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SKJ - Sekunjalo - Acquisition of Sekunjalo House, Block F, The Terraces, Tokai Sekunjalo Investments Limited(Incorporated in the Republic of South Africa)(Registration number 1996/006093/06)Share code: SKJ & ISIN: ZAE000017893("Sekunjalo" or "the company") ANNOUNCEMENT REGARDING THE ACQUISITION OF SEKUNJALO HOUSE, BLOCK F, THE TERRACES, TOKAI IntroductionSekunjalo has entered into an agreement, dated 9 March 2007 with Market Demand Trading 190 (Proprietary) Limited, National Pride Trading 216 (Proprietary) Limited and Great Force Investments (Proprietary) Limited ("the vendors") to acquire the 3 portions of Sekunjalo House ("the property"), Block F, The Terraces, Tokai ("the Sekunjalo House acquisition"). The company indirectly owns 25% of the vendors, through its investment in Gemini Moon Trading 137 (Proprietary) Limited ("Gemini Moon").
Rationale for the Sekunjalo House acquisitionSekunjalo House currently houses the company`s head office and over the last year has been the place to which the group has consolidated its rental premises in Cape Town. The vast majority of the building is currently being let by Sekunjalo companies. The group has taken a longer term view on the transaction and believes this is not only an opportunity to invest in property, but one to leverage a large slice of its rental expense into a property that would benefit the group through capital growth in the future. Property details, consideration and settlement The property consists of offices of 1 758 square metres in size, as well as 42 parking bays and two store rooms. The total consideration for the Sekunjalo House acquisition is R19.2 million for the building and occupational rental for the 6 months to 28 February 2007. The consideration will be settled via cash of R12 million and a share issue of 9 million shares at 80c per share for the remaining R7.2 million. The initial agreements of the Sekunjalo House acquisition were signed on 23 November 2006 and by means of addenda, it was concluded on 9 March 2007. The transfer of the property into the name of the company took place on 22 June 2007. Pro forma financial effects of the Sekunjalo House acquisitionThe unaudited pro forma financial effects of the Sekunjalo House acquisition on Sekunjalo`s earnings, headline earnings, net asset value ("NAV") and tangible NAV per ordinary share are set out below. The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its of nature, may not give a true picture of Sekunjalo`s financial position and results of operations. The preparation of the pro forma financial effects is the responsibility of Sekunjalo`s directors. Per Sekunjalo Interim results Sekunjalo House Percentage ordinary share (Cents) at 28 Feb 2007 acquisition change (%) impact NAV for the group 101.62 101.72 0.09 Tangible NAV for 69.59 70.39 1.15 the group Shares in issue 396,795 405,795 (000`s) Weighted shares in issue (000`s) 370,829 379,829 Notes:1.) Based on Sekunjalo`s audited NAV and tangible NAV for the 6 months ended 28 February 2007. The financial effects of the Sekunjalo House acquisition on earnings and headline earnings are not material.2.) Based on the assumption that the Sekunjalo House acquisition was affected on 1 September 2006 for income statement purposes; and 28 February 2007 for balance sheet purposes3) Based on the shares in issue on the 28 February 2007 4 Based on the 9 million shares being issued for the Sekunjalo House acquisition and being weighted in full 5 Based on a dividend declared from the investment in Gemini MoonConditions precedent of the Sekunjalo House acquisition and other conditions There are no conditions precedent relating to the Sekunjalo House acquisition. Categorisation of the Sekunjalo House acquisitionThe Sekunjalo House acquisition is a Category 3 transaction in terms of the JSE Listings Requirements. Cape Town28 June 2007 SponsorAbsa Capital - a division of Absa Bank Limited Date: 28/06/2007 11:09:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.
