PUTPROP LIMITED - Acquisition of the Remaining 49% Stake in Neo Trend Khala-Cose Developers Proprietary Limited

Acquisition of the Remaining 49% Stake in Neo Trend Khala-Cose Developers Proprietary Limited

PUTPROP LIMITED
Incorporated in the Republic of South Africa
(Registration Number 1988/001085/06)
Share code: PPR   ISIN: ZAE000072310
(“Putprop” or “the Company” or “the Group”)


ACQUISITION OF THE REMAINING 49% STAKE IN NEO TREND KHALA-COSE DEVELOPERS PROPRIETARY LIMITED


1. INTRODUCTION

   The board of directors of Putprop is pleased to advise shareholders that Putprop has concluded an
   agreement for the acquisition of the remaining 49% of the shares in Neo Trend Khala-Cose Developers
   Proprietary Limited (“Neo Trend”) that it does not already own (“the Sale Shares”) from Khala-Cose
   Fumani Property Developers Proprietary Limited and Bremer Investments Proprietary Limited (“the
   Sellers”) for a total purchase consideration of R22 316 846 (“the Acquisition”).


2. THE ACQUISITION

   2.1 Details of Neo Trend
       Neo Trend is a special purpose vehicle set up to own and develop land situated on Proposed
       Township Erf 3 Secunda extension 60, situated on Portion 1 of the Farm The Walker no 817,
       Registration Division I.S., Mpumalanga Province (in extent 71 192 square metres) (“the Property”).
       Neo Trend acquired the land and entered into a development agreement with Neo Trend Property
       Developers Proprietary Limited to develop phase 1 of the Secunda Value Centre project, being Erf
       8839 Extension 60 Secunda (in extent of 32 722 square metres) with anchor tenants Builders
       Warehouse, Sportsman’s Warehouse, Westpac lifestyle and Burger King. Putprop will benefit from
       revenues generated from the rentals of the retail portions of Secunda Value Centre. The retail
       portion comprises of a gross lettable area of 8 486 square metres. The average net rental per
       square metre is R94.64.

   2.2 The rationale for the Acquisition
       The Acquisition complies with the Group’s stated objective of strategic investments focussed on
       industrial and commercial opportunities, where yields are enhancing in the medium and long term
       as well as broadening of the current tenant base to reduce the risk of over dependence on a limited
       number of tenants.

   2.3 Purchase consideration
       The total purchase consideration of R22 316 846, including loan accounts, will be settled entirely
       by internally generated cash.

   2.4 Warranties
       The Sellers have provided warranties which are normal in a transaction of this nature.

   2.5 Effective date
       The effective date of the Acquisition is 30 June 2016.

   2.6 Conditions Precedent
       All conditions precedent, which the Acquisition is subject to, have been fulfilled.

3.   UNDERLYING FINANCIAL INFORMATION OF NEO TREND
     The value of the net assets that are the subject of the Acquisition as at 29 February 2016, being the
     date of the last audited accounts, prior to any revaluation done for acquisition purposes, was
     R30 272 696 (unaudited net asset value of R30 753 532 as at 30 June 2016). The loss attributable to
     the net assets that are the subject of the Acquisition for the year ended 29 February 2016 was
     R655 610 (unaudited profit of R930 548 for the 4 months ended 30 June 2016, Neo Trend will change
     its year end to 30 June effective 2016.

     A valuation of the Property was performed on 30 June 2016 by Peter Parfitt representing Quadrant
     Properties Valuers who is independent and is registered as a professional valuer in terms of the Property
     Valuers Profession Act, 2000 (Act 47 of 2000). The Property was valued at an amount of R110 million.

4.   CLASSIFICATION OF THE ACQUISITION
     The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the
     JSE Limited.


Johannesburg
4 July 2016


Sponsor
Merchantec Capital

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