour, in that 4 months from the date of
signing of the development agreement, Visual will satisfy itself that:
a)    The municipality supports the granting of the rights as contemplated in terms of the MOU;
b)    One or more of the mines and/or other large employers in the vicinity of Klerksdorp have agreed to
      enter into acceptable lease agreements with Visual to rent accommodation for sufficient numbers of
      their personnel, and/or have agreed to provide acceptable financial support to sufficient numbers of
      their personnel to acquire their own accommodation in Reeboksfontein Village.

The parties are commencing with the preparation of the development agreement. A further announcement
will be made in due course once the suspensive conditions have been met.

By order of the board.

Johannesburg
31 October 2014

Sponsor
Arbor Capital Sponsors Proprietary Limited

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