BONATLA PROPERTY HOLDINGS LIMITED - Attachment and Disposal of Property - The Heights Building, Philip Nel Park Property ("The Heights")

Attachment and Disposal of Property - The Heights Building, Philip Nel Park Property ("The Heights")

BONATLA PROPERTY HOLDINGS LIMITED
(Registration number 1996/014533/06)
Share code: BNT ISIN: ZAE000013694
(”Bonatla” or “the Company”)


ATTACHMENT AND DISPOSAL OF PROPERTY – THE HEIGHTS BUILDING, PHILIP
NEL PARK PROPERTY (“THE HEIGHTS”)


Shareholders are advised that the Company has entered into a disposal agreement through
a subsidiary of the Company, Nungu Trading 472 Proprietary Limited (“the Seller”) with TUT
Varsity Lodge Proprietary Limited (“the Purchaser”). CDA Property Consultants Proprietary
Limited (“CDA Properties”), a substantial creditor and shareholder of the company and a
related party, has attached The Heights in terms of a pre-existing loan agreement as CDA
Properties has been funding Bonatla for a number of years. CDA will recover its loan,
ensure that the bond and associated costs are settled and then any excess proceeds will be
paid over to Bonatla.

The overriding rationale for the disposal is cash-flow based in order to ensure the long term
survival of the company following many years of operating in a constricted environment.

Full details of the disposal are set out below:

1.     PROPERTY
       Remainder of Erf 16, Philip Nel Park, Pretoria, measuring 2.5744 hectares, situated
       at 413 Diplomandi Crescent, Philip Nel Park, Pretoria (“Remainder Erf 16”). The
       property comprises 19 buildings with 864 student residences.

2.     TERMS OF THE DISPOSAL
       The Purchaser will acquire from the Seller the Philip Nel Park property, being the
       buildings, land and improvements thereon at Remainder Erf 16. The effective date
       will be the date of transfer of the property through the deeds office (“the effective
       date”).

       The consideration for the disposal of The Heights property is R92 million (“the
       Purchase Consideration”). A non-refundable deposit of R12 million has been paid,
       R65 million will be paid once the Purchaser receives bond approval and the balance
       of R15 million is to be settled in cash by 28 February 2016. The sale price per bulk
       square meter is R4 758, including land, with a gross rental of R50 per square meter.

       All other debts at the effective date will be settled on transfer.

       The agreement is subject to the provisions of the JSE Listings Requirements.
       However, due to the attachment of the property and/or proceeds, Bonatla no longer
       has control over the property and thus shareholder approval cannot be obtained for
       the disposal.
3.     RATIONALE FOR THE DISPOSAL
       The Heights property is categorised as a B/C Grade property comprising 864 student
       residences housed in 19 buildings. Individual leases were entered into with the
       students. The main rationale for the disposal is to strengthen the balance sheet of
       the company, relieve severe cash flow difficulties and the offer received is at a good
       price.

       PROPERTY SPECIFIC INFORMATION

       PROPERTY                       ADDRESS               LOCATION              SECTOR
       NAME
       Remainder Erf 16        413 Diplomandi        Pretoria, South         Residential
                             Crescent, Philip                 Africa
                                     Nel Park

       WEIGHTED                         GROSS              VALUATION       SELLING PRICE
       AVERAGE                  LETTABLE AREA
       RENTAL PER M2                     (M2)
       R50                           19 336m2            R93 000 000         R92 000 000

       The Company also owns a small house on the property for which a separate offer is
       being considered. The value of the property has been impaired to R92 550 000.

4.     SUSPENSIVE CONDITIONS
       There are no suspensive conditions, other than the payment of the purchase
       consideration, due to the attachment of the property and Bonatla no longer having
       control over the property.

5.     FINANCIAL INFORMATION
       The carrying value of The Heights property as at 31 March 2015, being the financial
       year end, was R92.550 million. The bond on the property of approximately
       R18.5 million as at 31 March 2015 will be settled from the proceeds on the disposal.

       The net profit before interest and taxation arising from the property was
       approximately R500 000 for the 15 month period ended 31 March 2015 before
       investment revenue, impairments and fair value adjustments. The leases are all
       annual leases of R24 500 per student, payable over 10 months.

6.     TENANTS
       The current tenants are students registered at the Tshwane University of Technology.

7.     EXIT INVESTMENT YIELD
       The exit investment yield is below 1%.

8.     CATEGORISATION
       Whilst the disposal is categorised as a Category 1 transaction in terms of the JSE
       Listings Requirements, following the attachment of the property, the sale will not be
       able to be approved by Bonatla shareholders in general meeting.

By order of the board
30 October 2015

Sponsor
Arbor Capital Sponsors Proprietary Limited

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