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Announcement relating to Small Related Party Transactions
Value Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1997/002203/06
Share code: VLE
ISIN code: ZAE000016507
(“Value” or “the Group”)
ANNOUNCEMENT RELATING TO SMALL RELATED PARTY TRANSACTIONS
1. Introduction, rationale and salient terms
Value provides integrated logistics services throughout South Africa. These services are
conducted by utilising its premises, comprising warehousing, distribution and depot
infrastructure, which are crucial elements in respect of the performance of its operations.
Shareholders of Value are advised that Value Logistics Limited (a wholly owned
subsidiary of Value) (“the Lessee”) has entered into the following triple nett lease
agreements (“the Leases”) with various property companies represented by Mr Steven
Gottschalk (a director of Value), in respect of the following:
1.1
Related party property owning company: Lougot Property Investments (Pty) Ltd
Property description: Holding No 230, Estoire Settlement,
Bloemfontein, Free State Province,
Registration Division Bloemfontein Rd,
Mangaung Metropolitan Municipality
Nature of lease: Renewal of expired lease
Lease commencement date: 1 June 2020
Lease expiring date: 31 May 2025
Lease period: 5 years
Monthly rental (excluding VAT): R236,000.00 (for the first year)
Annual escalation in second year of the lease 6,5%
Re-evaluation of market rentals and annual Rentals commencing 1 June 2022 and
escalations 1 June 2024
The Lease is not subject to the fulfilment of any conditions precedent.
1.2
Related party property owning company: Lougot Property Investments (Pty) Ltd
Property description: Portion of Erven 13547 and 6192
Pietersburg Ext 17, Polokwane,
Registration Division L.S. Limpopo
Province, Polokwane Local Municipality
Nature of lease: Renewal of expired lease
Lease commencement date: 1 April 2020
Lease expiring date: 31 March 2025
Lease period: 5 years
Monthly rental (excluding VAT): R118,000.00 (for the first year)
Annual escalation in second year of the lease 6,5%
Re-evaluation of market rentals and annual Rentals commencing 1 April 2022 and
escalations 1 April 2024
The Lease is not subject to the fulfilment of any conditions precedent.
1.3
Related party property owning company: Future Indefinite Investments 180 (Pty) Ltd
Property description: Portion 96 of Farm Rietfontein 63, IR,
Ekurhuleni, situated at 147 North Reef
Road, Wilbart, Germiston, Ekurhuleni
Metropolitan Municipality
Nature of lease: Renewal of expired lease
Lease commencement date: 1 March 2020
Lease expiring date: 28 February 2021
Lease period: 12 months
Monthly rental (excluding VAT): R208,000.00
The Lease is not subject to the fulfilment of any conditions precedent.
1.4
Related party property owning company: 471 Church Street (Pty) Ltd
Property description: Erf 285, Crown Ext 8, Registration Division
I.Q., Gauteng Province, situated at
11 Lepus Road, Crown Ext 8, West Rand,
City of Johannesburg
Nature of lease: Renewal of expired lease
Lease commencement date: 1 March 2020
Lease expiring date: 28 February 2021
Lease period: 12 months
Monthly rental (excluding VAT): R112,000.00
The Lease is not subject to the fulfilment of any conditions precedent.
1.5
Related party property owning company: Future Indefinite Investments 180 (Pty Ltd
Property description: Portion 14 of Erf 1250 Clayville, Extension
14, Johannesburg, Registration Division
J.R., Ekurhuleni Metropolitan Municipality
Nature of lease: Renewal of expired lease
Lease commencement date: 1 March 2020
Lease expiring date: 31 March 2020
Lease period: 1 month
Monthly rental (excluding VAT): R1,480,000.00
The Lease is not subject to the fulfilment of any conditions precedent.
It is Value’s intention to enter into a longer term lease subject to concluding a mutually
accepted lease agreement for the renewal of a substantial warehousing and distribution
contract.
1.6
Related party property owning company: Lougot Property Investments (Pty Ltd
Property description: Portion 477of the Farm 728
Joostenbergvlakte, Registration division
Paarl RD, Western Cape Province, City of
Cape Town
Nature of lease: Renewal of expired lease
Lease commencement date: 1 March 2020
Lease expiring date: 31 March 2020
Lease period: 1 month
Monthly rental (excluding VAT): R649,351.00
The Lease is not subject to the fulfilment of any conditions precedent.
It is Value’s intention to enter into a longer term lease subject to concluding a mutually
accepted lease agreement for the renewal of a substantial warehousing and distribution
contract.
2. Related party considerations
The JSE Limited (“JSE”) has ruled that the Leases are deemed to be related party
transactions in terms of the JSE Listings Requirements as a consequence of
Mr Gottschalk being a director of Value and the Lessee and furthermore as a result of Mr
Gottschalk indirectly owning more than 20% of the shares in Value.
The estimated aggregated rental value (assuming annual escalations are applied for the
full lease period) amounts to R30 155 937.86. The aforementioned Leases will therefore
be deemed small related party transactions in terms of Section 10.7 of the JSE Listing
Requirements.
The board of directors of Value (“the Board”) is required to provide the JSE with written
confirmation from an independent professional expert confirming that the terms of the
Leases are fair insofar as Shareholders are concerned.
Mazars Corporate Finance Proprietary Limited (“Mazars Corporate Finance”) has been
appointed as the independent professional expert by the Board and provided the Board
with fairness opinions with regard to the Leases (“Fairness Opinions”) in which they have
advised the Board that they believe that the terms of the Leases are fair to Shareholders.
The Fairness Opinions will be accessible for inspection on Value’s website at
https://value.co.za/wp-content/uploads/2020/05/Fairness-Opinion-Issued-26-May-2020.pdf
for a period of 28 (twenty eight) days from the date of this announcement.
Johannesburg
26 May 2020
Sponsor:
Investec Bank Limited
Independent Expert:
Mazars Corporate Finance (Pty) Ltd
Date: 26-05-2020 04:17:00
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