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VISUAL INTERNATIONAL HOLDINGS LIMITED - Announcement regarding the disposal of a portion of the rental units in Stellendale

Release Date: 22/04/2016 07:10
Code(s): VIS     PDF:  
Wrap Text
Announcement regarding the disposal of a portion of the rental units in Stellendale

VISUAL INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/030975/06)
(“Visual”)
ISIN Code: ZAE000187407 Share Code: VIS


ANNOUNCEMENT REGARDING THE DISPOSAL OF A PORTION OF THE RENTAL UNITS IN
STELLENDALE


Introduction
Shareholders are advised of the disposal of 20 units in Stellendale by Visual International
Proprietary Limited (“the Company”) to Nikitas Vontas or his nominee (“the Purchaser”) for a
consideration of R10 million (“the Disposal”). The effective date of the transaction will be the
date of transfer of the units into the name of the Purchaser.

Rationale for the Disposal
The board of Visual has decided to dispose of non-core assets in order to focus on the
development of its larger projects and improve its cash flow position.

Terms of the Disposal
The total consideration for the Disposal of the units is R10 million, plus VAT at 0%, payable in
cash by the Purchaser to the Company on transfer of the property. The agreement provides
for the advance of R3.3 million to the Company, of which R1m has already been received
and the balance of R2.3 million is payable no later than 26 April 2016.

If VAT becomes payable at a rate other than 0%, the Purchaser shall be liable of the
payment of VAT on the purchase price, and the Company shall consequently be entitled to
recover such VAT from the Purchaser in addition to the purchase price above.

Property Specific Information
Property specific information is detailed below:

 PROPERTY NAME                              ADDRESS                LOCATION             SECTOR
 20 units in Stellendale               Kuils River,            Western Cape        Residential
                                          Cape Town

 RENTABLE AREA                     WEIGHTED AVERAGE          TENANT PROFILE           PROPERTY
                               RENTAL PER MONTH PER                                  VALUATION
                                                 M2
 1305m2                                      R82.75      Individual tenants        R12 030 000


Financial Information
The purchase consideration is R10 million and no commission is payable.

Impact on statement of comprehensive income
The units which are being disposed of generate an estimated annual rental income of
R1 367 400. This income will no longer be earned by the Company. Similarly, the associated
expenses, bond costs and other finance charges of R515 576 and R579 264 respectively will
no longer be incurred by the Company. The net income after taxation relating to the 20
units for the six months ended 31 August 2015 amounted to R51 006.
The property is valued in Visual’s financial statements at R12.03 million, based on an
independent valuation by Adval Valuation Centre CC, and a loss on disposal of
approximately R2.03 million will be incurred on the disposal.

Impact on statement of financial position
The disposal will result in a decrease of investment property of R12.03 million, a decrease in
bond finance of approximately R6.7 million and a decrease in other secured financial
liabilities and current liabilities of R3.3 million. The loss on disposal will reduce retained income
by R2.03 million, adjusted for taxation.

Conditions Precedent and Documentation
There are no conditions precedent, other than the required cash advance of R2.3 million on
or before 26 April 2016, failing which the disposal will be null and void.

The Disposal is categorised as a Category 2 transaction as the purchase price is less than 50%
of Visual’s market capitalisation. The Disposal will thus not require shareholder approval.

By order of the board
22 April 2016

Designated Advisor
Arbor Capital Sponsors Proprietary Limited

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