COLLINS PROPERTY GROUP LIMITED - Acquisition of remaining interest in Collins Property Projects Proprietary Limited

Acquisition of remaining interest in Collins Property Projects Proprietary Limited

Collins Property Group Limited
(previously Tradehold Limited)
(Registration number: 1970/009054/06)
Incorporated in the Republic of South Africa
JSE Share code: CPP ISIN: ZAE000152658
("Collins" or "the Company" or "the Group")


ACQUISITION OF REMAINING INTEREST IN COLLINS PROPERTY PROJECTS PROPRIETARY
LIMITED


1. INTRODUCTION

   Shareholders are advised that the Company has entered into a series of inter-conditional agreements
   with U Reit Collins Proprietary Limited (“U Reit"), a wholly-owned subsidiary of Castleview Property
   Fund Limited, in terms of which, if implemented, Collins will acquire the 25.7% of the issued shares of
   Collins Property Projects Proprietary Limited (“CPP”) (“CPP Sale Shares”) that it does not own in
   exchange for the issue to U Reit of in aggregate 72 751 197 new Collins ordinary shares (the
   “Consideration Shares”) (the “Proposed Transaction”), resulting in CPP becoming a wholly-owned
   subsidiary of Collins and U Reit holding 21.78% of the issued ordinary shares of Collins.

2. RATIONALE FOR THE PROPOSED TRANSACTION

   Collins has previously alluded to its intention to make application to the JSE to be granted status as a
   Real Estate Investment Trust (“REIT”). The disposal by Collins in 2022 of Moorgarth Holdings
   (Luxembourg) S.à.r.l., through which Collins held its UK property portfolio, has resulted in the
   simplification of Collins’ group structure, the reduction of associated overheads and the refocusing of
   its property portfolio such that its 74.3% interest in CPP comprises Collins’ main investment vehicle
   through which it holds a portfolio of predominantly industrial properties.

   As part of U Reit’s original investment in CPP, CPP undertook to apply for REIT status. The Proposed
   Transaction will result in U Reit effectively swapping its 25.7% interest in CPP for a 21.78% interest in
   Collins in anticipation of Collins being granted REIT status. The Proposed Transaction will result in
   Collins having full ownership of CPP, which is its principal operating subsidiary.

   The values attributable to the CPP Sale Shares and the Consideration Shares for purposes of the
   Proposed Transaction have been determined with reference to the board of directors’ assessment of
   net asset value of CPP and other assets of Collins outside CPP. Accordingly, the Consideration Shares
   (representing 21.78% of Collins ordinary shares in issue after the implementation of the Proposed
   Transaction) will be issued at an effective price of R13.64 per Collins ordinary share.

3. ADDITIONAL TERMS OF THE PROPOSED TRANSACTION

3.1 Conditions Precedent

   The Proposed Transaction is subject to the fulfilment of the following conditions precedent:
   -   U Reit concluding agreements to procure finance in the amount of R333 000 000, and such
       agreements becoming unconditional; Collins shareholders approving such resolutions as required
       to:
       -    increase the authorised but unissued share capital of the Company; and
       -    amend the memorandum of incorporation of the Company to include a provision to the effect
            that Collins will, inter alia, not voluntarily relinquish REIT status without first obtaining
            shareholder approval by way of an ordinary resolution,
       and the filing of such resolutions by the Companies and Intellectual Property Commission;
   -   the JSE granting Collins REIT status;
   -   the Competition Authorities granting approval for the Proposed Transaction;
   -   Tradegro Holdings Proprietary Limited waiving any rights of first refusal, pre-emptive rights or other
       similar rights which it may have in respect of the CPP Sale Shares;
   -   Collins concluding the agreement in respect of the internal restructuring of the Collins Group on
       terms acceptable to U Reit, and such agreement becoming unconditional; and
   -   Collins, CPP and U Reit obtaining the requisite board approvals and CPP and U Reit obtaining the
       requisite shareholder approvals for the implementation of the Proposed Transaction.

3.2 Dividends

   The CPP Sale Shares will be sold to Collins cum any dividend, distribution or right declared, paid or
   made after the Closing Date, being the first business day after the fulfilment of the conditions precedent
   set out above (the “Closing Date”).

   On the Closing Date, Collins will settle the purchase consideration payable for the CPP Sale Shares
   by way of the allotment and issue of the Consideration Shares cum any dividend, distribution or right
   declared, paid or made after the Closing Date.

3.3 Undertakings, warranties and indemnities

   The agreements in respect of the Proposed Transaction include undertakings, warranties and
   indemnities that are standard for a transaction of this nature.

3.4 Material adverse change

   U Reit shall be entitled to cancel the agreements at any time prior to the Closing Date by written notice
   to Collins if any event has occurred after 28 February 2023 which individually or in the aggregate has
   or is reasonably likely to have the effect of:
   -    reducing the consolidated net asset value of Collins from its mutually agreed level as at 28 February
        2023 (being R4 555 598 080) to less than R4 455 598 080 (which shall be valued on the same
        basis as per the mutually agreed methodology). provided that any reduction in the Collins Group’s
        net asset value as a consequence of a disposal of any asset by CPP or a subsidiary of CPP shall
        be disregarded for purposes of assessing whether a material adverse change has occurred; and/or
   -    reducing Collins’ interest in any assets specifically identified by U Reit, being assets not owned by
        CPP and which were of key consideration to U Reit in its assessment of the consolidated net asset
        value of Collins and its decision to enter into the Proposed Transaction.

4. FINANCIAL INFORMATION

   The financial information set out below is extracted from the audited results of the CPP group for the
   year ended 28 February 2023 prepared in terms of IFRS. The financial information set out below has
   not been reviewed or reported on by a reporting accountant in terms of section 8 of the Listings
   Requirements of the JSE Limited (the “Listings Requirements”) and is the responsibility of the
   Company’s directors.

   The net property income attributable to CPP amounted to R1 259 433 155 for the year ended 28
   February 2023.

   As at 28 February 2023, the net asset value of CPP is R3 578 733 561.

5. CATEGORISATION

   The Proposed Transaction is classified as a category 2 transaction in terms of the Listings
   Requirements and, accordingly, is not subject to shareholder approval.


Cape Town
21 August 2023


Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 21-08-2023 01:30:00
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