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RDF - Redefine Properties Limited - Fairness opinion and financial effects in respect of Arrow Creek and cautionary announcement Redefine Properties Limited (Registration No. 1999/018591/06) Share Code: RDF ISIN Code: ZAE000143178 ("Redefine" or "the company") FAIRNESS OPINION AND FINANCIAL EFFECTS IN RESPECT OF ARROW CREEK AND CAUTIONARY ANNOUNCEMENT INTRODUCTION Linked unitholders are referred to the announcement released on SENS on 9 September 2011 regarding the disposal to Arrow Creek Investments 227 (Proprietary) Limited ("Arrow Creek") of a portfolio of wholly-owned properties ("the property portfolio"), Redefine`s interest in a number of joint ventures, the Upper East Side Hotel and the shares in and claims against UES Hotel (Proprietary) Limited (the manager of the Upper East Side Hotel) (collectively, "the transaction"). This announcement is in respect of the fairness opinion and the financial effects regarding the transaction. SMALL RELATED PARTY TRANSACTION AND FAIRNESS OPINION As Michael Naftali Flax, a non-executive director of Redefine, is a 42.5% shareholder in Arrow Creek, the transaction constitutes a "small related party transaction" in terms of JSE Listings Requirements. A small related party transaction is not subject to linked unitholder approval, provided that an independent expert has confirmed that the terms of the transaction are fair as far as linked unitholders are concerned. Grant Thornton Advisory Services (Proprietary) Limited ("Grant Thornton"), who were appointed as an independent expert by Redefine, have concluded that the terms of the transaction are fair to Redefine linked unitholders. A copy of Grant Thornton`s report will be available for inspection at the offices of the company; Redefine Place, 2 Arnold Road, Rosebank, 2196 for a period of 28 days from the date of this announcement. FINANCIAL EFFECTS The unaudited pro forma financial effects of the transaction are not significant and are accordingly not presented. VARIATION OF ARRANGEMENTS IN RESPECT OF VENDOR LOAN As advised in the SENS announcement dated 9 September 2011, R100 million of the purchase consideration will remain outstanding as a loan by Redefine to Arrow Creek ("the vendor loan"). The conditions relating to the vendor loan have been varied as follows: - second covering bonds in favour of Redefine over the property portfolio have been replaced with a first covering bond over the Upper East Side Hotel in an amount of R100 million; - the cession of all rental income and lease agreements in respect of the Upper East Side Hotel; - the cession of rental income and lease agreements in respect of any property within the property portfolio provided that such cession will be subordinate to any rental cessions provided by Arrow Creek to any financial institution holding a first covering bond over such property; - the cession of all insurance policies in respect of the Upper East Side Hotel; - in the event of a default of any payment due to Redefine which is not remedied by Arrow Creek within 15 business days, Redefine can in its sole discretion, elect to: - purchase any property in the property portfolio at the value of the secured first covering bond; - demand immediate payment of the outstanding balance of the vendor loan, together with accrued but unpaid interest; - exercise all of its rights in terms of any security held; and - in the event of a change of control and/or a change of more than 25% in the shareholding of Arrow Creek, any subsidiary or associate and/or in the event that any of these parties list on the JSE, the outstanding balance of the vendor loan, together with any accrued but unpaid interest shall become immediately due and payable. CONDITIONS PRECEDENT Other than in respect of obtaining a fairness opinion from an independent expert, the transaction remains subject to the conditions precedent set out in the announcement released on SENS on 9 September 2011. CAUTIONARY Caution is no longer required to be exercised by Redefine linked unitholders in respect of this transaction when dealing in their linked units. However, linked unitholders are reminded of the cautionary announcements, the last of which was released on 14 September 2011, regarding the proposed acquisition of a portfolio of properties from various entities within the Zenprop Property Holdings Limited group and are advised to continue to exercise caution when dealing in their linked units until such time as a further announcement is released in this regard. 20 September 2011 Corporate advisor and sponsor Java Capital Independent expert Grant Thornton Advisory Services (Proprietary) Limited Date: 20/09/2011 10:58:01 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.
