Nova director stands by ‘robbery’ claim

SHARES: AT ODDS WITH PRIOR BOARD COMMUNICATION

Amendments made to scheme of arrangement, but issues still exist.

Nova PropGrow’s board has distanced itself from its financial director’s statements at an investor meeting two weeks ago, that the listing proposal to former Sharemax investors is “daylight robbery”.

Rudi Badenhorst said he and operations director Dirk Koekemoer objected to the 43% equity stake the seven founding shareholders would receive in the newly listed company and proposed a reduced 10-15% holding.

He added that the 43% equity stake would dilute 19 700 debenture holders’ investments.

Nova CEO Dominique Haese said the “statements by Mr Badenhorst and allegedly by Mr Koekemoer are at odds with their prior communication with the Nova board. Both have, as recently as October 31, 2017, confirmed and requested the allocation of their shares, in accordance with their respective pro rata proposed share quantums, of the proposed 43%, of the total quantum of shares proposed in Nova Holdings …

“In addition, since that day and up to the date of the meeting of November 10, Mr Badenhorst supported and contributed in his capacity as financial director, to the proposed listing process and the preparation of financial related documentation required for the section 155 circular dated 29 September 2017, on the 43% basis.”

Not responding to Haese’s statement, Badenhorst stood by his remarks made at the meeting, where debenture holders were set to vote on the listing proposal.

Nova’s response

The Nova board issued a press statement and answers to several Moneyweb questions on Friday.

As to whether the scheme is fair and reasonable towards debenture holders, Haese said: “The board, including Mr Badenhorst, approved the section 155 circular, and Mr Badenhorst signed the certificate in terms of Section 155(5) of the Companies Act, on September 29 2017, on the basis that the board viewed the proposed Scheme of Arrangement fair and reasonable.”

On Badenhorst’s resignation, she said: “Mr Badenhorst was requested by the CEO to resign, based on certain issues which were discussed with him, inter alia, that he neglected to fulfi l his duties as a financial director, while continuing to take his full remuneration as financial director. He acknowledged that the issues discussed with him were well founded and he resigned on August 17, 2017 out of his own free will … effective November 30.”

Scheme of arrangement amendments

Debenture holders reconvene on Friday in Pretoria for another investor meeting. Nova’s press release states that due to time constraints, a new scheme document won’t be available before the meeting, thus it’ll only be an information session. Another meeting will be scheduled at which debenture holders will vote.

The press release reaffirmed that the JSE-listing of Nova PropGrow, the company that owns all the former Sharemax properties, will become a condition of the scheme.

The entire scheme will now be hedged on the listing and require Nova to produce a detailed prelisting statement.