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Announcement regarding the disposal of 20 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 20 RENTAL UNITS IN STELLENDALE
Introduction
Further to the announcement on 22 April 2016 and the update announcement on 18 May
2016, shareholders are advised of the disposal of 20 units in Stellendale by Visual International
Proprietary Limited (“the Company”) to The Marques Trust (“the Purchaser”) for a
consideration of R10 million (“the Disposal”). The sale is by way of an instalment sale and thus
the properties remain registered in Visual’s name and the bank loan remains in place until
the purchase price of R10m is paid in full. The effective date of the transaction will be on or
before 8 June 2016.
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 a deposit of R3.5 million to the Company, of which R1m has already been received and
the balance of R2.5 million is payable no later than 8 June 2016. The remaining balance of
R6.5m will bear interest at a rate related to the prime bank rate of Standard Bank per annum
and interest will be calculated monthly in advance. The Purchaser will pay monthly
instalments directly to the Seller’s bondholder as required from time to time by the
bondholder, in order to ensure that the balance of the purchase price payable to the Seller
is fully paid on or before 31 December 2021.
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 and a decrease
in other secured financial liabilities and current liabilities of R3.5 million. The loss on disposal
will reduce retained income by R2.03 million, adjusted for taxation. Whilst the bond finance
of approximately R6.5 million will remain in place, this will be offset by an instalment sale
debtor of the same amount.
Conditions Precedent and Documentation
There are no conditions precedent, other than the required deposit of R2.5 million on or
before 8 June 2016.
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
2 June 2016
Designated Advisor
Arbor Capital Sponsors Proprietary Limited
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