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Abridged Prospectus - Offer to invited investors, listing on the JSE Limited and The Lusaka Stock Exchange
African Land Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 2013/068973/06)
JSE share code: ALI
ISIN: ZAE00017885
(Approved as a REIT by the JSE)
(“African Land” or “the company” or “Afland”)
ABRIDGED PROSPECTUS – OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR SHARES AND LISTING OF AFRICAN LAND ON THE JSE LIMITED AND
THE LUSAKA STOCK EXCHANGE AND REVISED DATES AND TIMES OF THE OFFER PERIODS, LISTING DATES AND OTHER SALIENT DATES
This abridged prospectus relates to the prospectus issued by the company in compliance with the South African Companies Act,
2008 (Act 71 of 2008), as amended (the “South African Companies Act”), the Companies Regulations, 2011 promulgated in
Government Gazette No 34239 in terms of section 223 of the South African Companies Act (the “South African Companies
Regulations”), the Zambian Companies Act, Chapter 388 of the Laws of Zambia (the “Zambian Companies Act”), the Zambian
Securities Act, Chapter 354 of the Laws of Zambia (the “Zambian Securities Act”), the JSE Listings Requirements and the LuSE
Listings Requirements (the “prospectus”) for the purposes of providing information to the public regarding African Land and
being issued in respect of:
- a placement (the “private placement”) to raise in aggregate not less than US$79.7 million (before preliminary expenses)
payable in Rand or Kwacha, as the case may be, determined at the prevailing US$:Rand exchange rate, in respect of the
JSE Listing, as defined below and the US$:Kwacha exchange rate, in respect of the LuSE Listing, as defined below, at
12:00 on the closing date of the offer (being 12:00 on the day which the offer to invited investors shall close, which is
expected to be 7 November 2013 in respect of the JSE Listing and 22 November 2013 in respect of the LuSE Listing,
with any delays to be announced on SENS) (the “closing date of the offer”), as per the Bloomberg spot rate by way of
an offer for subscription to invited investors for private placement shares in the company at an indicative subscription
price of US$1.00 per private placement share with the final issue price to be determined by demand;
- the subsequent listing of all of the shares of the company as a primary listing on the “Retail REITs” sector of the JSE (the
“JSE Listing”); and
- the subsequent listing of certain of the shares of the company as a secondary listing on the LuSE (the “LuSE Listing”).
This abridged prospectus is not an invitation to the public to subscribe for and/or purchase shares in the company, but is issued in
compliance with the South African Companies Act, the South African Companies Regulations, the Zambian Companies Act, the
Zambian Securities Act, the JSE Listings Requirements and the LuSE Listings Requirements for the purposes of providing
information to the public regarding African Land and to invited investors in relation to the private placement.
Invited investors will be contacted by and will receive application forms to participate in the private placement from the book
runner, in respect of the listings, Java Capital, or from the joint book runner, in respect of the LuSE Listing, African Alliance.
As the private placement constitutes an initial public offering as regulated by the South African Companies Act, it is accompanied
by a registered prospectus. This announcement contains the salient information in respect of African Land, which is more fully
described in the prospectus which will be made available to invited investors. For a full appreciation and understanding of African
Land, the private placement and the listings, the prospectus should be read in its entirety.
Terms defined in the prospectus shall bear the same meaning in this abridged prospectus.
1. Introduction
The JSE has granted African Land a primary listing of all its issued shares (excluding 8 533 600 ordinary shares of no par
value which will be listed shortly after the JSE listing date) in the “Retail REITs” sector of the JSE, in terms of the FTSE
classification, under the abbreviated name “Afland” with JSE share code “ALI” and ISIN code “ZAE00017885” with
effect from the commencement of trading on the JSE on Friday, 15 November 2013, subject to the company having
satisfied the free float requirements in terms of paragraph 4.28(e) of the JSE Listings Requirements, being at least 20% of
the company’s issued share capital held by public shareholders.
Subject to and conditional upon the approval by the JSE of the listing on the JSE and the requisite regulatory approvals
being obtained from each of the Zambian Securities and Exchange Commission and the LuSE, certain of the issued shares
of the company are expected to be listed on the LuSE from the commencement of trading on that stock exchange on
Friday, 29 November 2013.
2. Overview of African Land
The company was incorporated in South Africa as a public company on 23 April 2013 under the name African Land
Investments Limited.
With effect from 6 September 2013, the company had secured its first high quality property asset by acquiring the entire
issued share capital of MHCL, which owns the Manda Hill Shopping Centre.
“Manda Hill Shopping Centre” is situated in Lusaka, Zambia. It is the first regional shopping centre in Zambia and is the
largest shopping centre in sub-Saharan Africa outside of South Africa.
The company’s vision is to grow and extend its property portfolio in a manner that will be value accretive to shareholders.
The company’s medium-term objective is to grow its investment portfolio by acquiring quality retail, office, light industrial
and mixed use properties in key sub-Saharan African jurisdictions, initially including Angola, Ghana, Kenya,
Mozambique, Nigeria and Zambia, as well as selected countries in Francophone Africa, such as Senegal.
The company has secured a pre-emptive right on the Copperbelt City retail development in Kitwe, Zambia, which is
scheduled for completion in the third quarter of 2015.
The company will focus on large and defensive retail and office properties that are occupied mostly by multinational and
South African companies, as well as light industrial properties where long-term leases to blue-chip multinational and South
African companies have been secured. The company’s long term objective is to establish a competitive advantage in its
ability to secure large quality property assets.
The company’s management team is well positioned to establish a portfolio of large quality property assets in sub-Saharan
Africa. The company has at its disposal, executives, on the ground property managers and portfolio administrators with the
experience and expertise required to operate in the various African jurisdictions identified and complemented by a board of
non-executive directors with experience in property and Africa. Furthermore, the company will aim to minimise any tax
leakage with effective tax planning.
The financial year end of the company and group is 30 September. Accordingly, the first financial year of the company will
be 30 September 2013.
The company is targeting property assets exceeding US$1 billion over the next five years. The company aims to build a
geographically and sectorally well diversified property portfolio predominantly in sub-Saharan Africa across 6 markets
outside of South Africa.
3. Prospects
Until additional assets are acquired, the performance of the company will be driven by the performance of the Manda Hill
Shopping Centre.
The company has secured a pre-emptive right to purchase the 43 000m2 Copperbelt City retail development in Kitwe,
Zambia. The real estate development is located in Kitwe, near a main transport route to Chingola, and further, the southern
DRC. Kitwe is located in the centre of 7 highly urbanized districts (all within a 75km radius), more commonly known as
the “Copperbelt Province”.
Management have identified a tangible pipeline of properties which will be for sale in key sub Saharan African markets
including Nigeria, Kenya and Ghana, in the retail, office and light industrial sectors. The prospective pipeline has an
approximate value of $300 million in 2014.
Generally, acquisitions will only be considered by the company if they are yield enhancing, and the group will not embark
on any speculative development activity.
The executive directors of African Land have entered into negotiations with developers, private equity real estate funds and
reputable real estate brokerage firms for projects nearing completion in Ghana, Nigeria, Mozambique and Kenya. African
Land is at various stages of discussion with these developers and real estate brokerage firms and will aim to secure
forward-sale and pre-emptive rights to purchase these assets once they are complete and have a twelve month operating
history. African Land will consider minority interests in properties if it can provide asset management expertise which will
enhance the value of the target properties.
4. Summary forecast information
Reflecting the performance of Manda Hill Shopping Centre, set out below are the summary forecast statements of
comprehensive income of the group (“the forecasts”) for the year ending 30 September 2014 and the year ending
30 September 2015.
Forecast for the Forecast for the
year ending year ending
30 Sep 2014 30 Sep 2015
US$ US$
Total revenue 14 124 001 14 383 581
Property operating expenses (2 836 727) (3 007 954)
Net property and related income 11 287 274 11 375 627
Administrative expenses (635 000) (673 100)
Net operating profit 10 652 274 10 702 527
Changes in fair values (547 700) (38 369)
Investment property - -
Straight-line rental income accrual (547 700) (38 369)
Net finance charges (3 038 412) (2 934 242)
Net profit 7 066 162 7 729 916
Reconciliation between earnings, headline earnings and distributable income
Profit for the year attributable to shareholders 7 066 162 7 729 916
Change in fair value of investment property 547 700 38 369
Headline earnings 7 613 862 7 768 285
Straight-line rental income accrual (547 700) (38 369)
Distributable profit 7 066 162 7 729 916
Amortisation of debt structuring fee 191 667 191 667
Distributable income 7 257 829 7 921 583
Number of shares in issue 89 692 495 89 692 495
Weighted average number of shares in issue 89 692 495 89 692 495
Basic and diluted earnings per share (US$ cents) 7.88 8.62
Headline earnings per share (US$ cents) 8.49 8.66
Distributable income per share (US$ cents) 8.09 8.83
The figures set out above are extracted from detailed forecasts for the year ending 30 September 2014 and
30 September 2015 and have been reported on by the independent reporting accountant Grant Thornton. The detailed
forecasts, the independent reporting accountant’s report on the detailed forecast and the assumptions on which the detailed
forecasts are based, are set out in the prospectus.
5. Asset management
African Land’s asset management function is undertaken by the executives based in Johannesburg. The company’s
executives have experience in African property as well as in doing business in Africa. As the property portfolio grows, the
company will continue to utilise an internal asset management model and will strategically increase its staff complement
where required.
6. Property management
Manda Hill is internally managed by an experienced on-the-ground centre management team, tenant co-ordinators and
accounts department. The team at the centre interacts with tenants and shoppers on a daily basis and has established
relationships with all tenants.
7. Share capital
Immediately prior to the private placement and the JSE Listing and the LuSE Listing:
- the authorised share capital of the company will comprise 2 000 000 000 ordinary shares of no par value;
- the issued share capital of the company will comprise 9 991 600 ordinary shares of no par value;
- the stated capital of the company will amount to US$9 492 100; and
- there will be no treasury shares in issue.
Assuming that the private placement is fully subscribed for at the indicative subscription price of US$1.00 per private
placement share, immediately after the private placement and the JSE Listing and the LuSE Listing:
- the issued share capital of the company will comprise 89 692 495 ordinary shares of no par value, of which
81 158 895 ordinary shares of no par value will be listed (the balance of 8 533 600 ordinary shares of no par value
to be listed shortly thereafter), the reason for such later listing is set out in paragraph 2 of Annexure 10 to the
prospectus;
- the stated capital of the company will amount to US$87.0 million; and
- there will be no treasury shares in issue.
On listing on the JSE, assuming that the private placement is fully subscribed for, the anticipated market capitalisation of
the company will be approximately US$87.5 million.
8. Distribution policy
The company intends making six-monthly dividend distributions, which are expected to be declared for the periods ending
31 March and 30 September each year, and paid within 4 months of the end of each such period.
The company’s current distribution policy is to distribute 100% of its total distributable profits as a distribution to the
holders of its listed securities.
9. Details of the private placement
The private placement to raise in aggregate not less than US$79.7 million (before preliminary expenses) payable in Rand
or Kwacha, as the case may be, determined at the prevailing US$:Rand exchange rate, in respect of the JSE Listing and the
US$:Kwacha exchange rate, in respect of the LuSE Listing, at 12:00 on the respective closing dates of the offer as per the
Bloomberg spot rate by way of an offer for subscription to invited investors for private placement shares in the company at
an indicative subscription price of US$1.00 per private placement share with the issue price to be determined by demand.
The JSE Listing is subject to:
- the achievement of a spread of public shareholders acceptable to the JSE, in terms of paragraph 4.28(e) of the JSE
Listings Requirements, being at least 20% of the issued share capital of the company being held by public
shareholders; and
- a minimum subscription of private placement shares resulting in an amount of US$79.7 million being raised in
terms of the private placement.
The LuSE Listing is subject to:
- the JSE Listing; and
- the requisite regulatory approvals being obtained from each of the Zambian Securities and Exchange Commission
and the LuSE.
If the conditions precedent to the JSE Listing fail, the private placement and any acceptance thereof shall not be of any
force or effect and no person shall have a claim of whatsoever nature against African Land or any other person as a result
of the failure of any condition. If the conditions precedent to the LuSE Listing fail, the offer to invited investors in Zambia
under the private placement and any acceptance thereof shall not be of any force or effect and no person shall have any
claim of whatsoever nature against African Land or any person as a result of the failure of any condition.
The private placement will not be underwritten.
10. Purposes of the offer
The proceeds of the private placement, being a minimum subscription amount of US$79.7 million, will be utilised to:
- settle the consideration for Manda Hill, which is payable in respect of the discharge of the MHCL shareholder
dividend loan (of US$64.3 million) and partly settle (in an amount of US$12.7 million) the consideration payable in
respect of the acquisition of the MHCL shareholder capital debentures (of US$78.7 million); and
- set-off the preliminary and other expenses of US$2.7 million.
11. Revised dates and times of the offer and other salient dates
2013
Opening date of the JSE offer under the South African private placement (09:00) Thursday, 31 October
Closing date of the JSE offer under the South African private placement (12:00) Thursday, 7 November
Notification of allotments to subscribing invited investors in terms of the South Friday, 8 November
African private placement
Results of South African private placement released on SENS and on the website of Monday, 11 November
the LuSE
Results of the South African private placement published in the press Tuesday, 12 November
Listing of shares and the commencement of trading on the JSE (09:00) Friday, 15 November
Accounts at CSDP or broker updated and debited in respect of JSE dematerialised Friday, 15 November
shareholders
Opening date of the LuSE offer under the Zambian private placement (09:00) Monday, 18 November
Closing date of the LuSE offer under the Zambian private placement (12:00) Friday, 22 November
Notification of allotments to subscribing invited investors in terms of the Zambian Monday, 25 November
private placement
Results of Zambian private placement released on SENS and on the website of the Tuesday, 26 November
LuSE
Results of the Zambian private placement published in the press Wednesday, 27 November
Listing of shares and the commencement of trading on the LuSE (expected to be Friday, 29 November
11:00)
Accounts at CSD custodian or broker updated and debited in respect of LuSE Friday, 29 November
dematerialised shareholders
The above dates and times are South African dates and times and are subject to amendment. Any such amendment will be
released on SENS and published in the press and published on the website of the LuSE.
12. Directors
The full names, ages, business addresses, occupations and capacities of the directors of African Land are outlined below:
Full name, age and Qualification Occupation Capacity Business address
nationality
Thamsanqa “Tami” MSc (Plant Systematics and Finance Independent 59 16th Road,
Sokutu Advanced Ecology), UCT: Executive / non-executive Midrand, 1685,
(49) Certificate in Environmental Banker chairman Johannesburg South
South African Management Theory, UCT: Africa
Senior Executive Programme,
Wits/Harvard
Kevindra “Kevin” BSc, MSc, MBA, University Property Chief executive 9 Gordon Hill Road,
Teeroovengadum of Leicester Executive officer Parktown,
(39) Johannesburg
Mauritian
Mark Mario di Chartered Financial 9 Gordon Hill Road,
Pasquale Accountant director Parktown,
(29) Johannesburg
South African Chartered Financial Analyst
(CFA) Charter holder
Kenneth Lewis BCom / CAIB(SA) Banker Independent Nedbank Corporate
“Ken” Reynolds non-executive Property Finance, 4th
(54) director Floor, Block I, 135
South African Rivonia Road,
Sandown, Sandton,
2196
Dominic Kwame Chartered Accountant (ACA - Banker Independent No. 1 Aviation Road,
Adu England & Wales) non-executive Airport Residential
(50) University of London – MSc. director Area, PMB CT470,
Ghanaian Economics Accra, Ghana
University of Manchester
(UK) - BA (Econ) Economics
Zaid Ghoul University of Jordan - B.SC. Investment Independent MSJ Consulting,
(44) Degree in Accounting, Fund Manager non-executive Rimal Building, Unit
Jordanian Economics & Statistics director 2, The Walk,
Certified Public Accountant Jumeirah Beach
(CPA) – Illinois Board of Residence, Dubai,
Examiners, USA UAE
Chartered Financial Analyst
(CFA) Charter holder, USA
Ahmer Naushad Bachelor’s degree in Hotel Investment Independent Majid Al Futtaim
(39) and Restaurant Administration Fund Manager non-executive Towers 2, Dubai
Canadian (Washington State director UAE
University), MBA,
Washington State University,
Professional Development
Program, Executive Education
Certification (Cornell
University)
Fungai Ruwende Harvard Business School Investment Independent 10 5th Avenue,
(45) MBA, Business Fund Manager non-executive Parktown North,
Zimbabwean Administration, 1996 - 1998 director Johannesburg, 2193
Activities and Societies:
Africa Club
University of Zimbabwe
Bsc Eng Honours, Electrical
Engineering, 1987 - 1990
Roderick High Ross LLB (Hons) Edinburgh Attorney Independent ALN House, Eldama
“Roddy” McKean University, UK non-executive Ravine Gardens,
(57) Admitted as a solicitor to the director Westlands, Nairobi
British Supreme Courts of England &
Wales, Scotland and Hong
Kong
13. Prospectus
The prospectus, dated 18 October 2013, which is available only in English, has been issued. The timetable as is set out in
the prospectus has been amended and the timetable as is set out in paragraph 11 of this abridged prospectus is the correct
timetable as at the date of this abridged prospectus. Any further amendment to the dates and times of the offer periods
and/or listing dates will be released on SENS and published in the press and published on the website of the LuSE.
Copies of the prospectus may be obtained between 08:30 and 17:00 on business days from Thursday, 31 October 2013 up
to and including Friday, 29 November 2013, at the following addresses:
- African Land
“The Pines” 9 Gordon Hill Road, Parktown 2193, Johannesburg, South Africa
- Java Capital
2nd Floor, 2 Arnold Road, Rosebank, 2196, Johannesburg, South Africa
- SA transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001, South Africa
- Zambian transfer secretaries
Lusaka Stock Exchange Central Shares Depository Limited
3rd Floor Exchange Building, Cairo Road, Central Park, Lusaka, Zambia
31 October 2013
Corporate advisor, sole bookrunner in South African and joint bookrunner in Zambia and JSE sponsor
Java Capital
Independent reporting accountants and auditors
Grant Thornton
SA and international attorneys and advisors as to South African tax
Norton Rose Fulbright
Independent JSE transaction sponsor
Deloitte
Zambian attorneys and advisors as to Zambian tax
Corpus Legal Practitioners
Independent property valuer
Mills Fitchet
LuSE sponsoring broker and joint bookrunner in Zambia
African Alliance
Date: 31/10/2013 12:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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