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PMM - Premium Properties Limited - Rights Offer declaration announcement
14 January 2011
Premium Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/003601/06)
JSE share code: PMM
ISIN: ZAE000009254
("Premium" or "the Company")
Capital raising of R400 million by way of a partially underwritten
renounceable rights offer ("the rights offer")
1. Introduction
Premium linked unitholders are advised that Premium intends to raise
equity capital of up to R400 million by way of a partially underwritten
renounceable rights offer of 26 666 667 Premium linked units at an issue
price of 1500 cents per linked unit in the ratio of 20.5 rights for
every 100 linked units held on the record date for the rights offer.
The rights offer price represents a 3.3% discount to the 30 day volume-
weighted average price of linked units on the JSE Limited ("the JSE") as
at the close of business on Thursday, 13 January 2011.
The rights offer linked units will, upon allotment and issue rank pari
passu with the existing issued linked units in terms of both voting and
dividend rights. No excess rights offer units may be applied for by
linked unitholders.
2. Rationale for the rights offer
It is becoming increasingly difficult to expand and upgrade Premium`s
property portfolio relying only on bank funding. The capital raised will
create a platform from which to pursue further growth opportunities. The
additional capital raised by Premium pursuant to the rights offer will
be utilised to repay debt in the short term and thereafter to fund
acquisitions and several re-developments of properties including the
upgrade of Silway, a mixed-use property situated in Silverton Pretoria,
Die Meent and the Perm building, both of which are situated in the
Pretoria CBD and various other upgrades of properties. It is anticipated
that the upgrades will attract better tenants at higher rentals.
3. Underwriting and linked unitholder commitments
RMB Securities (Proprietary) Limited ("RMB Securities") and a consortium
comprising the Wapnick family (Alec Wapnick, Sharon Wapnick, Jeffrey
Wapnick and their associates) and Octodec Investments (Proprietary)
Limited ("the Consortium") have agreed to co-underwrite the rights offer
("the underwriting") up to a maximum value of R138 million, representing
9 200 000 rights offer linked units or 34.5% of the rights offer.
In terms of the underwriting agreement, RMB Securities and the
Consortium will co-underwrite the rights offer on a 50:50 ratio of
entitlement to the extent that the units underwritten are limited to 5
066 666 units. The remaining 4 133 334 units available to be
underwritten will be fully underwritten by RMB Securities.
The underwriting agreement is subject to certain conditions, which is
normal for a transaction of this nature. Further details of the
underwriting agreement are set out in the circular to linked unitholders
expected to be posted to linked unitholders on or about Monday, 7
February 2011.
In addition, Premium linked unitholders holding approximately 48.4% of
Premium`s linked units in issue have provided written commitments ("the
linked unitholder commitments") to follow all of their rights in respect
of the rights offer.
Accordingly, taking the linked unitholder commitments and the
underwriting into consideration, Premium will raise a minimum of R331.6
million from the rights offer.
4. Condition precedent
The final implementation of the rights offer is subject to the Registrar
of Companies granting its approval for the registrations required in
terms of the Companies Act No 61 of 1973 (as amended) for implementation
of the rights offer and all matters incidental thereto.
Linked unitholders are advised that the JSE has granted their approval
for the rights offer and all documents ancillary thereto.
5. Financial effects of the rights offer
The unaudited pro forma financial effects of the rights offer based on
Premium`s published unaudited results for the six months ended 31 August
2010, are set out below. The financial effects are for illustrative
purposes only, and because of its nature, may not give a fair reflection
of Premium`s financial position and results of operations after the
rights offer. The financial effects are the responsibility of the board
of directors of Premium.
Before rights Pro forma Change (%)
offer (cents) after rights
(1) offer (cents)
Distribution per linked unit 58.70 58.84 0.25%
Basic and diluted earnings per 53.89 49.25 (8.60%)
share (2)(3)(5)
Basic and diluted earnings per 112.30 107.86 (3.95%)
linked unit (2)(3)(5)
Net asset value per linked 1 362.72 1 384.15 1.57%
unit
Linked units in issue at year- 130 106 156 773
end (`000) (4)
Weighted average number of 130 106 156 773
linked units in issue (`000)
(4)
Notes:
1. The "Before the rights offer" information has been extracted
without adjustment from Premium`s unaudited results for the six
months ended 31 August 2010.
2. Finance costs have been adjusted to take into account the interest
saving resulting from the reduction in interest bearing debt by the
R396 987 613 to be received from the rights offer at an interest
rate of 8% per annum. The interest saving at a rate of 8% per annum
is based on the current cost of certain of Premium`s borrowings.
3. In line with historical treatment, transaction costs, of
approximately R3 012 387, have been set off against share and
debenture premium.
4. Linked units in issue have been adjusted for the 26 666 667 rights
offer units to be issued.
5. Debenture premium on the 26 666 667 rights offer units has been
amortised over the period of the debentures of 25 years at an
amount of R7 104 240.
6. Salient dates and times
The salient dates and times in respect of the Rights Offer are set out below:
2011
Finalisation date announcement released on SENS on Friday, 21 January
Finalisation date announcement published in the Monday, 24 January
press on
Last day to trade in Premium linked units on the Friday, 28 January
JSE in order to settle by the record date and thus
be recorded as a linked unitholder in order to be
entitled to participate in the rights offer on
Premium linked units trade ex-rights offer Monday, 31 January
entitlement on the JSE from
Listing and trading on the JSE of the letters of Monday, 31 January
allocation from the commencement of trade on
Record date in order to be entitled to participate Friday, 4 February
in the rights offer on
Rights offer opens at 09:00 and the circular Monday, 7 February
including a form of instruction to be mailed to
linked unitholders on
Letters of allocation credited to an electronic Monday, 7 February
account held at the transfer secretaries in
respect of holders of certificated Premium linked
units on
CSDP or broker accounts credited with entitlements Monday, 7 February
in respect of holders of dematerialised Premium
linked units on
Last day to trade in the letters of allocation on Friday, 18 February
the JSE in order to settle by close of the rights
offer on
Listing and trading on the JSE of rights offer Monday, 21 February
units commence at 09:00 on
Payment to be made and form of instruction to be Friday, 25 February
lodged with the transfer secretaries by holders of
certificated Premium linked unitholders by 12:00
on
Rights offer closes at 12:00 on Friday, 25 February
Record date for the letters of allocation on Friday, 25 February
Rights offer units issued on Monday, 28 February
CSDP or broker accounts of holders of Monday, 28 February
dematerialised Premium linked units debited and
updated with rights offer units on
Results of the rights offer announcement released Monday, 28 February
on SENS on
Announcement giving results of the rights offer Tuesday, 1 March
published in the national press on
Notes:
1. All times indicated are South African times.
2. Premium linked units may not be dematerialised/ re-materialised
between Monday, 31January 2011 and Friday, 4 February 2011, both
days inclusive.
3. CSDPs effect payment in respect of dematerialised unitholders on a
delivery-versus-payment method.
4. The abovementioned dates and times are subject to amendment. Any
such amendment will be released on SENS and published in the South
African press.
7. Finalisation announcement
It is anticipated that the finalisation announcement for the rights
offer will be released on SENS on Friday, 21 January 2011.
8. Posting of rights offer circular
Linked unitholders are advised that a circular containing full detail of
the terms of the rights offer and a form of instruction will be mailed
to all linked unitholders on or about Monday, 7 February 2011.
Johannesburg
14 January 2011
Investment Bank and Sponsor
Nedbank Capital
Legal adviser
TWB & Partners
Reporting accountant
Grant Thornton
Date: 14/01/2011 09:46:01 Supplied by www.sharenet.co.za
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