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Redefine - Issue Of Linked Units In Redefine For Cash Redefine Income Fund Limited (Registration No. 1999/018591/06) Share Code: RDF ISIN Code: ZAE000023503 ("Redefine" or "the company") ISSUE OF LINKED UNITS IN REDEFINE FOR CASH Introduction Corpcapital Corporate Finance is authorised to announce that Redefine has, in terms of the general authority granted to the Redefine board of directors, issued 54 688 304 Redefine linked units ("issued units") for cash at a price of R2,50 per linked unit, thereby raising R136 720 760 ("issue for cash"). The market demand for Redefine linked units has resulted in the overwhelming success of the issue for cash. The issued units were listed on the JSE Securities Exchange South Africa with effect from Monday, 27 January 2003. Rationale The issue for cash will result in the following benefits: - the reduction of long term debt, which had recently increased pursuant to the acquisition of the Rand Leases Properties Limited ("Rand Leases") property portfolio effective from 1 November 2002; - the repayment of the bank overdraft; - an increase in the market capitalisation of Redefine and the resultant improvement in the liquidity of its linked units; - an improvement in the net asset value of the company; and - the increase in the spread of unitholders as a result of the subscription for issued units by unitholders ranging from large institutions to individuals. Redefine`s borrowings The issue for cash will reduce Redefine`s borrowing levels (inclusive of the acquisition of the Rand Leases property portfolio) from 59% to approximately 55,7% of gross assets, amounting to R 1,3 billion of borrowings. Financial effects The financial effects of the issue for cash on earnings, headline earnings and net asset value per linked unit are set out below: Pro forma Pro forma before the after the
issue for issue for Change cash cash % (Cents) (Cents) Historical earnings 8,52 (1) 12,49 (2) 46,60 Historical headline 37,07(1) 36,36 (3) (1,92) earnings Historical net asset value including unpaid 244,00 (1) 245,38 (4) 0,57 distributions Whilst the issue for cash is enhancing to both historical earnings and historical net asset value per Redefine linked unit, the historical headline earnings are minimally dilutionary. This results from the low interest rate environment prevailing during the period from September 2001 to April 2002. Current interest rate levels would have resulted in non-dilutionary headline earnings. (1) The historical earnings and headline earnings per Redefine linked unit as set out in the "before issue for cash" column of the table, are based on Redefine`s audited results for the year ended 31 August 2002. The historical net asset value including unpaid distributions per Redefine linked unit as set out in the "before issue for cash" column of the table is based on Redefine`s audited balance sheet at 31 August 2002, in which the existing property portfolio is stated at fair value. (2) The historical earnings per Redefine linked unit as set out in the "after issue for cash" column of the table, is based on the assumption that the issued units were allotted on 1 September 2001. The interest saving is based on actual monthly interest rates incurred on the overdraft and long-term borrowings. It was further assumed that the proceeds were first utilised to settle the overdraft and thereafter long-term liabilities. A weighted average of 333 784 000 linked units were assumed to be in issue for the entire financial year. (3) The historical headline earnings per Redefine linked unit as set out in the "after issue for cash" column of the table, has been calculated in the manner described for the historical earnings per Redefine linked unit but excludes the "fair value" adjustment for the capital depreciation of the properties and listed linked unit portfolio. (4) The historical net asset value including unpaid distributions per Redefine linked unit as set out in the "after issue for cash" column of the table, is based on the assumption that the issued units were allotted on 1 September 2001 and the proceeds were first utilised to settle the overdraft and thereafter long term liabilities. 375 756 000 linked units were assumed to be in issue for the entire financial year. Corporate Advisor and Sponsor Sole Placement House Corpcapital Corporate Finance (a sponsor registered with the BOE Personal Stockbrokers JSE Securities Exchange South Africa) Date: 28/01/2003 11:17:26 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
