14 Oct 2013 07:00
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA.
13 October 2013
INVITATION TO THE EXISTING SHAREHOLDERS TO SUBSCRIBE TO THE INCREASE OF THE CAPITAL OF PALM HILLS DEVELOPMENTS SAE
I. COMPANY'S GENERAL DATA
Name of Issuing Company: Palm Hills Developments S.A.E.
Address of Head Office: Smart Village, 6 October City, 6 October Governorate.
Legal Form: An Egyptian joint stock company subject to the provisions of Law No. 8 of 1997.
Governing Law: Law No. 8 of 1997 and its Executive Regulations.
Head Office: Sixth of October.
Object of the Company: Real estate investment in cities and new urban communities, reclaiming and cultivating desert land, provided that the land allocated is for the purpose of reclamation and cultivation, and that modern irrigation methods are applied when planting and not to irrigate by sub-merging, taking into consideration the Prime Minister's Decree No. 350 of 2007 and Presidential Decree No. 356 of 2008 provided the activity is practiced on the reclaimed and cultivated plot of desert land located after around 2 kilometers outside the boundaries of Al Kata Area, East of the Cairo/Alexandria Desert Road - Kilometer 49 - the Company shall obtain all necessary licenses to practice its activity.
Duration of the Company: 25 years, from 10/01/2005 to 09/01/2030.
Fiscal Year: Starts in January every year and ends in December of the same year.
No. and Date of Commercial Registration: 6801 on 10/01/2005.
Stock Exchange Listing Status: Company listed on the Egyptian Stock Exchange in April 2008.
Central Depository Status: all the Company shares are deposited with Misr for Clearing, Settlement and Central Depository Company.
Members of the Board of Directors and their experiences:
NAME | POSITION ON BOARD | EXPIRY OF BOARD MEMBERHIP TERM |
Yasseen Ibrahim Lotfy Mansour | Chairman and Managing Director | 30/03/2014 |
Mohamed Al-Amin Ismael Lotfy Mansour | Deputy Chairman | 30/03/2014 |
Mohamed Ahmed Sultan Ahmed | Managing Director | 30/03/2014 |
Aly Sabet Sayed Farghaly | Managing director for financial affairs | 30/03/2014 |
Shehab Mazhar Ahmed | Managing director | 30/03/2014 |
Mohamed Ashraf Mostafa Kamel | Managing director | 30/03/2014 |
Yasser Soliman Hesham Al-Malawyany | Board member with expertise | 30/03/2014 |
Yousef Mohamed Medhat Yousef Al-Far | Board member with expertise | 30/03/2014 |
Hasan Mohamed Hasan Darwiesh | Board member | 30/03/2014 |
Rasheed Kamel Mostafa Kamel | Board member | 30/03/2014 |
Auditor of Accounts:
NAME
| ADDRESS |
Dr. Ahmed Shawki, Mostafa Shawki - Mathers Office; Alaa Abdel-Azim Mansour, Mostafa Shawki-Mazers Office. | 153 Mohamed Farid St., downtown, Cairo. |
Emad Hafez Ragheb, Allied for Accounting and Auditing (Ernst Young). | Rama Bldg., Plot 10A, Ring Road, Al Katamiya, Cairo |
Legal Advisor:
NAME | ADDRESS |
1. Al Kamel Law Office.
2. The legal advisor for the offering of the capital increase: Matouk Basiouni Office.
| 17 Nabil El Wakad St., Dokki, Giza
13 Mohamed Aly Ganah, Garden City, Cairo |
Shareholders with shareholding over 5%:
NAME | NUMBER OF CURRENT SHARES | RATIO OF PRESENT SHARES TO CAPITAL SHARES |
Mansour & Maghraby Investment & Development, S.A.E. | 484,280,150 | 46.19583% |
Capital:
AUTHORIZED | ISSUED | PAID-UP | CURRENCY OF PAID-UP CAPITAL |
3,500,000,000 | 2,096,640,00 | 2,096,640,000 | Egyptian pound |
Number of Shares of Current Capital: 1,048,320,000 shares.
Type of Issued Shares: Nominal.
Nominal Value Per Share: EGP 2/share.
Status of Profits: The shares of increase have the right to the dividends to be decided by the EGSM on due time.
Tax Status: Income tax: Palm Hills Development enjoys an income tax holiday for 10 years, ending on 31 December 2015.
Commercial Profits Tax: The years from 2005 to 2009 are being examined.
Salaries and Wages Tax: The years up to 2010 were examined and the tax differences paid.
Fiscal Stamp Tax: The years from the commencement of business until 2006 were examined and the tax difference paid.
Status of Litigations: According to the statement of the legal advisor of the company there is a number of ordinary cases (civil and labor) filed and are being handled by Al Kamel Law Office. A number of judgments were rendered from the court of first instance in favor of the company and no final judgments have been rendered against the company until now.
There is a comprehensive statement made by the legal advisor of the company showing and updating the status of all lawsuits filed by and against the company. The statement is available at the company for any one wanting to have access to.
As for lawsuit related to lands, the key lawsuits are:
- Challenge No. 33432 of 57J, filed before the Supreme Administrative Court to appeal the judgement rendered by the Administrative Court in Case No. 49065 of 64J. The New Urban Communities Authority also filed an appeal regarding the said judgment and the two appeals are being heard at court. The Company filed a grievance before the investors dispute-settling committee of the General Authority for Investment which undertakes the settlement efforts between the investor and the administrative body in order to correct the contract accordingly. Negotiaction are ongoing for re-pricing the lands on which no buildings have beem made yet, being 5.3% approx. of the total area of the project.
NET EQUITY OF SHAREHOLDERS AS PER THE MOST RECENT FINANCIAL STATEMENTS AUDITED ON 31/12/2012
| 3,283,020,390 |
Method for Distribution of the Company's net profit as per the Statutes | The Company 's net profits are distributed annually after deducting all general expenses and other costs, as follows:
1. A sum amounting to 5% of the profits is deducted to form the legal reserve. This deduction ceases when the reserve totals 50% of the Company 's capital and deduction is resumed when the reserve falls below this percentage.
2. Employees have a share in the profits decided to be distributed in cash at no less than 10% of the distributed profits, provided the distributed amounts do not exceed the total annual salaries of employees.
3. The remaining profits are distributed among shareholders or carried forward upon the suggestion of the board to the following year or be used as an extraordinary reserve of money for extraordinary use.
4. The General Meeting has the right to distribute all or part of the profits shown in the periodic financial statements made by the Company , provided that the auditor's report attached thereto.
|
Insurance over the Company's Assets:
INSURED ASSET | INSURANCE AMOUNT | INSURANCE EXPIRY DATE | INSURANCE TYPE |
Vehicles | 6,648,900 | 31/12/2013 | Against theft, fire, crash accidents |
Mortgages and Liens made over the Company's Assets:
There are no mortgages or liens made over the Company's assets.
Business Risks:
As the Company is practicing the business of real-estate investment which is a key business for the national economy, it is affected by the market changes, particularly supply and demand whether in terms of the raw materials required for construction or in terms of the purchase and sale transactions of lands and realties and it is also affected by cash flows available at the marketplace and is also tremendously affected by the economic, political and demographic changes.
Significant Accounting Policies Applied:
The financial statements were prepared in accordance with the Egyptian Accounting Standards in light of the Egyptian laws and regulations in force and the related laws and the historical cost and the financial statement are quoted in Egyptian pound.
Relations with the related parties:
*Disclosures of the legal persons
- Heritage Company for Urban Development (Shehab Mazhr & Co.): Mr. Shab Mazhr Ahmed Mazhr owns 50%.
- Mansour & Maghraby Company for Investment and Development: Mr. Yassin Ibrahim Lotfy Mansour owns 32, 47%.
- United Engineering Company for Contracting (U.E.C.C): Palm Hill Development owns 98%.
Disclosures of the Commutative Contracts
Statement of Commutative Contracts | - Maintenance and supply contracts of agricultural commodities and plants for the different phases of Palm Hills project at October City (Heritage Company for Urban Development).
- Maintenance and supply contracts of agricultural commodities and plants for the different phases of Golf project (Heritage Company for Urban Development).
- Maintenance and supply contracts of agricultural commodities and plants for the different phases of Palm Hills Katamiya project (Heritage Company for Urban Development).
- Maintenance and supply contracts of agricultural commodities and plants for the different phases of Botanica project (Heritage Company for Urban Development).
- The Commutative contracts with United Engineering for Contracting (U.E.C.C) concerning Palm Hills' projects (Palm Hills Katamiya, Golf, and Palm Hills October). |
II. SUBSCRIPTION DATA-
1. Basis for the Capital Increase Resolution: According to the resolution of EGSM convened on 22/09/2013, approving the capital increase and amendment of Articles 6 and 7 of the Statutes pursuant to the outcome of the subscription:
2. Amount of the Capital Increase: of the issued capital of the Company from (EGP 2,096,640,000) to (EGP 2,696,640,000) i.e. by EGP 600,000,000 (only six hundred million Egyptian pounds) divided into 300,000,000 shares at the nominal value of the share amounting to EGP 2 in addition to the issuance expenses of (three piasters) being 1.5% of the nominal value of the share.
3. Right to Subscription: According to decision of the Company's Extraordinary General Shareholders Meeting dated 22/09/2013, the existing shareholders of Palm Hills Developments S.A.E. holders and purchasers of the shares, have the right until the end of the trading session on 28/10/ 2013 to subscribe at the ratio of 28, 62% of the shares owned by each of them in the capital before the increase and they have the right to sell whole or a part of the subscription right separately from the original share. However, the fractions of the subscription right shall be approximated in favour of the minority shareholders from the smallest to the biggest until the quantity of fractions is used up.
4. Conditions of Payment: The full value of the subscription in the amount of EGP 2.03/share (EGP2 value of the share and 3 piasters as issuance expenses) shall be paid.
As for the separate subscription right, the rate of the opening trading of subscription right and any change thereto shall be determined in the first trading session pursuant to the rules established by the resolution of the Board of Directors of the Authority No. 282 dated 26/04/2012 and announcing same on the Egyptian Exchange monitors.
5. Date of Subscription: The subscription shall be opened as of 04/11/2013 and end on 05/12 /2013, however, the subscription may be closed in case its value is covered in full.
6. Place of Receiving the Subscription: The subscription shall be received by Arab African International Bank and its branches in the Arab Republic of Egypt as follows:
BRANCH | ADDRESS
|
Heliopolis Branch | 34 Cleopatra Street |
Murghani Branch | 140 Murghani Street |
Higaz Branch | 33 Al Higaz Street, in front of Miryland |
Aswan Branch | 1 Abtal Al Tahrir Street |
Al Mohandesein Branch | 48 Jizerat Al Arab Street, Mohandesein |
Maadi Branch | Maadi Palace Building, Street No. 9 |
6 October Branch | The Fourth Industrial Zone 2/3 the Banks area |
Damietta Branch | Damietta Ras Al Bar Road, Cornish El Nil, Zaher Division, Al Senaniya |
Horreyia Road Branch | 73 Al Horreyia Road, Alexandria |
Ard El Golf Branch | 13 Al Nouzha Street |
Shooting Club Branch | 12 Shooting Club Street |
Tanta Branch | 95 Al Geish Street, Tanta |
Cairo Branch | 44 Abdel Khalek Sarwat Street |
Kasr Al Einy Branch | 8 Ibrahim Nageib Street, Garden City |
Nasr City Branch | 33 Abou Dawood Al Zahry Street |
Alexandria Branch | 47 Albert Al Awal Street, Semouha |
10th Ramadan Branch
| Third Industrial Zone, Center of the City |
Port Said Branch | 21, 23 July Street, Eastern zone, Port Said |
7. Trading of the Subscription Right: The shareholders of the Company have the right to trade the subscription right separately from the original share during the period starting on 04/11/2013 (opening date of the subscription) until 02/12/2013 (three days prior to the closing date of the subscription). The Company shall obtain, in advance, the approval of the Central Depository Company for recording the subscription right and apply for the recording the subscription right at the Stock Exchange, at least, five business days as of the date specified to open the subscription pursuant to the resolution of the Financial Supervisory General Authority No. (23) of 2012, issued on 12/03/2012.
8. Required Documents: A copy of the Identification Card for the natural person and the Commercial Register for the legal person, the document evidencing the ownership of the shares on the date indicated in the announcement (statement of account issued by the depository book-keeper showing the balance of shares owned on the date indicated in the announcement).
9. In the Event Subscription is Not Covered: In the event the subscription is not covered in the first phase, the remaining shares, not subscribed to, shall be re-offered to the existing shareholders and the purchasers of the subscription right for re-subscription, without limiting the subscription percentage. In the event of oversubscription the allocation shall be based on the percentage of the required shares to the remaining shares and the fractions shall be approximated in favor of the minority shareholders. The bank shall reimburse overpaid amounts realized from the subscription to the remaining shares within one (1) week from the date of closing the subscription by the Bank receiving the subscription and that shall be announced duly after the approval of the Financial Supervisor Authority.
10. Plan of the Company in using the Funds Collected: As the Company is in need of liquidity to use same in financing its current projects, the existing shareholders shall be called to subscribe to the capital increase of the Company by a cash increase at the nominal value of the share in order to increase the issued capital of the Company by EGP 600,000,000.- divided into 300,000,000.- shares at EGP 2.- nominal value per share in addition to 1,5% issuance expenses being 3 pisaters per share. The cash increase amount shall be used in financing the structural works and land installments related to the following projects:
- Al Golf Sixth October Project.
- Al Golf Extension Sixth October Project.
- Katamiya Palm Hills Project.
11. Expected Return from this Use: Turning from losses into profits within one year and accordingly optimizing the current financial position of the Company and enhancing its ability to provide financial support for its future investments in addition to enhancing the ability of the Company to honour its liabilities in the next stage.
The Significant Financial Indices According to the Financial Statements during the previous three years Pursuant to the Last Financial Position on 31/12/2012
SIGNIFICANT FINANCIAL INDICES | STATEMENT | 31/12/2010 | 31/12/2011 | 31/12/2012 |
Liquidity ratio | Current assets/ Current liabilities | 1.32 | 1.38 | 1.23 |
Equity structure | Self financing/ Invested money | 89.58% | 90.88% | 87.58% |
Equity structure | External financing/ Invested money | 10.42% | 9.12% | 12.42% |
Profitability ratio | Total net profit/ Invested money | 9.9% | -1.7% | -0.2% |
Profitability ratio | Net profit & loss/ Invested money | 6.1% | -7.3% | -2.5% |
Profitability ratio | Net profit & loss/ Equity | 6.8% | -8.0% | -2.9% |
Investors Relations' Officer: | Miss. Ola Abdel Maksoud Tayel |
Address: | Smart Village, Abou Rawash, 6th October City |
Telephone: | 35351608 |
Fax: | 35351208 |
Significant Disclosure concerning the Purchasers of the Subscription Right:
For investors who purchased the subscription right separately from the original share:
1. The period permitted to purchase or sell the subscription right starts on 04/11/2013 and ends on 02/12/2013 after which the subscription right shall de delisted from the Stock Exchange and no trading thereon shall be made.
2. The holder of the right is entitled to subscribe to the capital increase as of 04/11/2013 until 05/12/2013.
3. The right to subscribe to the capital increase shares against the number of the rights purchased thereby during the subscription period starting on 04/11/2013 and ending on 05/12/2013.
4. In the event the subscription is not covered in the first stage, it will be opened again and the subscribers of the first stage shall be entitled to subscribe in the second stage without limitation to the shareholding percentage, and a relevant announcement shall be made on time after the approval of the Financial Supervisory Authority.
5. The right to trade the right of subscription either by selling or purchasing at the Egyptian Stock of Exchange is effective during the period from 04/11/2013 until the end of the trading session on 02/12/2013 as long as no subscription was made to the shares of the issued capital increase against the number of the rights purchased thereby.
6. In the event of using the subscription right, a subscriber is not entitled to trade all or a part of the increase shares upon depositing the subscription value.
7. In case of maintenance of the right without subscription during the subscription periods referred to, the right shall be valueless and no legal nor financial liabilities shall be ensued vis-à-vis the issuing Company.
Managing Director
For Further Information:
Miss. Ola Abdel Maksoud Tayel
Investor Relations Officer
Smart Village, Abou Rawash, 6th October City
Tel: + (202) 3535 1608
Fax: + (202) 3535 1208
The information contained herein is restricted and is not for publication, distribution or release, directly or indirectly, in or into, the United States, Canada, Australia or Japan.
This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The potential capital increase and distribution of this document and other information in connection with the potential capital increase in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Any purchase of or application for the securities referred to herein should only be made on the basis of the information contained in any final offering document to be issued in connection with the potential capital increase. The price and value of, and income from, such securities may go up as well as down. Persons needing advice should consult a professional adviser.
The capital increase is not being made within the United States of America or to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")). These materials are not an offer for sale of any securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from the registration requirements of Securities Act. The Company has not registered, and does not intend to register, any portion of the potential capital increase in the United States, and does not intend to conduct a public offering of any securities in the United States.
No person has been authorized to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorized by the Company. In addition, no agent or representative of the Company accepts any responsibility whatsoever for the contents of this document and no representation or warranty express or implied, is made by any agent or representative as to the information set out in this document.
Neither the content of the Company's website (or any other website, including but not limited to the websites of the Company's subsidiaries, joint ventures or restricted affiliates) nor the content of any website accessible from hyperlinks on the Company's website (or any other website, including but not limited to the websites of the Company's subsidiaries, joint ventures or restricted affiliates) is incorporated into, or forms part of, this announcement.
This document contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words "targets," "believes," "expects," "aims," "intends," "may," "anticipates," "would," "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future. These forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.
This communication is only directed at (i) persons who are outside the United Kingdom or to (ii) investment professionals falling within Article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 who are either (a) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (b) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The securities referred to herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.
Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (as amended and together with any applicable implementing measures in any Member State, the "Prospectus Directive") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. This document is an advertisement and not a prospectus for the purposes of the applicable measures implementing the Prospectus Directive and as such does not constitute an offer to sell or the solicitation of an offer to purchase securities.