ATTACQ LIMITED - Disposal of investments in Cyprus and Serbia

Disposal of investments in Cyprus and Serbia

ATTACQ LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/000543/06)
JSE share code: ATT  ISIN: ZAE000177218
(“Attacq”)


DISPOSAL OF INVESTMENTS IN CYPRUS AND SERBIA


1.   INTRODUCTION

     AIH International Limited (“AIHI”), a wholly-owned subsidiary of Attacq, has entered into sale of
     shares and claims agreements (“agreements”) to dispose of its 48.75% equity shareholding and loan
     account in Atterbury Cyprus Limited (“Atterbury Cyprus”) and 25.0% equity shareholding and loan
     account in Atterbury Serbia B.V. (“Atterbury Serbia”) to Atterbury Europe B.V. (“Atterbury
     Europe”) for an aggregate consideration of €93 million, payable in cash (“the disposals”).

     Atterbury Cyprus owns a 99.67% shareholding in The Mall of Cyprus (MC) plc, the owner of the
     Shacolas Emporium Park located in Nicosia, Cyprus and a 99.50% shareholding in The Mall of
     Engomi (ME) plc, the owner of the Mall of Engomi, also located in Nicosia Cyprus.

     Atterbury Serbia holds 50.0% of a portfolio of seven retail properties in Serbia, including Serbia’s
     largest mall, Usce Shopping Centre located in the Serbian capital of Belgrade.

2.   RATIONALE FOR THE DISPOSALS

     Attacq holds a 37.32% shareholding in MAS Real Estate Inc. (“MAS”), which is listed on the Main
     Board of the Johannesburg Stock Exchange. In line with Attacq’s focus on its key investments and
     given MAS’ growing size, its change in investment focus to include Central and Eastern Europe and
     its increasing exposure to this region via its joint ventures with Prime Kapital, Attacq has made the
     strategic decision to exit its investments in Atterbury Cyprus and Atterbury Serbia and for MAS to be
     its primary entry point into these markets.

3.   SALIENT TERMS OF THE DISPOSALS

     3.1. Atterbury Cyprus

           3.1.1.   The consideration receivable in respect of Atterbury Cyprus is €57.8 million,
                    comprising €27.6 million in respect of the shares owned in Atterbury Cyprus and 
                    €30.2 million in respect of AIHI’s claims against Atterbury Cyprus.

           3.1.2.   The net asset value of and profits attributable to AIHI’s 48.75% equity shareholding
                    and loan account in Atterbury Cyprus for the year ended 30 June 2016 and the six
                    month period ended 31 December 2016 is set out below:

                                                             30 June 2016             31 December 2016
                    Net asset value                        R891.9 million               R802.8 million
                    Net profit/loss                        R124.1 million                R39.3 million

           3.1.3.   A deed of guarantee, dated 16 July 2015, was entered into between Attacq and Ermes
                    Department Stores Plc whereby Attacq agreed to guarantee certain obligations of
                    Atterbury Cyprus (“the guarantee”). Atterbury Europe undertakes to release Attacq
                    from all its obligations under the guarantee and will indemnify and keep Attacq
                    indemnified from and against all and any losses suffered or incurred by Attacq which
                    arise from the enforcement of the guarantee, until such guarantee is irrevocably released
                    and discharged.

      3.2. Atterbury Serbia

           3.2.1.   The consideration receivable in respect of Atterbury Serbia is €35.2 million, comprising
                    €23.2 million in respect of the shares owned in Atterbury Serbia and €12.0 million in
                    respect of AIHI’s claims against Atterbury Serbia.

           3.2.2.   The net asset value of and profits attributable to AIHI’s 25.0% equity shareholding and
                    loan account in Atterbury Serbia for the year ended 30 June 2016 and the six month
                    period ended 31 December 2016 is set out below:

                                                               30 June 2016              31 December 2016
                    Net asset value                           R34.2 million                R171.2 million
                    Net profit/loss                         R(0.55) million               R(41.9) million

      3.3. The effective date of the disposals is 31 March 2017.

      3.4. The disposals are inter-conditional on each other but not subject to any other conditions
           precedent.

      3.5. The proceeds will be repatriated to South Africa and applied in settling debt in Attacq’s South
           Africa property portfolio as well as in funding developments in Attacq’s Waterfall pipeline.

      3.6. The agreements provide for warranties and indemnities that are normal for transactions of this
           nature.

4.    CATEGORISATION OF TRANSACTION

      The disposals, in aggregate, are classified as a category 2 transaction in terms of paragraph 9.5(a) of
      the JSE Listings Requirements and accordingly does not require approval by Attacq shareholders.

31 March 2017


Sponsor
Java Capital

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