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VIF - Vividend Income Fund Limited - Voluntary trading update
Vividend Income Fund Limited
Previously known as Business Venture Investments No 1381 (Proprietary)
Limited
Incorporated in the Republic of South Africa
(Registration Number 2010/003232/06)
JSE Alpha Code: VIF
ISIN: ZAE000150918
("Vividend" or "the Company")
VOLUNTARY TRADING UPDATE, APPOINTMENT TO THE BOARD OF DIRECTORS,
ACQUISITION OF PROPERTY PORTFOLIO AND CAUTIONARY ANNOUNCEMENT
VOLUNTARY TRADING UPDATE
Linked unitholders are referred to the forecast financial information
published by Vividend in its prospectus on 1 November 2010, relating to its
listing on the JSE Limited ("JSE") on 18 November 2010, and to its interim
financial results, published on 8 April 2011, for the six months ended 28
February 2011.
It gives the board of Vividend pleasure to advise linked unitholders that a
reasonable degree of certainty exists that the distribution per linked unit
for the financial year ended 31 August 2011 will be within 5% of the
distribution per linked unit forecast in the prospectus for the financial
year ended 31 August 2011, barring any unforeseen circumstances or events
beyond the control of the directors. In this regard linked unit holders are
reminded that, based on the assumption that R500 million was raised in
terms of the private placement, the Company forecasted a distribution per
linked unit of 34 cents (an interim distribution of 9.96 cents per linked
unit has already been paid to linked unit holders in respect of the 2011
financial year).
The financial results on which this voluntary trading update has been based
have not been reviewed or reported on by the Company`s auditors.
APPOINTMENT TO THE BOARD OF DIRECTORS
In accordance with rule 3.59(a) of the Listings Requirements of the JSE
Limited, linked unitholders of the Company are hereby advised that Mr Brian
Bank ("Brian") has been appointed to the board of the Company, as an
independent non-executive director, with effect from 10 October 2011.
Brian is a Chartered Accountant who served as the managing partner of the
Johannesburg office of Mazars South Africa from 2001 to 2006. He is
currently an international partner and member of the National Board of
Partners of Mazars in South Africa. Brian works as an audit partner and has
a consultative role in all the listed and large audits conducted by the
Mazars Johannesburg office. The board welcomes his appointment as a non
executive director and looks forward to his valued contribution.
ACQUISITION OF A PROPERTY PORTFOLIO
1. THE VUSANI ACQUISITION
Linked unitholders of the Company are hereby advised that the Company
has entered into an agreement with Vusani Property Investments
(Proprietary) Limited to acquire a portfolio of retail and commercial
properties known as the `Vusani Portfolio" ("the Vusani Acquisition").
The effective date of the Vusani Acquisition shall be the date of
transfer of the Vusani Portfolio into the name of the Company, which,
subject to fulfilment of the conditions precedent, is expected on or
about 1 April 2012.
2. RATIONALE FOR THE ACQUISITION
The Vusani Acquisition is consistent with Vividend`s strategy of
identifying and acquiring properties that have free cash flow yields
that provide adequate value enhancement to linked unitholders from the
effective date of their acquisition. The Vusani Acquisition will allow
Vividend to maintain its timelines, objectives and projections for the
2012 financial period while at the same time enhancing the quality,
stability and longevity of the Company`s earnings.
3. PURCHASE CONSIDERATION
The purchase consideration for the Vusani Acquisition is R790 000 000
(seven hundred and ninety million rand), payable in cash against
transfer of the Vusani Portfolio into the name of the Company. The
Company will fund the purchase consideration through a combination of
debt financing and new equity raised from new and/or existing linked
unitholders.
4. THE VUSANI PORTFOLIO
Details of the ten (10) properties that constitute the Vusani
Portfolio are as follows:
Property Name Geograph Sector Cost/ GLA Cost Average
and Address ical Value per Gross
Location GLA Rental
/ m2
Westgate Mall Western Retail R211m 28,069m2 R7,517 R77.09
- Mitchells Cape
Plain Cape
Town
158 Jan Smuts Gauteng Commercial R176m 19,332m2 R9,104 R80.99
Rosebank
SARS, Durban Kwazulu- Commercial R175m 21,936m2 R7,978 R68.60
- 201 West Natal
Street Durban
Market Square Eastern Retail R72m 12,836m2 R5,609 R52.40
Centre Cape
Kingwilliamst
own
SARS Provence Gauteng Commercial R50m 5,866m2 R8,524 R68.59
House Witbank
Rosettenville Gauteng Retail R34m 14,141m2 R2,404 R45.61
Junction
Centre,
Rosettenville
Pick n Pay Free Retail R22m 3,703m2 R5,941 R51.80
Odendaalsrus State
Eersterus Gauteng Retail R18m 6,927m2 R2,599 R45.95
Plaza,
Eersterust
George Metro, Western Retail R16m 7,097m2 R2,254 R22.27
George Cape
Vusani House Gauteng Commercial R16m 4,744m2 R3,373 R37.72
Witbank (78%) /
Retail
(22%)
R790m 124,651m2 R6,338 R62.59
A sector analysis of the Vusani Portfolio is as follows:
Sector Cost GLA Cost / Gross Rental
GLA / m2
Commercial R417m 51,878m2 R8,038 R70.39
Retail R373m 72,773m2 R5,125 R57.02
Total R790m 124,651m2 R6,338 R62.59
Sector Purchase Average Average Vacancy % by
Yield Escalation Lease rentable
Duration area
Commercial 10.34% 6.9% 2.94 3.73%
Retail 10.97% 7.8% 2.29 4.29%
Total 10.64% 7.3% 2.56 4.06%
Notes:
1.1 National and Anchor tenants (`A Type` Tenants) constitute 68% of
the GLA and 67.3% of the Gross Rentals within the Vusani
Portfolio.
1.2 Save for costs associated with the transfer of the Vusani
Portfolio, which are estimated at R1.5million, no expenditure
will be incurred by the Company in connection with the Vusani
Acquisition.
1.3 The cost of each property within the Vusani Portfolio is
considered to be its fair market value, as determined by the
Directors of the Company. The directors of the Company are not
independent and are not registered as professional valuers or as
professional associate valuers in terms of the Property Valuers
Profession Act, No 47 of 2000.
5. CONDITIONS PRECEDENT
The Vusani Acquisition is subject the following conditions precedent:
a) The satisfactory completion of a due diligence investigation, to
be performed by the Company on each property and letting
enterprise within the Vusani Portfolio, by 18 November 2011;
b) The shareholders of Vusani Property Investments (Proprietary)
Limited passing the required resolution, in accordance with
Sections 112 and 115 of The Companies Act 71 of 2008 as amended,
by 18 December 2011;
c) The Company obtaining the appropriate irrevocable funding
commitments from existing and/or new debt funders, in relation to
the Vusani Portfolio, by 31 January 2012;
d) Competition Commission approval, in terms of the Competition Act
89 of 1998, by 31 January 2012;
e) The Company obtaining the appropriate irrevocable undertakings to
subscribe for additional equity from new and/or existing linked
unitholders by 28 February 2012; and
f) Linked unitholders approving the purchase of the Vusani
Portfolio, including the issue of any linked units required to
conclude the Vusani Acquisition, in terms of the JSE Listing
Requirements, by 28 February 2012.
The Company is entitled to waive the conditions precedent set out in
paragraphs a), c) and e) above.
6. WARRANTIES
Vusani Property Investments (Proprietary) Limited and its shareholders
have provided warranties and indemnities to the Company that are
standard to a transaction of this nature.
7. PRO FORMA FINANCIAL EFFECTS OF THE VUSANI ACQUISITION
The pro forma financial information in relation to the Vusani
Acquisition is still in the process of being finalised and will be
published in due course.
8. FORECAST FINANCIAL INFORMATION OF THE VUSANI ACQUISITION
The forecast financial information in relation to the Vusani
Acquisition is still in the process of being finalised and will be
published in due course.
9. CATEGORISATION
The Vusani Acquisition is a Category 1 acquisition in terms of the
listings requirements of the JSE requiring shareholder approval.
Accordingly, a circular detailing the terms of the acquisition and
convening a general meeting will be posted to shareholders in due
course.
10. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to exercise caution when dealing in the
Company`s securities until a full announcement regarding the pro forma
financial effects and the forecast financial information in relation
to the Vusani Acquisition is made.
10 October 2011
Cape Town
Sponsor
PSG Capital (Pty) Limited
Vividend Income Fund Limited
Date: 10/10/2011 16:00:01 Supplied by www.sharenet.co.za
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