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Sharenet Sites
Update on the disposal of a property by a wholly owned subsidiary of Freedom
FREEDOM PROPERTY FUND LIMITED
Incorporated in the Republic of South Africa
Registration number: 2012/129186/06
Share code: FDP
ISIN: ZAE000185260
(“Freedom” or “the Company” or “the Group”)
UPDATE ON THE DISPOSAL OF A PROPERTY BY A WHOLLY OWNED SUBSIDIARY OF FREEDOM
1. INTRODUCTION
1.1 Shareholders are referred to the following announcements issued by the Company:
1.1.1 SENS announcement dated 29 May 2019 – in which the board of directors of Freedom
(“Board”) announced that Freedom had, through its wholly owned subsidiaries,
Zambesa Investments Proprietary Limited (“Zambesa”) and Tubatse Estate Proprietary
Limited (“Tubatse Estate”), concluded sales of property agreements (“Agreements”)
with Cecilo Investments CC (“Cecilo”) relating to:
1.1.1.1 the disposal by Zambesa of 8 residential units plus 33 serviced stands in the
sectional scheme known as Tubatse Homes SS 758/2017 to Cecilo (“Tubatse
Homes Transaction”); and
1.1.1.2 the disposal by Tubatse Estate of the remaining extent of the Burgersfort
Extension 40 Township (“Tubatse Property”) situated at Portion 6 of the farm
Witgatboom 316 (“Tubatse Estate Transaction”),
(collectively “the Disposals”).
1.1.2 SENS announcements dated 10 July 2019 and 23 September 2019 – in which the Board
advised that certain conditions precedent to the Disposals had not been fulfilled within
the specified timeline and that the Company was unable to proceed with the
Disposals.
1.2 Shareholders are advised that the Company and Cecilo signed an addendum to the agreement
referred to in paragraph 1.1.1.2 on 13 March 2020 in terms of which the consideration and
conditions precedent in respect of the Tubatse Estate Transaction were amended as detailed
in paragraphs 3.
Freedom is a capital growth fund with a diversified portfolio of properties in the commercial, industrial
and residential sectors. Cecilo is a property developer.
2. RATIONALE FOR THE TRANSACTION
The Tubatse Estate Transaction is in line with Freedom’s strategy of divesting of its non-core assets as
communicated to shareholders on 15 March 2016.
The proceeds from the Tubatse Estate Transaction will be utilised to reduce debt in the Group.
3. PURCHASE CONSIDERATION
The total purchase consideration is R50 million (exclusive of Value Added Tax), settled in cash as
follows:
• R1 million, constituting a non-refundable deposit, which has already been paid;
• R7 million, which has been paid and is held in an interest-bearing account held by the Tubatse
Estate attorneys until date of registration; and
• the balance of R42 million on registration of transfer of the property into Tubatse Estate’s
name subject to Cecilo furnishing the Conveyancers (as defined within the Agreements) on or
before 4 May 2020 with a bank guarantee in respect of this amount.
3.1 The Tubatse Estate Transaction has been concluded “voetstoots”, save for warranties that are
standard in respect of transactions of this nature.
4. CONDITIONS PRECEDENT
The Tubatse Estate Transaction is conditional, inter alia, upon:
• Cecilo providing the bank guarantees as detailed in paragraph 3; and
• approval being granted for the Tubatse Estate Transaction by Freedom shareholders in a
general meeting.
5. INFORMATION RELATING TO THE TUBATSE PROPERTY
The specifics of the Tubatse Property are as follows:
Location: The remaining extent of Burgersfort Extension 40
Township situated at Portion 6 of the farm Witgatboom
316, Registration Division KT, Limpopo Province
Rentable area: None
Valuation: (Note 1) R20 700 000
Weighted average rental per None
square metre for the rentable
area: (Note 2)
Original purchase price: R18 400 000
Date initially acquired: 20 March 2014
Note 1 – An independent external valuation was obtained from Real Insights Proprietary
Limited in respect of the Tubatse Property (“Independent Valuation”), which valuation was
undertaken by TLJ Behrens and HN Hartman (Professional Associated Valuer and Professional
Valuer, respectively), registered without restriction in terms of the Property Valuers Profession
Act, No. 47 of 2000. The value attributed at 28 February 2019 has been derived from the
comparable sales method of valuation.
Note 2 – No rental income applies to this property.
6. EFFECTIVE DATE
The effective date of the Tubatse Estate Transaction will be the date of fulfilment of all the conditions
precedent.
7. FINANCIAL INFORMATION ATTRIBUTABLE TO THE TUBATSE PROPERTY
7.1 The value of the Tubatse Property is R20 700 000, in terms of the Independent Valuation.
7.2 There is no rental income applicable to the Tubatse Property in respect of the financial year
ended 28 February 2020, based on the unaudited management accounts of Freedom,
prepared in accordance with the International Financial Reporting Standards. Freedom is
satisfied with the quality of the management accounts.
8. CATEGORISATION
In terms of the JSE Limited Listings Requirements, the Tubatse Estate Transaction is categorised as a
Category 1 transaction, is subject to shareholders’ approval at a general meeting and a circular to
Freedom shareholders will accordingly be distributed in due course.
Paarl
16 March 2020
Sponsor and Corporate Advisor
Questco Corporate Advisory Proprietary Limited
Date: 16-03-2020 05:44:00
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