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Conclusion of a Settlement Agreement, Withdrawal of Cautionary Announcement & Renewal of Cautionary Ann
ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000075651
("Orion " or “the Company” or “the Group”)
CONCLUSION OF A SETTLEMENT AGREEMENT, WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Shareholders are referred to the announcement published on SENS on 5 April 2019 (“5 April
announcement”) relating, inter alia, to the acquisition of properties which had originally
been announced on 18 March 2019 and had noted that of the ten properties which were
to be acquired, one property had been transferred to the Company, one of the
agreements had been terminated by mutual consent and that the Sellers had unilaterally
terminated the remaining eight agreements by virtue of an alleged non-fulfilment of the
suspensive conditions pertaining to those agreements.
As noted in the 5 April announcement, the Company had approached the Court on an
urgent basis to declare the agreements extant and binding and that the although the
application had been dismissed, the Company had requested written reasons for the
judgment and following the receipt and consideration of these, would consider appealing
the dismissal.
Settlement Agreement
Having applied for and been granted leave to appeal the dismissal, the Company filed a
Notice of Appeal. The parties to the nine remaining agreements (“the Agreements”) have
subsequently entered into a settlement agreement, dated 6 August 2019 (“Signature Date”)
on the following terms and conditions (“Settlement Agreement”):
1. The Company will withdraw the Notice of Appeal;
2. The Company will retain ownership of Erf 1822, Phalaborwa Extension 1, Limpopo
(“Eskom Phalaborwa”), but the agreement providing for the acquisition of Eskom
Phalaborwa will be amended as follows:
2.1 The Company will have a period of 3 (three) years calculated from the Signature
Date in which to settle the R2 800 000 (two million eight hundred thousand Rand)
cash portion of the R14 000 000 (fourteen million Rand) purchase consideration,
but will be obliged to pay interest at prime less 1% (nominal annual compounded
monthly) on the outstanding amount on a monthly basis with effect from 31
August 2019;
2.2 Failure to make timeous payment of either the monthly interest payments or the
cash portion of the purchase consideration on time, if not remedied by the
Company within 24 hours of the Sellers calling upon it to do so, will result in the full
loan outstanding becoming immediately due, owing and payable without
further notice or demand; and
2.3 the 11 830 569 (eleven million eight hundred and thirty-five thousand five
hundred and sixty-nine) shares to be issued in respect of the balance of the
purchase consideration will be issued to Zephan Properties (Pty) Ltd or its
nominee within 30 days of Signature Date.
3. The remaining 8 (eight) Agreements in respect of the properties listed below, are
terminated with effect from the initial date of termination of these agreements in
February 2019:
3.1 Portion 2 of Stand 3183 Bloemfontein, Free State;
3.2 Portions 5 & 6 of Stand 880, Bloemfontein;
3.3 Erf 555 & 556, Halfway House, Ext. 85;
3.4 Erf 62, Welkom, Ext 11 and Portion 9 & 10 of Erf 9866, Welkom, Ext. 31;
3.5 Erf 5876, Secunda Ext. 11;
3.6 Erf 13418 & Portion 2 of Erf 809, Bloemfontein;
3.7 Portions 3, 4 and 5 of Erf 3822, Weltevreden Park Ext. 25; and
3.8 Erf 131, Witbank.
4 Ancillary Agreements
The parties to the Agreements had entered into various agreements ancillary to the
Agreements, including, inter alia, an Occupation Rental Agreement and various
addenda in respect of the properties forming the subject of the Agreements (“the
Ancillary Agreements”). The Ancillary Agreements have also been terminated with
effect from the termination date, but the parties have agreed that:
4.1 the Company shall render an adjustment account in accordance with the
provisions of the Occupation Rental Agreement to the Sellers within 30 (thirty)
days of the Signature Date and the Sellers will be afforded a further 30 (thirty)
days to reconcile the amounts per the Company’s reconciliation;
4.2 If the parties agree to the amounts recorded in the adjustment account, then
the party who owes the other party, shall make payment to them within 14
(fourteen) days of such final reconciliation; and
4.3 If the parties fail to reach agreement in respect of the reconciliation, then the
parties shall refer the matter to dispute resolution in accordance with the terms
of the Settlement Agreement.
Partial Withdrawal of Cautionary
Shareholders are advised that following the publication of this announcement, the
cautionary announcement relating to the Agreements, as included in the 5 April
announcement, has been withdrawn.
Renewal of Cautionary Pertaining to Investec Bank Limited (“Investec”)
Shareholders are reminded that, as previously announced, the application by Investec for
the liquidation of the Company is being opposed by Orion and notwithstanding the fact
that the condition precedent for Investec to accept the R75 million of the proceeds from
the sale of Orion House has been met and payment of the amount having been made, the
application for liquidation remains pending.
Shareholders are further advised that the Company has secured funding from another
financial institution, with a condition that the Company should be a REIT. The Company is
exploring options in this regard.
Furthermore, shareholders are reminded that two separate offers have been received on
two properties, the proceeds of which could also be applied to settle Investec.
Accordingly, shareholders should continue to exercise caution when dealing in their
securities until a further announcement relating to the liquidation application has been
made.
JOHANNESBURG
14 August 2019
Sponsor
Arbor Capital Sponsors Proprietary Limited
Date: 14/08/2019 03:28:00
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