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VKE - Vukile Property Fund Limited - Reduction of vendor placement size
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE share code: VKE ISIN: ZAE00056370
NSX share code: VKN
("Vukile" or "the company")
REDUCTION OF VENDOR PLACEMENT SIZE
Holders of Vukile linked units("linked unitholders")are referred to the
circular issued by Vukile on 31 January 2012 ("circular"), the general
meeting results announcement released on SENS on 29 February 2012 and the
fulfilment of conditions precedent and early distribution announcement
released on SENS on 9 March 2012, all relating to the acquisition by Vukile
of twenty properties from Sanlam Life Insurance Limited (the
"acquisition")for R1.5 billion and the issue and allotment of Vukile linked
units as part consideration for the acquisition in terms of a R956 million
vendor placement(the "vendor placement")(collectively "the Transaction").
The anticipated vendor placement will reduce from the initial indication of
R956 million to approximately R864.9 million for two reasons. Firstly,
Vukile has managed to bring the effective date of the Transaction forward,
which is now anticipated to be towards the latter part of April 2012. In
terms of the formula set out in the circular, to the extent that the
effective date is prior to 1 June 2012, the purchase price will reduce by a
factor of 0.017255% compounded daily (6.5% per annum). This has resulted in
a reduction in the purchase price of c.R11.6 million. Secondly, linked
unitholders are advised that Vukile has subsequently concluded the sale of
three properties from its existing portfolio that will result in it
receiving cash proceeds of R80 million within the next three months. Vukile
management have decided that it is preferable to utilize bridging funding of
R80 million pending receipt of the proceeds of the sale of the properties,
at which point the funding will be repaid, rather than issue new linked
units. Accordingly the vendor placement will decrease by R91.1 million, from
R956 million to R864.9 million.
The reduced vendor placement results in Vukile being able to conclude the
Transaction in a manner that is more favourable to linked unitholders. The
analysis has confirmed that it is beneficial for linked unitholders to
reduce the size of the vendor placement by using the temporary bridge debt
funding as it increases the distribution per unit.
The table below, which is the responsibility of the directors
and has not been reviewed and reported on by the reporting accountant in
terms of Section 8 of the JSE Listings Requirements, sets out the comparison
between the financial effects as set out in the circular and the new
financial effects resulting from the earlier effective date of the
Transaction and reduction in the size of the vendor placement:
As per As per Change Restated Change
circular circular (%) for 11.5 (%)
restated to Months
11.5 Months ending 31
ending 31 March 2013,
March 2013 reduced
and reduced purchase
purchase price and
price reduced
vendor
placement
Distribution 1.09 1.27 1.31 3.1
per New linked 16.5
unit for 10
Months ending
31 March 2013
(Rands)
Earnings 71,303 81,578 77,082 (5.5)
available for
distribution
for 10 Months 14.4
ending 31 March
2013
(R`000)(Note 1)
Distribution 1.48 1.50 1.56 4.0
per New linked
unit for the 1.4
year ending 31
March 2014
(Rands)
Earnings 96,538 n/a 92,138 (4.6)
available for
distribution
for the year n/a
ending 31 March
2014 (R`000)
(Note 1)
New linked 65,180,678 64,392,195 (1.2) 58,940,443 (8.5)
units issued
(Note 3)
Net asset value 1,130 1,133 1,128 (0.4)
("NAV") per 0.3
linked unit
(Cents) (Note
2)
Tangible NAV 1,038 1,040 1,034 (0.6)
("TNAV") per 0.2
linked unit
(Cents) (Note
2)
Linked units in 416,195,896 415,407,413 (0.2) 409,955,661 (1.3)
issue for
calculating NAV
and TNAV (Note
3)
Notes:
1.Finance costs have been adjusted for an additional 2.5 month`s interest on
the bridging facility of R80 million and interest foregone on R80 million at
an estimated money market rate of 5.5% for the remaining period.
2.Based on the unaudited results of Vukile for the six months ended 30
September 2011. An additional bridging loan of R80 million is raised and
will be refinanced utilising the net proceeds from the sales of the
Glencairn, Truworth JHB and John Griffin properties on an assumed date of 1
July 2012.
3.An estimated 58.94 million linked units are issued, at a price of R14.67,
as originally disclosed in the circular, representing the 5-day VWAP to 14
November 2011 (being the date of the release of the SENS announcement
setting out the details of the Transaction) to partly fund the Transaction.
This represents a reduction of 6.24 million linked units as compared to the
number used in the financial effects in the circular. This arises due to a
c.R11.6 million reduction in the purchase price due to an earlier than
anticipated effective date and the fact that R80 million of the purchase
price is funded utilising a bridging loan.
Johannesburg
5 April 2012
Merchant bank and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Reporting accountants
Grant Thornton
Date: 05/04/2012 16:20:01 Supplied by www.sharenet.co.za
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