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PPR - Putprop Limited - Acquisition of Detpak Kya Sands

Release Date: 20/06/2011 13:43
Code(s): PPR
Wrap Text

PPR - Putprop Limited - Acquisition of Detpak Kya Sands PUTPROP LIMITED Incorporated in the Republic of South Africa (Registration number 1988/001085/06) Share code: PPR ISIN: ZAE000072310 ("Putprop" or "the company") ACQUISITION OF DETPAK KYA SANDS 1 INTRODUCTION AND RATIONALE The board of directors of Putprop ("the Board") is pleased to inform shareholders that Putprop has entered into an agreement of sale dated 20 June 2011 ("the Agreement") with Dorpao (Proprietary) Limited ("Dorpao" or "the Seller") to acquire the eight properties known as Detpak Kya Sands, together with all buildings and improvements thereon ("the Property"), as one indivisible transaction, from Dorpao ("the Acquisition"). The acquisition of Detpak Kya Sands complies with the company`s stated objective of strategic investments focussed on industrial and commercial opportunities, where yields are enhancing in the medium and long term as well as broadening of the current tenant base to reduce the risk of over dependence on a limited number of tenants. 2 THE ACQUISITION 2.1 Details of the Property Detpak Kya Sands, which comprises eight properties situated on Erf Numbers 384-7 and 393-6 Kya Sand Extension 42 Township, Registration Division I.Q., Province of Gauteng, together with all buildings and improvements thereon, measures 5 785 square metres. The gross lettable area of 5 182 square metres includes a factory/warehouse, offices and other structures of 4 231, 439 and 512 square metres respectively. The weighted average rental per square metre is R30.68. The current tenant, whose six year lease expires in December 2015, is a member of a global packaging group. For the period ending 31 December 2012, rent escalates at a rate of 3% per year and thereafter, at a rate of 6% per year. 2.2 Purchase consideration and effective date The total purchase consideration of R13 800 000, which will be settled entirely in internally generated cash, will be paid to the Seller as follows:
- R2 000 000 will be paid by the company to the transferring attorneys within five days of the signature date of the Agreement and will be held in an interest bearing trust account for the benefit of Putprop, pending registration of transfer of the Property in favour of the company ("transfer"); and - R11 800 000, to be secured by way of a bank guarantee issued in favour of Dorpao and delivered to the transferring attorneys within 15 days of signature date of the Agreement, will be paid on registration of transfer. All costs relating to the transfer of the Property in favour of Putprop will be paid by the company. The estate agents` commission, amounting to R414 000, will be paid by the Seller from the proceeds of the sale on registration of transfer. The effective date of the Acquisition will be the date of registration of transfer . A valuation of the Property was performed prior to the Acquisition by Putprop`s directors, who are not registered as professional valuers in terms of the Property Valuers Profession Act, 2000 (No 47 of 2000). The Property was valued at an amount of R15 000 000. 2.3 Conditions precedent The Acquisition is not subject to any conditions precedent and the Property has been sold "voetstoots". 3 PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION The table below sets out the unaudited pro forma financial effects of the Acquisition, on Putprop`s earnings per share, headline earnings per share, net asset value per share and tangible net asset value per share. The unaudited pro forma financial effects have been prepared to illustrate the impact of the Acquisition on the reported financial information of Putprop for the six months ended 31 December 2010, had the Acquisition occurred on 1 July 2010 for income statement purposes and on 31 December 2010 for balance sheet purposes. The unaudited pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards and that are consistent with those applied in the interim results for the six months ended 31 December 2010 and the audited results of Putprop for the year ended 30 June 2010. The unaudited pro forma financial effects, which are the responsibility of the directors, are provided for illustrative purposes only and, because of their pro forma nature may not fairly present Putprop`s financial position, changes in equity, results of operations or cash flow. Before the After the Percentage Acquisition Acquisitio change (%)
n Basic earnings per share (cents) 48.4 49.2 1.7 Headline earnings per share (cents) 38.7 39.5 2.1 Net asset value per share (cents) 848.5 848.4 - Tangible net asset value per share 848.5 848.4 - (cents) Weighted average number of shares in 28 792 961 28 792 961 - issue Notes: 1 The amounts in the "Before the Acquisition" column have been extracted from the unaudited financial results of Putprop for the six months ended 31 December 2010. 2 The amounts in the "After the Acquisition" column reflect the financial effects of the Acquisition on Putprop. 3 The effects on earnings per share and headline earnings per share are calculated based on the assumption that the Acquisition was effected on 1 July 2010. 4 The effects on net asset value per share and tangible net asset value per share are calculated based on the assumption that the Acquisition was effected on 31 December 2010. 4 CLASSIFICATION OF THE ACQUISITION The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the JSE Limited. 20 June 2011 Sponsor Merchantec Capital Date: 20/06/2011 13:43:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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