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Category II Disposal of a Wholly Owned Subsidiary
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
JSE code: TDH
ISIN: ZAE000152658
(“TDH” or “TDH Group”)
CATEGORY II DISPOSAL OF A WHOLLY OWNED SUBSIDIARY
Shareholders are advised that a wholly-owned subsidiary of the TDH
Group, incorporated in Namibia, namely Nguni Property Fund Limited, has:
- resolved to change its name to Frontier Property Fund
Limited(“FRP”); and
- entered into a series of agreements (the “Acquisition Agreements”)
with a number of third parties unrelated to TDH, to acquire their
properties, or interests in their properties, in exchange for the
issue by FRP of linked units, each such linked unit consisting of
one FRP ordinary share and one FRP unsecured, variable rate
debenture (the “Linked Units).
FRP owns four properties in Namibia (the “Disposal Properties”), which
properties will be retained for purposes of the transactions set out
below.
Salient features of the Acquisition Agreements:
In terms of the Acquisition Agreements FRP has agreed to, inter alia:
- acquire one property;
- acquire shares and claims in and against four property holding
companies;
- dispose of shares and claims in and against one property holding
company to a third party; and
- dispose of shares and claims in and against one property holding
company to another wholly owned company in the TDH Group.
If the Acquisition Agreements become unconditional the number of
properties, and property entities in which FRP will have an interest,
will increase to nine.
The Acquisition Agreements are subject to a number of conditions
precedent standard for a transaction of this nature. Salient conditions
precedent, outside of the control of TDH, include:
- the Namibian Stock Exchange (“NSX”) approving the proposed listing
of the Linked Units (the “Listing”);
- FRP raising at least 400 million Namibia Dollars (“N$”), with the
option to increase to N$600 million, in cash, through the issue of
Linked Units at a price ranging between N$29.00 and N$31,00 to a
limited number of investors by way of a private placement (the
“Private Placement”);
- the directors of Tradegro Holdings (Pty) Ltd confirming that they
are satisfied with the outcome of the Private Placement; and
- the Namibian Competition Commission approving the acquisition of
one of the property companies that will be acquired by FRP as part
of the Transaction.
The conclusion of the Acquisition Agreements, the approval of the
Listing and the completion of the Private Placement are collectively
referred to as the “Transaction”.
Subject to the Acquisition Agreements becoming unconditional and being
implemented in accordance with their terms, TDH will be diluted from a
100% shareholder to between a 20% and 25% shareholder in FRP depending
on the number of Linked Units issued in respect of the Private
Placement.
Salient details of the Disposal Properties:
The salient details of the Disposal Properties are set out below:
- Mutual Platz: Located on the pedestrian walkway on Post Street
mall in downtown Windhoek. The property has a gross lettable area
(“GLA”) of 16 223m2, of which 10 522m2 is retail space on the
ground level, offices of 5 475m2 of ‘A’ grade space spread over
five floors and 214 parking bays, of which 204 are usable. The
property’s weighted average rental per m2 is N$151.00. The
property’s gross value for the purposes of the Transaction is
N$272 309 047 and its value has been calculated by Jones Lang
LaSalle (Pty) Ltd, a member of the Royal Institute of Chartered
Surveyors (“the Independent Valuer”), as N$253 900 000.
- Mega Centre: A lifestyle retail centre with a GLA of 17 686 m2
situated opposite The Grove Mall of Namibia Hilltop Estate. The
property’s weighted average rental per m2 is N$132.00. The
property’s gross value for the purposes of the Transaction is
N$162 823 091 and its value has been calculated by the Independent
Valuer as N$153 300 000.
- Rundu Mall: A retail mall with a GLA of 13 699m2 situated in
central Rundu. The property’s weighted average rental per m2 is
N$124.00. The property’s gross value for purposes of the
Transaction is N$219 857 478 and its value has been calculated by
the Independent Valuer as N$206 600 000.
- Ondangwa M&Z: A 240m2 GLA convenience retail property situated in
Ondangwa. The property’s weighted average rental per m2 is
N$205.00. The property’s gross value for the purposes of the
Transaction is N$12 651 235 and its value has been calculated by
the Independent Valuer as N$11 700 000.
Rationale for the Transaction:
TDH’s rationale for the Transaction is that the Private Placement will
strengthen FRP’s balance sheet enabling it to secure finance from local
banks on more favourable terms. The Listing is anticipated to raise the
local profile of FRP that will facilitate additions to the portfolio by
offering the owners of desirable properties in Namibia the opportunity
to increase the liquidity of their property investments through swapping
them for Linked Units.
Financial effects:
The financial effects of the Transaction on TDH are only capable of
calculation once the Transaction has closed and will be reported on at
the time of the Listing.
The effective date and anticipated timetable:
The Acquisition Agreements will become effective on the Listing. It is
anticipated that the Private Placement will take place on 24 November
2017 and the results thereof will be published on 27 November 2017. If
the Private Placement is successful the Listing is expected to take
place on 29 November 2017.
Categorisation:
As at the last date of the conclusion of the Acquisition Agreements,
being 25 October 2017, the aggregate Transaction value of the Disposal
Properties represented 6.8% of TDH’s market capitalisation and the
Transaction is therefore deemed to constitute a Category 2 transaction
in terms of section 9 of the Listings Requirements of the JSE.
The Transaction is not considered a related-party transaction in terms
of section 10 of the Listings Requirements of the JSE.
Shareholders will be advised of the financial effects of the Transaction
on TDH once the Private Placement has been successfully concluded and
the Listing has taken place.
Cape Town
2 November 2017
Sponsor
Bravura Capital Proprietary Limited
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