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RES - Resilient Property Income Fund Limited - Acquisition of Boardwalk

Release Date: 30/08/2011 09:05
Code(s): RES
Wrap Text

RES - Resilient Property Income Fund Limited - Acquisition of Boardwalk Shopping Centre from Capital Property Fund Resilient Property Income Fund Limited (Incorporated in the Republic of South Africa) Registration number 2002/016851/06 Share code: RES ISIN: ZAE000043642 ("Resilient") ACQUISITION OF BOARDWALK SHOPPING CENTRE FROM CAPITAL PROPERTY FUND INTRODUCTION Linked unitholders are advised that Resilient has concluded an agreement with Capital Property Fund ("Capital") for the acquisition of Boardwalk Shopping Centre, situated in Krugerrand Road, Richards Bay (the "property") from Capital (the "transaction"). RATIONALE FOR THE TRANSACTION The acquisition of the property is in line with Resilient`s strategy of investing in dominant retail centres with strong anchor tenants and a high percentage of national retailers. TERMS OF THE TRANSACTION AND CONDITIONS PRECEDENT The effective date of the transaction is 1 December 2011 and the consideration of R1.028 billion payable by Resilient to Capital in respect of the property will be settled on the date of registration of transfer of ownership of the property by the issue of 16 211 238 Resilient linked units and the payment of R514 million in cash. The transaction is subject to: - approval by Capital`s unitholders; and - approval by the Competition authorities. THE PROPERTY Based on a valuation attributed to the property as at 1 December 2011 by Quadrant Properties (Proprietary) Limited, an independent professional associated valuer, the property is valued at R1.028 billion and consists of a total rentable area of 65 516 m2 at a weighted average rental of R115 per m2. CATEGORISATION OF THE TRANSACTION The transaction is a Category 2 transaction in terms of the JSE Listings Requirements and is accordingly not subject to approval by Resilient`s linked unitholders. FINANCIAL INFORMATION The unaudited pro forma financial effects have been prepared for illustrative purposes only to provide information on how the transaction may have impacted on the historical financial results of Resilient for the six months ended 30 June 2011. Due to their nature, the unaudited pro forma financial effects may not fairly present Resilient`s financial position, changes in equity, results of operations or cash flows after the transaction. The unaudited pro forma financial effects are the responsibility of the directors of Resilient and have not been reviewed or reported on by Resilient`s auditors. The unaudited pro forma financial effects of the transaction on Resilient`s basic earnings per share and per linked unit, diluted earnings per share and per linked unit, headline earnings per share and per linked unit and diluted headline earnings per share and per linked unit for the six months ended 30 June 2011 are set out below. The unaudited pro forma financial effects of the transaction on Resilient`s distribution per linked unit, net asset value and net tangible asset value per linked unit are not material and have not been disclosed. Unadjusted Pro forma % change before the after the
transaction transaction (cents) (cents) Basic earnings per share 73.45 65.08 (11.4%) Basic earnings per linked unit 182.81 172.60 (5.6%) Diluted earnings per share 70.40 62.54 (11.2%) Diluted earnings per linked unit 175.22 165.85 (5.3%) Headline earnings per share 85.24 80.04 (6.1%) Headline earnings per linked unit 194.60 187.56 (3.6%) Diluted headline earnings per share 81.70 76.92 (5.9%) Diluted headline earnings per linked 186.52 180.23 unit (3.4%) Weighted average number of 249 634 021 265 845 259 shares/linked units in issue Diluted weighted average number of 260 444 832 276 656 070 shares/linked units in issue Notes and assumptions: - The amounts set out in the "Unadjusted before the transaction" column have been extracted, without adjustment, from the condensed reviewed consolidated interim financial statements of Resilient for the six months ended 30 June 2011. - The transaction is assumed to have been implemented on 1 January 2011 for purposes of basic earnings per share and per linked unit, diluted earnings per share and per linked unit, headline earnings per share and per linked unit and diluted headline earnings per share and per linked unit. - Boardwalk Shopping Centre is assumed to have been acquired from Capital for a consideration of R1.040 billion settled as to R514 million in cash and the balance by the issue of 16 211 238 Resilient linked units at R32.42 per linked unit, being the 30-day VWAP prior to 1 January 2011 of a Resilient linked unit. - The fair value of the property portfolio at 30 June 2011 is assumed to have been R1.028 billion and accordingly the fair value adjustment for the six months ended 30 June 2011 is assumed to have been R10.3 million (net of deferred taxation). - Boardwalk Shopping Centre earned historic net rental income of approximately R38 million for the six months to 30 June 2011. - The historical property revenue and expenses were extracted from the underlying books and records of Boardwalk Shopping Centre which have not been reviewed or reported on by reporting accountants. However, the directors of Resilient are satisfied with the quality of the information. - The cash portion of R514 million of the purchase price is assumed to have been financed through interest-bearing debt, assumed to bear interest at 9.39% per annum, being the historical cost at which Resilient incurred interest for the six month period ended 30 June 2011. - Asset management fees received were assumed to reduce by 0.4% per annum in respect of the cash portion of R514 million of the purchase price. - Estimated transaction costs of approximately R0.5 million are assumed to have been incurred by Resilient and have been capitalised. - All adjustments have a continuing effect. 30 August 2011 Sponsor Java Capital Date: 30/08/2011 09:05:01 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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