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Lowveld Lodge - Annual General Mtg (3 Options)

mawaga

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For those Lowveld Lodge TS owners who did not receive the Annual General Mtg letter yet, here it is. And although the letter states there is a proxy that we can return to them with our vote, no proxy was included with the letter. It doesn't look good for Lowveld Lodge.

Dear Shareholder,
The notice for the Annual General Meeting of Lowveld Lodge Share Block LTD is shortly due to be posted to all Shareholders.

Please read this letter very carefully, as there are several important decisions that you as a Shareholder of Lowveld Lodge will have to make regarding the future of the resort.


History
The complex was bought and converted to a timeshare more than 20 years ago and has, primarily as a result of its location, been very popular with owners and guests visiting the Eastern Transvaal (now Mpumalanga).

Being so popular, the whole region enticed and encouraged developers to develop more resorts closer to the main attractions, these mainly being the Kruger National Park, Sabie, Graskop and Phalaborwa areas. Due to its locations, Lowveld Lodge was given a relatively high exchange value within the RCI trading system. Unfortunately this led to a substantial number of owners acquiring weeks at Lowveld Lodge, not for their own personal use, but purely for space banking purposes.

Over the years, new resorts such a Sanbonani, Waterberry Hill, Kruger Park Lodge, Sabie Rive Sun and Hazyview Cabanas were developed and with the opening of the new Phabeni gate into Kruger Park, the occupancy at Lowveld Lodge decreased gradually, to the point where in some months only 1% of owners occupy the resort. Your Board has over the years maintained and upgraded the resort to try and entice owners to visit the resort. These efforts, according to the occupancy figures, have not had the desired effect.

Current Position
With the focus on ever-increasing levies, your Board is constantly assessing the situation and investigating innovative ideas to contain the increases. The resort currently is totally underutilized by owners and club members alike. Owners are no longer using their weeks as they did in the past and the rental of these apartments has also become more difficult. At present, the total occupation in some months is as long as 31%.

Action
Your Board has, as a result of the declining occupancy and the steadily increasing levies, instructed the Managing Agent to provide the Board with suggestions on how to utilize the resort more effectively. Your Board has evaluated and investigated all options and has finally settled on the following suggestions. (see below)

Making a Decision
It is suggested that an item be included on the agenda of the next Annual General Meeting of the Company for Shareholders to consider and vote, for or against one of the options:

1. Create a 3 tier levy system, where a base levy is charged and other costs and services are paid by the occupant. The advantage is that the base levy is low with occupants paying the use services levy based on the required level of service.

2. Change the resort to a mixed use property where a number of units are allocated to Timeshare and the balance rented out to permanent tenants. This will hopefully reduce the levy as the bulk of the property will only be liable for common property levy.

3. Terminate the timeshare scheme in its entirety and rent the units to permanent tenants. Owners remain shareholders in the Company but forfeit their right to occupy the week they own. Shareholders are eligible to receive any dividends paid at year-end in proportion to the share they own in the company.

In order to implement the above, Shareholders will have to pass a Special Resolution at a Special General Meeting of Shareholders of the Company at which at least 75% vote in favour of such action.

Shareholders will not be materially affected should option one or two be decided on. Should shareholders choose item three, the following options will be available to them:

1. Remain a shareholder in the company, relinquish their right to occupy and share in the dividend should there be one.

2. Convert to any of the Flexi Club products.

3. Accept a week at a different resort where the same week is available. The company cannot guarantee that a similar week during the similar period will be available.

A formal notice to this effect will be sent to all Shareholders.

The decisions to be made by Shareholders at these two meetings will materially affect the future of Lowveld Lodge and it is therefore essential that all Shareholders make every effort to participate in this most important decision.

Should any Shareholder not be able to attend this crucial Annual General Meeting, it is important that you complete and return your proxy form indicating your vote.

Should it be necessary to proceed with the Special General meeting, it is again important that all Shareholders who are unable to attend the meeting complete the enclosed proxy form indicaing their vote in favour or against the proposed suggestions.

The Managing Agent has been instructed to set up a help desk to assist any Shareholder with answers to any questions they may have regarding the proposals.

For any further information feel free to contact Saroj Govender, the Credit Controller, on telephone number (031) 717 7593 or email us at info@firstresorts.co.za, should you have any queries.

Kind regards
A.N. Ridl
Directory
 
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Carolinian

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Hmmmm. It seems all the other earlier letters were just Froggy blather to try to stampede owners out of their weeks. There DOES have to be a meeting after all.

''Occupancy'' is always a phony issue on the viability of a timeshare. The key is whether levies are being paid, and it is Froggy's points clubs at other resorts that have a history of not paying. I hope some of the members on the ground in SA are demanding to see resort records. It is also cleverly worded to not talk about annual occupancy. If one month has poor occupancy, that really does not mean the resort is not viable.

The ''your board'' is a bit over the top. At any resort Froggy controls, it is always HIS board, with all members being Club Leisure heavies. This letter was even signed by a CL heavy who is a former police general from the old apartheid government.

It is a bit curious that the letter takes a swipe at overseas owners who used the weeks for exchange but never really seems to connect it with any real reason.
 

Dori

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Except....they neglected to send a proxy form (at least to me)!

Dori
 

bailey

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Well they've neglected to send me anything or answer my emails.
 

Carolinian

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Except....they neglected to send a proxy form (at least to me)!

Dori

Well, there's no risk that you will vote against the Bullfrog's position if you don't get a proxy, now is there?
 

EWSteyn

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From a purely financial perspective, if occupancy is really a problem, I cannot see that option 1 or 2 will work. With option 1, if you do not have enough people coming to your resort, the service based levies won't work in my opinion. With option 2 it is almost the same situation, except now only part of the resort is operating as timeshare, so there is less timeshare owners and visitors that are contributing to your timeshare trading operations like entertainment, restaurant, shop, pub, etc. which must be run as normal. With option 3 the timeshare related operations and activities can be closed down, so there is a small but significant cost saving there. However, the biggest winner with this option is the Lamont group, because they are going to be the manager for the property (via First Resorts), probably going to be the rental agent too (getting nice commissions), and receive rent on the units they own via their shareholding.

It would be great if they can provide Lowveld Lodge owners with financial estimates for each of the proposed options, so that comparisons can be made between the status quo and the different options. It's a long shot, but I would also insist on an option for the minority shareholders to be bought out by the majority shareholder if option 3 is chosen, as a means of a viable exit route for minority shareholders. It is very rare in the South African context that these property sindication schemes (one property with hunderd or thousands of owners) is successful. Good luck with your decisions!
 
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