Sharenet Sites 
Sharenet Sites
The acquisition of a 25% interest in Delta International and revised guidance on delta’s forecast distibution
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
Share code: DLT ISIN: ZAE000172052
("Delta" or “the Company”)
REIT status approved
ANNOUNCEMENT REGARDING THE ACQUISITION OF A 25% INTEREST IN DELTA
INTERNATIONAL PROPERTY HOLDINGS LIMITED (“DELTA INTERNATIONAL”) AND
REVISED GUIDANCE ON DELTA’S FORECAST DISTIBUTION
1. Introduction
Holders of Delta linked units (“Delta Linked Unitholders”) are
advised that Delta has committed to participate in a private
placement to invited investors by Delta International, a company
registered in Bermuda with a primary listing on the Bermuda Stock
Exchange and a secondary listing on the AltX (“the Private
Placement”). In terms of the Private Placement, Delta will
acquire approximately 14 714 628 common shares in Delta
International (“the Acquisition”) at a price per common share of
US$2.00 (payable in Rands), resulting in an aggregate purchase
consideration of US$29 429 256 or R312 273 830 (three hundred and
twelve million two hundred and seventy three thousand eight
hundred and thirty Rand) (“the Purchase Consideration”),
calculated at an exchange rate of 10.61 ZAR:USD.
The effective date of the Acquisition is anticipated to be on or
about 14 July 2014 (“the Effective Date”).
2. Rationale for the Acquisition
The Acquisition offers Delta immediate access to a US Dollar
(“USD”) based investment and Rand hedge, together with a stake in
a quality office and retail property portfolio underpinned by
long term leases, low vacancies and strong anchor tenants. Delta
International offers attractive capital value and income growth
potential, as well as a USD based forward yield of 7.8% with
significant potential for future growth. Delta has secured USD
based debt facilities at interest rates of 4% per annum to fund
the Acquisition, resulting in a yield enhancing acquisition
within the fund.
3. Consideration for the Acquisition
The Purchase Consideration will be settled through new debt.
4. Conditions Precedent
There are no outstanding conditions precedent in relation to the
Acquisition.
5. Forecast information on the Acquisition (“Forecasts”)
The Forecasts, including the assumptions on which they are based
and the financial information from which they are prepared, are
the responsibility of the board of directors of Delta (“the
Board”). The Forecasts have not been reviewed or reported on by
the independent reporting accountants.
The Forecasts presented in the tables below have been prepared in
accordance with Delta’s accounting policies and in compliance
with International Financial Reporting Standards.
The Forecasts have been prepared from the Effective Date and
include forecast results for the eight months ending 28 February
2015 and for the year ending 29 February 2016.
Forecast Forecast
8 months Year ending
ending
29 February
28 February 2016
2015
R R
Distributable income from
investments
15 811 351 25 433 570
Delta International
distribution(1)(3)
Additional expenses
Finance costs(2)(3) 9 328 625 12 553 408
Net profit after tax 6 482 726 12 880 162
Distributable income 6 482 726 12 880 162
Notes:
1) Forecast distributions for Delta International are 15.59 USD
cents per share for the 12 months ended 30 June 2015 and
16.62 USD cents per share for the 12 months ended 30 June
2016.
2) Finance costs are incurred on a new USD based facility at a
variable interest rate of 4% nacm.
3) All income and expenses relating to the investment in Delta
International have been converted into Rands at an exchange
rate of 10.61 ZAR:USD being the spot exchange rate on 30 June
2014.
The unaudited pro forma financial effects of the Acquisition on
the net asset value and net tangible asset value per Delta linked
unit have not been disclosed as they are not significant.
6. Categorisation
The Acquisition is categorised as a Category 2 transaction in
terms of JSE Listings Requirements and accordingly does not
require approval by Delta Linked Unitholders.
7. Revised guidance on Delta’s forecast distribution
As contained in the prospects statement in the SENS announcement
released on 6 May 2014, Delta anticipated double digit growth in
the distribution per linked unit for the year ending 28 February
2015. Having regard to the information set out above in relation
to the Acquisition, the sale of Delta’s entire linked unitholding
in Ascension Properties Limited as set in the announcement
released on SENS on 25 June 2014, as well as reduced operating
costs on Delta’s 78 properties, the expected distribution per
linked unit has been revised and is anticipated to be between 83
cents and 84 cents per linked unit (“the Revised Forecasts”),
translating to a growth in distribution of between 14%-15% from
the prior comparable period.
The Revised Forecasts, including the assumptions on which they
are based and the financial information from which they are
prepared, are the responsibility of the Board. The Revised
Forecasts are based on the assumptions that the macro-economic
environment will not deteriorate markedly, budgeted renewals will
be concluded and that clients will be able to absorb rising rates
and utility costs. Budgeted rental income was based on
contractual escalations and market-related renewals. The
information and opinions contained above are recorded and
expressed in good faith and are based upon sources believed to be
reliable. No representation, warranty, undertaking or guarantee
of whatever nature is made or given concerning the accuracy
and/or completeness of such information and/or the correctness of
such opinions. The Revised Forecasts have not been reviewed or
reported on by the independent reporting accountants.
2 July 2014
Johannesburg
Investment bank and sponsor
Nedbank Capital
Date: 02/07/2014 05:12:00 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.
