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Disposal of the Soshanguwe and Nancefield Properties
PUTPROP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/001085/06)
Share code: PPR ISIN: ZAE0000072310
(“Putprop” or “the Company” or “Group”)
DISPOSAL OF THE SOSHANGUWE AND NANCEFIELD PROPERTIES
1. INTRODUCTION
Shareholders are advised that Putprop has signed two separate sales agreements (“Agreements”) on
Friday, 16 September 2022 (“Signature Date”) for the individual disposals of the:
1.1. Putco Depot, Soshanguwe property (“Soshanguwe”) to Colombia Falls Properties 80 Proprietary
Limited (“Soshanguwe Disposal”) for a cash consideration of R14 million (“Soshanguwe
Consideration”); and
1.2. Putco Nancefield property (“Nancefield”) to the CMB Business Trust (“Nancefield Disposal”) for
a cash consideration of R7.6 million (“Nancefield Consideration”).
1.3. The Soshanguwe Disposal and the Nancefield Disposal are hereafter collectively referred to as
the “Disposals”.
2. DETAILS OF THE DISPOSALS
2.1 Soshanguwe
2.1.1. Soshanguwe comprises:
2.1.1.1. the industrial property, being the immovable properties, including buildings,
situated at ERF 2 Soshanguve IA – Ngwete Road, Soshanguwe, currently used in
connection with the operating of the letting enterprise conducted by the Company;
and
2.1.1.2. the lease agreement(s) currently in place between Putprop and the lessees of the
Soshanguve.
2.1.2. The gross lettable area of the Soshanguwe property is 2 964 per square metre and the
weighted average net rental is R66.80 per square metre as extracted from the audited
annual financial statements of the Company for the year ended 30 June 2021.
2.1.3. Based on management accounts for the financial year ended 30 June 2022, the weighted
average net rental is R50.40 per square metre.
2.1.4. Colombia Falls Properties 80 Proprietary Limited (“Columbia Falls”) is beneficially owned
by Neo Maponya and Phatudi Maponya who are not related parties to Putprop.
2.2 Nancefield
2.2.1. Nancefield comprises:
2.2.1.1. the industrial immovable property and buildings, being ERF No. Portion 78 (a
portion of portion 33) of the farm Olifansvlei 316- I.Q, situated at 12 Cuming Road,
Nancefield, Soweto, currently used in connection with the operating of the letting
enterprise conducted by the Company; and
2.2.1.2. the lease agreement(s) currently in place between Putprop and the lessees of the
Nancefield.
2.2.2. The gross lettable area of the Nancefield property is 1 585 per square metre and the
weighted average net rental is R136.80 per square metre, as extracted from the audited
annual financial statements of the Company for the year ended 30 June 2021.
2.2.3. Based on management accounts for the financial year ended 30 June 2022, the weighted
average net rental is R97.50 per square metre.
2.2.4. The CMB Business Trust (“CMB”) is beneficially owned by Ahmed Rashaad who is not a
related party to Putprop.
2.3 Rationale for the Disposals and Application of Disposal Proceeds
The board of directors of Putprop (the “Board”) assessed the property yields of both the
Soshanguwe and Nancefield properties and due to the location and age of the properties, have
elected to dispose of them.
The proceeds of the Disposals will be utilised by Putprop to acquire income producing properties
or to reduce Group debt.
2.4 Payment terms of the Cash Considerations and Effective Date of the Disposals
2.4.1. Soshanguwe
2.4.1.1. The Soshanguwe Consideration is payable by Colombia Falls to the Company in
cash as follows:
2.4.1.1.1. on Signature Date, a deposit of 15%, amounting to R2.1 million;
2.4.1.1.2. with the balance of the Soshanguwe Consideration to be transferred or
secured by a written guarantee obtained by Columbia Falls from a
registered bank of financial institution within 21 days of the Signature Date.
2.4.1.2. The effective date of the Soshanguwe Disposal will be the date of registration of
transfer of Soshanguwe in the name of Columbia Falls (Soshanguwe Effective
Date).
2.4.2. Nancefield
2.4.2.1. The Nancefield Consideration is payable by CMB to the Company in cash as
follows:
2.4.2.1.1. on Signature Date, a deposit of 15%, amounting to R1.14 million;
2.4.2.1.2. with the balance of the Nancefield Consideration to be transferred or
secured by a written guarantee obtained by CMB from a registered bank
of financial institution within 21 days of the Signature Date.
2.4.2.2. The effective date of the Nancefield Disposal will be the date of registration of
transfer of Nancefield in the name of CMB (Nancefield Effective Date).
2.4.3. There are no conditions precedent to the Disposals.
2.4.4. The Agreements contain warranties and undertakings which are standard for Disposals of
this nature.
3. FINANCIAL INFORMATION
3.1 Soshanguwe
3.1.1. As extracted from the audited annual financial statements of the Company for the year
ended 30 June 2021, the audited value of the net assets attributable to Soshanguwe was
R18.5 million and the audited profit before tax attributable to the net assets of Soshanguwe
was R2.179 million.
3.1.2. Based on management accounts for the financial year ended 30 June 2022, the value of
the net assets attributable to Soshanguwe is R19.64 million and the profit before tax
attributable to the net assets of Soshanguwe is R1.467 million.
3.2 Nancefield
3.2.1. As extracted from the audited annual financial statements of the Company for the year
ended 30 June 2021, the audited value of the net assets attributable to Nancefield was
R13.60 million and the audited profit before tax attributable to the net assets of Nancefield
was R2.601 million.
3.2.2. Based on management accounts for the financial year ended 30 June 2022, the value of
the net assets attributable to Nancefield is R12 million and the profit before tax attributable
to the net assets of Nancefield is R929 000.
3.3 The annual financial statements of the Company for the year ended 30 June 2021 were prepared
in accordance with International Financial Reporting Standards and the Companies Act (No 71 of
2008) as amended.
4. INDEPENDENT VALUATION OF THE DISPOSALS
4.1 A valuation of the Company’s total property portfolio was performed as at 30 June 2021 by Joshua
Askew (IFRICS), representing JLL Inc., who are independent and registered as professional
valuers in terms of the Property Valuers Profession Act, 2000 (Act 47 of 2000) (“Act”).
4.2 These independent valuations are supported by the Board. The members of the Board are not
independent valuers and are not registered as professional valuers or as professional associate
valuers in terms of the Act.
4.3 As extracted from the audited annual financial statements of the Company for the year ended 30
June 2021, Soshanguwe was valued at an amount of R18.5 million and Nancefield was valued at
an amount of R13.6 million.
4.4 Based on management accounts for the financial year ended 30 June 2022, Soshanguwe was
valued at an amount of R19.64 million and Nancefield was valued at an amount of R12 million.
5. CATEGORISATION OF THE DISPOSAL
The Soshanguwe Disposal is classified as a Category 2 transaction and the Nancefield Disposal
categorisation constitutes voluntary disclosure in terms of the Listings Requirements of JSE Limited
respectively.
Johannesburg
19 September 2022
Sponsor
Merchantec Capital
Date: 19-09-2022 04:25:00
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