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Disposal of various properties by Ellies
ELLIES HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2007/007084/06)
JSE share code: ELI ISIN: ZAE000103081
("Ellies" or the "Company")
DISPOSAL OF VARIOUS PROPERTIES BY ELLIES
INTRODUCTION
Shareholders are advised that on 24 February 2020 ("signature date"), Ellies, through its wholly-owned subsidiary
Ellies Properties Proprietary Limited ("Ellies Properties"), concluded various agreements ("the Sale Agreements")
to sell by public auction as a going concern, the rental enterprises comprising the following properties ("the
transactions"):
Property location Purchase price Purchaser ("the purchasers")
Erf 1930, 1931 and 1932 situated at R 3,200,000 MAA Property Trust
9 Robert Street and 6 Drury Street, North
End, Port Elizabeth
Erf 1671 and Erf 28416 situated at 27 Grey R 4,300,000 JR 1146 Investments CC
Street, Hilton, Bloemfontein
Erf 45 situated at 8 Christie Crescent, R 7,200,000 The Spar Group Limited
Vintonia, Nelspruit
Erf 236, situated at 23 Bitcon Road, Village R 1,650,000 Vegtu Investments (Pty) Ltd
Deep Johannesburg
Erf 264, situated at 5 Inglestone Road, R 2,000,000 Vegtu Investments (Pty) Ltd
Village Deep Johannesburg
The rental enterprises include the immovable property, land and buildings, together with all other aspects of the
business necessary for carrying on the rental enterprise, including all existing lease agreements pertaining to the
property and any tenant deposits.
The properties currently have existing leases agreements with Ellies Electronics Properties Limited, a wholly-owned
subsidiary of Ellies.
Except for the properties purchased by Vegtu Investments Proprietary Limited ("Vegtu"), the purchasers are not
considered to be related parties to Ellies.
Vegtu is an associate of Ellie Salkow, who has been a director of Ellies within the 12 months preceding the
transactions and who is a material shareholder of the Company. Accordingly, the disposal of 23 Bitcon Road, Village
Deep, Johannesburg and 5 Inglestone Road, Village Deep Johannesburg are considered to be a related party
transaction in accordance with the JSE Listings Requirements ("LR").
The Company is currently in discussions with the JSE regarding the related party transaction, and shareholders will be
advised on the outcome of these discussions in due course.
RATIONALE FOR THE TRANSACTIONS
As previously stated, the Company has resolved to dispose of its investment properties and to lease back only those
properties required for operations as a measure to return Ellies to sustainable profitability. The proceeds will be used
to strengthen the balance sheet of the Company.
SALIENT TERMS OF THE TRANSACTION
The purchasers will acquire the respective properties, with effect from the date of registration of transfer of ownership
into the purchasers’ name ("the effective date"), which is expected to be on or about 1 June 2020. Ownership, risk
and benefit in the rental enterprises will pass to the purchasers as from the effective date. The purchase price of the
properties will be settled in cash on the effective date, less any upfront deposits held in trust. The purchasers are liable
for the agent’s commission payable in terms of the Sale Agreements.
The Sale Agreements have all been concluded on the same terms, save for the purchase price, and there are no
conditions precedent to the Sale Agreements. The Sale Agreements contain undertakings, warranties and indemnities
which are normal for transactions of this nature.
FINANCIAL INFORMATION
The net asset value or book value of the properties has been extracted from the Company's interim results for the
period ended 31 October 2019, which were prepared in terms of Ellies' accounting policies and International Financial
Reporting Standards (“IFRS”).
The profits attributable to the properties and earned by Ellies Properties for the period 1 May 2019 to 31 December
2019 are set out below:
Property location Net asset value Profits attributable
to the property
Erf 1930, 1931 and 1932 situated at R 3,594,960 R263,209
9 Robert Street and 6 Drury Street, North
End, Port Elizabeth
Erf 1671 and Erf 28416 situated at 27 Grey R 4,722,067 R506,382
Street, Hilton, Bloemfontein
Erf 45 situated at 8 Christie Crescent, R 6,300,203 R400,000
Vintonia, Nelspruit
Erf 236, situated at 23 Bitcon Road, Village R 1,861,248 R337,575
Deep Johannesburg
Erf 264, situated at 5 Inglestone Road, R 4,132,296 R240,000
Village Deep Johannesburg
The above financial information relating to the profits attributable to the properties has been extracted from the
unaudited management accounts for the period ended 31 December 2019. The management accounts were prepared in
terms of Ellies’ accounting policies and IFRS. Ellies is satisfied with the quality of these management accounts for
the purposes of this announcement.
CATEGORISATION OF THE TRANSACTION
Other than the related party transaction the above the transactions are individually classified as category 2 transactions
in terms of the JSE Listings Requirements and accordingly are not subject to the approval of Ellies’ shareholders.
26 February 2020
Sponsor
Java Capital
Date: 26-02-2020 01:20:00
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