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Acquisition of new property portfolio
Fairvest Property Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/005011/06)
Linked unit code: FVT ISIN: ZAE000034658
(“Fairvest” or “the Company”)
ACQUISITION OF NEW PROPERTY PORTFOLIO
1. ACQUISITION AGREEMENT CONCLUDED
1.1. Linked unitholders of the Company (“Unitholders”) are hereby advised
that the Company has entered into an agreement (“Acquisition
Agreement”) with Old Mutual Life Assurance Company (South Africa)
Limited (“Seller”), to acquire from the Seller a portfolio of retail
properties, as detailed in paragraph 4 below (“Acquisition
Portfolio”), including the associated rental enterprise conducted in
respect of the Acquisition Portfolio (the “Acquisition”).
1.2. The effective date of the Acquisition shall occur on fulfilment of
the conditions precedent to the Acquisition Agreement (“Effective
Date”).
2. RATIONALE FOR THE ACQUISITION
The Acquisition is consistent with the Company’s growth strategy
whereby the Company will focus on acquiring retail assets with a
weighting in favour of non-metropolitan areas and lower LSM sectors.
3. PURCHASE CONSIDERATION
3.1. The purchase consideration due under the Acquisition Agreement for
the Acquisition Portfolio is R165 600 000 (including VAT at the rate
of 0%) (“Purchase Consideration”), payable by the Company, in cash,
on the date of registration of transfer of the Acquisition Portfolio
(“Transfer Date”).
3.2. Should the Transfer Date be later than 1 June 2014 (“Escalation
Date”), then with effect from the Escalation Date until the Transfer
Date, interest will be paid on the Purchase Consideration at a rate
equal to the prime rate.
4. THE ACQUISITION PORTFOLIO
4.1. The Acquisition Portfolio is comprised of:
4.1.1. Erf 29390 Mitchells Plain, in the City of Cape Town, Cape
Division, Province of the Western Cape, in extent 2808 square
metres (“Sonata Lane”);
4.1.2. Erf 47936 Mitchells Plain, in the City of Cape Town, Cape
Division, Province of the Western Cape, in extent 1,1091 hectares
(“OK Bazaars”); and
4.1.3. Erf 29389 Mitchells Plain, in the City of Cape Town, Cape
Division, Province of the Western Cape, in extent 2326 square
metres (“Mutual Plain”).
4.2. Details of the Acquisition Portfolio
Property Name Geographical Sector Gross Average Gross
and Address Location lettable Rental per m2
area (R/m2)
(“GLA”)
(m2)
Mutual Plain Western Cape Retail 4,069 R61.80
OK Bazaars Western Cape Retail 10,428 R72.90
Sonata Lane Western Cape Retail 2,158 R73.40
Total 16,655 R71.10
Notes:
i. The combined Purchase Consideration for the Acquisition
Portfolio is R165.6 million, while the estimated Purchase
Consideration per GLA (R/m2) is R9,943.
ii. The estimated Purchase Consideration is based on the assumption
that the Transfer Date occurs on or before 1 June 2014.
iii. The Purchase Consideration attributable to the Acquisition
Portfolio is considered to be the fair market value, as at the
date of acquisition thereof, as determined by the directors of
the Company. The directors of the Company are not independent
and are not registered as professional valuers or as
professional associate valuers in terms of the Property Valuers
Profession Act, No 47 of 2000.
5. CONDITIONS PRECEDENT
The Acquisition is subject to the fulfilment of the following
conditions precedent (“Conditions Precedent”):
5.1. the Company confirms, by no later than 13 December 2013, that it has
completed a due diligence in connection with the Acquisition
Portfolio to its satisfaction;
5.2. the Company confirms, by no later than 17 April 2014, that (i)
adequate funding has been secured by the Company from an acceptable
financial institution to acquire the Acquisition Portfolios (“Debt
Funding”) or the Company has successfully placed for cash with third
parties new ordinary linked units either in terms of a vendor
consideration placement and/or an issue of linked units for cash
(“Placement”), such that the Company is satisfied that it can fund,
wholly or partially, the acquisition of the Acquisition Portfolio
from the proceeds of the Placement and/or the Debt Funding;
5.3. the Company has confirmed, by no later than 17 April 2014, that it
has obtained all the necessary approvals (including shareholder
approval) and has completed all relevant processes required under
the JSE Listings Requirements for the transaction and, if
applicable, that the issue of linked units pursuant to the Placement
has taken place;
5.4. the board of directors of the Company has unconditionally approved
the Acquisition by no later than 19 December 2013;
5.5. the Seller’s investment committee has given its unconditional
approval to the Acquisition on or before 31 January 2014; and
5.6. by no later than 90 days after the submission of the filing, the
relevant Competition Authorities have approved the Acquisition,
either unconditionally or subject to such conditions as the Company
and the Seller agree are acceptable to them.
6. ADDITIONAL MATERIAL TERMS
6.1. The Acquisition Agreement provides for warranties that are normal
for a transaction of this nature.
6.2. The Seller and the Company shall use their respective best
endeavours to procure the simultaneous transfer of the properties
forming part of the Acquisition Portfolio to the Company, to the
extent that it is practically possible to do so, without permitting
undue delays after the Effective Date.
6.3. The Company is obliged to supply the Seller or its attorneys with an
individual bank guarantee for the due payment of the Purchase
Consideration by the 17 April 2014.
6.4. The Company shall be responsible for the transfer costs incurred in
respect of the registration of the transfer of the Acquisition
Portfolio.
7. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects in relation to the Acquisition are
still in the process of being finalised and will be published in due
course.
8. FORECAST FINANCIAL INFORMATION
The forecast financial information in relation to the Acquisition is
still in the process of being finalised and will be published in due
course.
9. CATEGORISATION AND FURTHER DOCUMENTATION
9.1. The Acquisition constitutes a Category 1 acquisition in terms of the
JSE Listings Requirements and, as such, will require Unitholder
approval.
9.2. Accordingly, a circular detailing the terms of the Acquisition and
containing a notice convening a general meeting, will be posted to
Unitholders in due course.
10. CAUTIONARY ANNOUNCEMENT
10.1. Unitholders are advised that the pro forma financial effects and the
forecast financial information in connection with the Acquisition is
still in the process of being finalised and will be published in due
course.
10.2. Until such further announcement is made, Unitholders are advised to
exercise caution when dealing in the Company’s securities.
14 November 2013
Cape Town
Sponsor and Corporate Advisor: PSG Capital
Date: 14/11/2013 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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