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Acquisition circular posted, abridged revised listing particulars, cautionary withdrawn, notice of AGM
Fairvest Property Holdings Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1998/005011/06
Linked unit code: FVT
ISIN Code: ZAE000034658
(“Fairvest” or “the Company”)
UPDATE REGARDING ACQUISITIONS, INCLUDING POSTING OF CIRCULAR AND
NOTICE OF GENERAL MEETING, PRO FORMA AND FORECAST FINANCIAL
INFORMATION, ABRIDGED REVISED LISTING PARTICULARS OF FAIRVEST AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT; NOTICE OF ANNUAL GENERAL
MEETING
1. INTRODUCTION
Linked Unitholders are referred to the announcements released by the Company on SENS
on 13 April 2012, 30 May 2012 and 17 July 2012 (“the Announcements”), which advised
Linked Unitholders that the Company had entered into the SA Corporate Real Estate
Acquisition, the Put Option Acquisition and the Isolenu Acquisition (collectively, the
“Acquisitions”).
As indicated in the Announcements, the Company intends to fund the purchase
considerations for the Acquisitions through a combination of debt financing and new equity
raised from new and/or existing Linked Unitholders in terms of a vendor consideration
placement (“Vendor Consideration Placement” or “the Placement”) and/or an issue of
Fairvest Linked Units for cash (“Specific Issue”).
In order to undertake the Placement and Specific Issue and in order to facilitate future capital
raisings, the Company proposes to make certain changes to its linked unit capital structure
(“Changes to Linked Unit Capital”). In order to provide for the new linked unit capital
structure and to bring the Company’s constitutional documents into harmony with the
Companies Act No 71 of 2008, as amended, and the Listings Requirements of the JSE
Limited (“JSE”), the Company proposes to adopt a new memorandum of incorporation
(“New Memorandum of Incorporation”). In addition, in order to provide for the changes to
the Company’s linked unit capital structure and consequential changes to the Company’s
existing debenture trust deed, the Company proposes to adopt a new debenture trust deed
(“New Debenture Trust Deed”).
2. POSTING OF CIRCULAR
Linked Unitholders are hereby advised that a circular, containing details of the Acquisitions,
Changes to the Linked Unit Capital, the New Memorandum of Incorporation and the New
Debenture Trust Deed and related aspects, will be posted to Fairvest Linked Unitholders
today, 5 October 2012 (“the Circular”). The Circular incorporates a notice convening a
general meeting of Fairvest Linked Unitholders for purposes of adopting resolutions in
respect of the approval the Acquisitions and the Changes to the Linked Unit Capital, the
approval of the New Memorandum of Incorporation and the New Debenture Trust Deed and
related aspects. The Circular incorporates revised listing particulars (“Revised Listing
Particulars”) in respect of the Company.
Linked Unitholders are advised to review the Circular and Revised Listing Particulars for
detailed information regarding the Acquisitions, the Changes to the Linked Unit Capital, the
New Memorandum of Incorporation, the New Debenture Trust Deed and related aspects.
The Circular, including the Revised Listing Particulars, will be available on the Company’s
website at www.fairvest.co.za.
3. NOTICE OF GENERAL MEETING, NOTICE OF ANNUAL GENERAL MEETING AND
NO CHANGE STATEMENT
Notice is hereby given that a general meeting of Fairvest Linked Unitholders will be held at
11h00 on Monday, 5 November 2012 at 1st Floor, East Wing, The Palms, 145 Sir Lowry
Road, Cape Town (“General Meeting”) for the purpose of considering and, if deemed fit,
passing with or without modification, the resolutions set out in the notice of the General
Meeting included in the Circular.
Notice is hereby given that the annual general meeting of Fairvest Linked Unitholders will be
held at 12h00 on Monday, 5 November 2012 at 1st Floor, East Wing, The Palms, 145 Sir
Lowry Road, Cape Town (“AGM”) for the purpose of considering and, if deemed fit, passing
with or without modification, the resolutions set out in the notice of AGM posted to Linked
Unitholders today simultaneously with the Circular and Notice of General Meeting. The
audited condensed consolidated results for the financial year ended 30 June 2012 are
annexed to the notice of AGM and contain no changes to the reviewed condensed
consolidated results for the year ended 30 June 2012 published by the Company on SENS
on 12 September 2012. The full audited financial results of the Company are included in the
Company’s 2012 annual report, which is available on the Company’s website at
www.fairvest.co.za.
4. IMPORTANT DATES AND TIMES
Linked Unitholders are referred to the table of important dates and times below. Capitalised
terms used below and elsewhere in this announcement and that are not otherwise defined,
bear the meanings ascribed to them in the Circular.
2012
Notice of AGM, together with Circular containing Revised
Listing Particulars, Notice of General Meeting and form of
proxy posted to Linked Unitholders on Friday, 5 October
Notices convening the General Meeting and AGM released
on SENS on Friday, 5 October
Notices convening the General Meeting and AGM published
in the South African press on Monday, 8 October
Last day to trade in order to be eligible to vote at the General
Meeting and AGM Friday, 19 October
Record date to be eligible to vote at the General Meeting and
AGM Friday, 26 October
Last day to lodge forms of proxies in respect of the General
Meeting by 11h00 on Thursday, 1 November
Last day to lodge forms of proxies in respect of the AGM by
12h00 on Thursday, 1 November
General Meeting of Linked Unitholders to be held at 11h00 on Monday, 5 November
AGM of Linked Unitholders to be held at 12h00 on Monday, 5 November
Results of the General Meeting and AGM released on SENS
on Monday, 5 November
Results of the Vendor Consideration Placement and/or the
Specific Issue (as applicable) released on SENS on Monday, 5 November
Results of the General Meeting published in the South African
press on Tuesday, 6 November
Results of the Vendor Consideration Placement and/or the
Specific Issue (as applicable) released in the South African
press on or about Tuesday, 6 November
Anticipated date for listing on the JSE of Fairvest Linked Units Monday, 12 November
issued in terms of the Vendor Consideration Placement
and/or the Specific Issue (as applicable) on (2)
Accounts at CSDP or Broker updated in respect of Monday, 12 November
Dematerialised Linked Unitholders participating in the Vendor
Consideration Placement and/or the Specific Issue (as
applicable) on
Posting of Linked Unit certificates (Certificated Linked Monday, 12 November
Unitholders only) to Fairvest Linked Unitholders participating
in the Vendor Consideration Placement and/or the Specific
Issue (as applicable) on or about
Registration of transfer of the Acquisition Portfolios Friday, 30 November
anticipated to occur on or about
Notes:
(1) The above dates and times are subject to amendment. Any such amendment will be released on SENS.
(2) The date for listing of any A Linked Units issued pursuant to the Vendor Consideration Placement and/or
the Specific Issue is subject to the registration of the New Memorandum of Incorporation with the
Companies and Intellectual Property Commission. The Changes to the Linked Unit Capital, including the
Share Capital Conversion, shall occur on registration with the Companies and Intellectual Property
Commission of the New Memorandum of Incorporation and relevant resolutions adopted by Linked
Unitholders at the General Meeting.
5. PRO FORMA FINANCIAL EFFECTS
The unaudited consolidated pro forma financial effects of the Acquisitions and the Vendor
Consideration Placement, as set out below, are the responsibility of the Directors. The
unaudited consolidated pro forma financial effects are presented in a manner consistent with
the basis on which the historical financial information has been prepared and in terms of the
Company’s accounting policies. The unaudited pro forma financial effects have been
presented for illustrative purposes only and, because of their nature, may not give a fair
reflection of the Company’s financial position post the adjustments set out in Annexure 1 of
the Circular, including the implementation of the Acquisitions and the Vendor Consideration
Placement.
The table below sets out the unaudited pro forma financial effects of the adjustments on the
Company, based on the reviewed annual financial results for the financial year ended 30
June 2012 and on the assumption that, for calculating the net asset value per Linked Unit
and net tangible asset value per Linked Unit, the adjustments were effected on 30 June
2012.
Whereas the pro forma financial effects of the Specific Issue are identical to the pro forma
financial effects of the Vendor Consideration Placement, the pro forma financial effects set
out below only refer to the Vendor Consideration Placement, but should be read as including
the pro forma financial effects of the Specific Issue, to the extent that same may be
applicable.
Reviewed Pro forma Chang Pro forma Change
results results after e (%) results after the (%)
before the the Placement, Placement,
adjustments Disposal, Debt Disposal, Debt
Funding and Funding and the
the Acquisitions
Acquisitions (including the
(excluding the Put Option
Put Option Acquisition)
Acquisition) (4)
Net asset value per A
Linked Unit (cents) - 486 - 486 -
Net asset value per
Ordinary Linked Unit
(cents) 168 156 (7.1%) 156 -
Net tangible asset
value per A Linked
Unit (cents) - 486 - 486 -
Net tangible asset
value per Ordinary
Linked Unit (cents) 173 161 (6.9%) 161 -
Number of A Linked
Units in issue (‘000) - 41 111 - 41 111 -
Number of Ordinary
Linked Units in issue
(‘000) 85 722 165 722 93.3% 165 722 -
Notes and assumptions:
(1) The table set out above has been extracted from the reviewed statement of financial position of Fairvest at
30 June 2012.
(2) It is assumed that Fairvest will raise R300 million in terms of the Placement and/or Specific Issue by issuing
80 million Ordinary Linked Units at R1.25 per Ordinary Linked Unit and 41.11 million A Linked Units at
R4.86 per A Linked Unit. Net proceeds are R291.8 million after deducting capital raising costs of
R8.2 million.
(3) Both of the pro forma results columns:
3.1 reflect the disposal of Jozen Place to Capital Property Fund for R6.5 million, the transfer of which
was registered in the Deeds Office on 25 July 2012, and raising of debt facilities of R98.9 million
resulting in a cash inflow of R105.4 million. The assumed facility is secured from Nedbank as set out
in paragraph 10 of the Circular, and incurs interest at the prime rate of interest less 0.5%. Debt
raising costs of R1.0 million are funded using the debt facility resulting in a gross increase in interest-
bearing borrowings of R99.9 million.
3.2 reflect the SA Corporate Real Estate Acquisition for R330.8 million (comprising a combined
acquisition cost of R326.0 million and capitalised acquisition costs of R4.9 million). The properties
are revalued to R362.8 million resulting in an upwards revaluation adjustment of R26.0 million after
deducting deferred tax of R6.0 million. The acquisition consideration and acquisition costs are settled
from the proceeds of the Placement and/or Specific Issue and Debt Funding.
3.3 reflect the Isolenu Acquisition for R68.4 million (comprising a combined acquisition cost of
R67.4 million and capitalised acquisition costs of R1.0 million). The properties are revalued to
R65.2 million resulting in a downwards revaluation adjustment of R2.6 million after deducting
deferred tax of R0.6 million. The acquisition consideration and acquisition costs are settled from the
proceeds of the Placement and/or Specific Issue and Debt Funding.
(4) Includes the Put Option Acquisition for R36.1 million (comprising a Put Option Consideration of
R35.6 million and capitalised acquisition costs of R0.5 million). The Put Option Consideration is based on
the projected net operating income of the Put Option Properties for the 12 months commencing 1 April
2013 (the assumed date that the Put Option is exercised by SA Corporate Real Estate) capitalised at the
applicable rate (10.0% for the Middleburg Property and 11.5% for the Gingindlovu Property). The Put
Option Consideration of R35.6 million comprises R27.9 million for the Middleburg Property and R7.7 million
for the Gingindlovu Property). The valuations of the Put Option Properties acquired are assumed to equate
to their respective purchase considerations (inclusive of capitalised acquisition costs). The acquisition
consideration and acquisition costs are assumed funded by a drawdown from the Nedbank facility. Debt
raising costs of R0.4 million are funded using the debt facility resulting in a gross increase in interest-
bearing borrowings of R36.5 million.
(5) Total transaction expenses amount to R14.6 million comprising capital raising costs of R8.2 million and
acquisition costs of R6.4 million (allocated between the SA Corporate Real Estate Acquisition, Isolenu
Acquisition and Put Option Acquisition at R4.9 million, R1.0 million and R0.5 million respectively).
(6) The net asset value (“NAV”) and net tangible asset value (“NTAV”) per linked unit is based on the actual
number of Linked Unitholders in issue at 30 June 2012 and on the basis that the Placement, Disposal, Debt
Funding, SA Corporate Real Estate Acquisition, Isolenu Acquisition and the Put Option Acquisition were
effected on 30 June 2012.
(7) All adjustments except for total estimated transaction costs of R14.6 million are expected to have a
continuing effect.
6. FORECAST FINANCIAL INFORMATION
Set out below are the forecast statements of comprehensive income (“Forecasts”) of:
- the SA Corporate Real Estate Property Portfolio on a stand-alone basis for the 7 months ending 30 June 2013
and year ending 30 June 2014;
- the Isolenu Property Portfolio on a stand-alone basis for the 7 months ending 30 June 2013 and year ending
30 June 2014;
- the Put Option Properties on a stand-alone basis for the year ending 30 June 2014; and
- the existing Fairvest portfolio and the Acquisition Portfolios (“Combined Property
Portfolio”) on a combined basis for the years ending 30 June 2013 and 30 June
2014 (“Forecast Periods”).
The Forecasts have been prepared on the assumption that the SA Corporate Real Estate
Acquisition and Isolenu Acquisition will be implemented on 1 December 2012 and the Put
Option Acquisition will be implemented on 1 July 2013.
The Forecasts include forecast figures for the Forecast Periods. The Forecasts, including
the assumptions on which they are based and the financial information from which they are
prepared, are the responsibility of the Directors. The Forecasts have been prepared in
compliance with IFRS and in accordance with the Group’s accounting policies. A limited
review was conducted on the Forecasts by the independent reporting accountants, whose
report is contained in the Circular.
FORECAST OF THE SA CORPORATE REAL ESTATE PROPERTY PORTFOLIO
7 months ending Year ending
30 June 2013 30 June 2014
R R
Revenue 34 176 404 59 620 296
Net property income 22 728 299 37 984 949
Operating profit 19 512 547 34 052 621
Profit after debenture interest 13 461 447 415 469
Total comprehensive income attributable to Linked - -
Unitholders
Distributable earnings (Linked Units) 13 454 754 25 505 536
FORECAST OF THE ISOLENU PROPERTY PORTFOLIO
7 months ending Year ending
30 June 2013 30 June 2014
R R
Revenue 5 269 661 8 859 091
Net property income 4 869 402 8 116 780
Operating profit 4 381 569 7 532 103
Profit after debenture interest 938 600 56 880
Total comprehensive income attributable to Linked - -
Unitholders
Distributable earnings (Linked Units) 3 190 273 5 867 718
FORECAST OF THE PUT OPTION PROPERTIES
Year ending
30 June 2014
R
Revenue 9 287 668
Net property income 3 696 392
Operating profit 3 065 610
Profit after debenture interest (7 679)
Total comprehensive income attributable to Linked Unitholders -
Distributable earnings (Linked Units) 2 322 772
FORECAST OF THE COMBINED PORTFOLIO (INCLUDING THE SA CORPORATE
REAL ESTATE PROPERTY PORTFOLIO AND ISOLENU PROPERTY PORTFOLIO)
Year ending Year ending
30 June 2013 30 June 2014
R R
Revenue 59 948 907 96 724 888
Net property income 41 651 335 67 246 025
Operating profit 36 067 526 60 456 751
Profit after debenture interest 14 841 751 1 100 323
Total comprehensive income attributable to Linked - (0)
Unitholders
Distributable earnings (Linked Units) 25 242 321 44 440 838
FORECAST OF THE COMBINED PORTFOLIO (INCLUDING THE SA CORPORATE
REAL ESTATE PROPERTY PORTFOLIO, ISOLENU PROPERTY PORTFOLIO AND PUT
OPTION PROPERTIES)
Year ending Year ending
30 June 2013 30 June 2014
R R
Rental income 54 944 417 101 489 382
Straight-line rental accrual 5 004 490 4 528 225
Revenue 59 948 907 106 017 607
Property expenses (18 297 572) (35 070 140)
Net property income 41 651 335 70 947 467
Administrative expenses (3 480 721) (3 759 179)
Asset management fee (2 126 207) (3 129 836)
Operating profit 36 044 408 64 058 452
Fair value adjustment to investment properties 28 758 976 -
Fair value adjustment to debentures (18 467 965) (2 829 402)
Finance cost (6 814 888) (15 610 539)
Investment revenue 819 644 472 194
Profit before debenture interest 40 340 175 46 090 705
Debenture interest (25 498 423) (44 990 382)
Profit after debenture interest 14 841 751 1 100 323
Capital raising expenses (8 203 995) -
Profit before taxation 6 637 756 1 100 323
Taxation (6 637 756) (1 100 323)
Total comprehensive income attributable to Linked - -
Unitholders
Reconciliation between earnings headline earnings and
distributable earnings
Profit for the year - -
Adjusted for:
Debenture interest 25 498 423 44 990 382
Capital raising expenses 8 203 995 -
Earnings (Linked Units) 33 702 419 44 990 382
Adjusted for:
Fair value adjustment to investment properties (net of (23 395 427) -
taxation)
Fair value adjustment to debentures 18 467 965 2 829 402
Headline earnings (Linked Units) 28 774 956 47 819 784
Adjusted for:
Straight-line rental accrual (net of taxation) (3 603 233) (3 260 322)
Amortisation of debt raising fees 326 700 430 920
Distributable earnings (Linked Units) 25 498 423 44 990 382
Actual number of A Linked Units in issue 41 111 111 41 111 111
Actual number of Ordinary Linked Units in issue 165 721 986 165 721 986
Weighted average number of A Linked Units in issue 23 981 481 41 111 111
Weighted average number of Ordinary Linked Units in 132 388 653 165 721 986
issue
Distribution per A Linked Unit (cents) 26.32 46.13
Distribution per Ordinary Linked Unit (cents) 10.44 15.71
Earnings per A Linked Unit (cents) 26.32 46.13
Earnings per Ordinary Linked Unit (cents) 10.44 15.71
Headline earnings per A Linked Unit (cents) 31.57 46.13
Headline earnings per Ordinary Linked Unit (cents) 15.69 15.71
Notes and assumptions:
The Forecasts incorporate the following material assumptions in respect of revenue and expenses that can be
influenced by the Directors:
- Fairvest management’s Forecasts for the years ending 30 June 2013 and 30 June 2014 are based on analysis of
historical information and information provided by the Property Manager and Independent Valuers;
- Fairvest will not acquire or dispose of any properties during the Forecast Periods other than the Acquisitions and
the disposal of Jozen Place as set out in paragraph 11.1.2 of the Revised Listing Particulars;
- contracted revenue is based on existing lease agreements including stipulated increases, all of which are valid;
- uncontracted revenue in respect of:
o the SA Corporate Real Estate Property Portfolio:
- comprises 11.2% of rental income from basic, parking, marketing and operating cost recoveries of
the R25.14 million gross revenue for the 7 months ending 30 June 2013;
- comprises 22.6% of rental income from basic, parking, marketing and operating cost recoveries of
the R45.66 million gross revenue for the year ending 30 June 2014;
o the Isolenu Property Portfolio:
- comprises 0% a of rental income from basic, parking, marketing and operating cost recoveries of
the R4.62 million gross revenue for the 7 months ending 30 June 2013;
- comprises 4.3% of rental income from basic, parking, marketing and operating cost recoveries of
the R8.31 million gross revenue for the year ending 30 June 2014;
o the Put Option Properties:
- comprises 76.8% of rental income from basic, parking, marketing and operating cost recoveries of
the R5.35 million gross revenue for the year ending 30 June 2014;
o the Combined Property Portfolio:
- comprises 17.7% of rental income from basic, parking, marketing and operating cost recoveries of
the R46.85 million gross revenue for the year ending 30 June 2013;
- comprises 29.8% of rental income from basic, parking, marketing and operating cost recoveries of
the R83.31 million gross revenue for the year ending 30 June 2014;
- current vacant space has been forecast on a property-by-property basis and has been assumed to remain vacant
unless it is deemed probable that such space will be let, in which case rental is forecast at prevailing market rates;
- leases expiring during the Forecast Periods have been forecast on a lease-by-lease basis, and have been assumed to
renew at current market rates unless the lessee has indicated its intention to terminate the lease;
- a vacancy profile (including possible bad debts) has been forecast for each property;
- property operating expenditure has been forecast on a line-by-line basis for each property based on management’s
review of historical expenditure, view on inflation and discussion with the Property Manager; and
- Fair value adjustments to investment properties have been provided for, as further set out below.
The Forecasts incorporate the following material assumptions in respect of revenue and expenses that cannot be
influenced by the Directors:
- the effective date of transfer of the SA Corporate Real Estate Property Portfolio and the Isolenu Property Portfolio
is 1 December 2012;
- the SA Corporate Real Estate Property Portfolio is acquired for R330.8 million (comprising a combined acquisition
cost of R326.0 million and capitalised acquisition costs of R4.9 million). The properties are revalued to
R362.8 million resulting in an upwards revaluation adjustment of R32.0 million;
- the Isolenu Property Portfolio is acquired for R68.4 million (comprising a combined acquisition cost of R67.4 million
and capitalised acquisition costs of R1.0 million). The properties are revalued to R65.2 million resulting in a
downwards revaluation adjustment of R3.2 million;
- the Put Option is exercised by SA Corporate Real Estate on 1 April 2013 and the effective date of transfer of the Put
Option Properties is 1 July 2013. The Put Option Consideration is based on the projected net operating income of
the Put Option Properties for the 12 months commencing 1 April 2013 capitalised at the applicable rate (10.0% for
the Middleburg Property and 11.5% for the Gingindlovu Property). The Put Option Consideration of R35.6 million
comprises R27.9 million for the Middleburg Property and R7.7 million for the Gingindlovu Property. The valuations
of the Put Option Properties acquired are assumed to equate to their respective purchase considerations (inclusive
of capitalised acquisition costs);
- interest-bearing borrowings of R135 million will be advanced to Fairvest on 1 December, and will incur interest at a
fixed rate of 8.5% p.a.;
- in terms of the Placement and/or the Specific Issue, 80 million Ordinary Linked Units are issued at R1.25 per
Ordinary Linked Unit and 41.11 million A Linked Units are issued at R4.86 per A Linked Unit raising gross proceeds
of R300 million;
- the combined gross proceeds of R300 million are utilised as follows:
o R8.2 million will be used settle to capital raising fees;
o R291.8 million will be used to partly finance the Acquisitions;
- the allocation of costs associated with the interest-bearing borrowings to the Acquisition Portfolios is based on
their pro rata acquisition costs;
- unutilised proceeds from the Placement will be used to partly settle interest-bearing borrowings; and
- there will be no unforeseen economic factors that will affect the lessees’ abilities to meet their commitments in
terms of existing lease agreements.
Material items of expenditure within the property expenses line item include in respect of:
- the SA Corporate Real Estate Property Portfolio
o R2.02 million in rates, R4.65 million in electricity and R0.72 million in property management fees in
respect of the 7 months ending 30 June 2013;
o R3.74 million in rates, R9.16 million in electricity and R1.32 million in property management fees in
respect of the year ending 30 June 2014;
- the Isolenu Property Portfolio
o R127 000 in rates, R88 000 in electricity and R48 000 in property management fees in respect of the
7 months ending 30 June 2013;
o R235 000 in rates, R173 000 in electricity and R86 000 in property management fees in respect of the
year ending 30 June 2014;
- the Put Option Properties
o R634 000 in rates, R3.43 million in electricity and R232 000 in property management fees in respect of
the year ending 30 June 2014;
- the Combined Property Portfolio
o R3.44 million in rates, R5.78 million in electricity and R1.13 million in property management fees in
respect of the year ending 30 June 2013; and
o R6.34 million in rates, R13.97 million in electricity and R2.17 million in property management fees in
respect of the year ending 30 June 2014.
Property expenses, administrative expenses and the asset management fee are expected to increase by more
than 15% from historical costs due to the increase in the size of the portfolio as a result of the Acquisitions and
the reletting and development of the Existing Portfolio.
7. ADDITIONAL INFORMATION
With reference to paragraph 5(d) of Fairvest’s announcement dated 17 July 2012, Linked
Unitholders are referred to the additional information contained in the Circular.
8. ABRIDGED REVISED LISTING PARTICULARS OF FAIRVEST
These abridged revised listing particulars are not an invitation to the public to subscribe for
securities, but are issued in compliance with the JSE Listings Requirements, for the purpose
of providing information to the public and Linked Unitholders with regard to the Company.
Capitalised terms used below and that are not otherwise defined, bear the meanings
ascribed to them in the Circular and Revised Listing Particulars.
Background
Fairvest is a property investment holding company and is listed in the “Real Estate and
Development” sector of the JSE. Fairvest was incorporated on 17 March 1998.
The Company’s investment strategy is to create a portfolio of significant critical mass
through acquisition of quality, high-yielding properties with a weighting in favour of non-
metropolitan areas and lower living standards measure (“LSM”) sectors. Accordingly,
investment opportunities are evaluated for acquisition on an ongoing basis.
Rationale for the Acquisitions
The Acquisitions are consistent with the Company’s growth strategy whereby the Company
will focus on acquiring retail assets with a weighting in favour of non-metropolitan areas and
lower LSM sectors.
Overview of Fairvest
The Revised Listing Particulars have been prepared on the assumption that the resolutions
proposed in the Notice of General Meeting will be passed at the General Meeting of Linked
Unitholders to be held at 11h00 on Monday, 5 November 2012, and that the Acquisitions, the
Vendor Consideration Placement and, if applicable, the Specific Issue detailed in the
Circular will be implemented.
After the implementation of the Acquisitions, the Company will have a Property Portfolio
consisting of 26 properties with a rentable retail and commercial area of 93 867 m2 and will
be valued at R584 856 000.
Fairvest’s objective is to build a focused retail property investment fund predominately
comprising of convenience, community and regional shopping centres as well as stand-
alone retail stores that service the lower LSM markets. Key to the composition of the fund is
to acquire properties with specific key national tenants dominant in the lower income sector
such as Shoprite, Spar, Pick n Pay, Boxer, Cambridge Food, Edcon, Pep, Cash Build and
Build It so as to ensure that the lease covenant of the fund is such that the national
component exceeds 60%. The full details of the Current Property Portfolio and the
Acquisition Portfolios appear in the Circular and the Revised Listing Particulars.
Share capital
Assuming the Acquisitions are approved by Linked Unitholders, the number of Linked Units
to be issued and the prices at which they will be issued will be determined at the time of the
Vendor Consideration Placement and the Specific Issue. It has been assumed for purposes
of the Circular and Revised Listing Particulars that 80 000 000 Ordinary Linked Units will be
issued at R1.25 per Ordinary Linked Unit and 41 111 111 new A Linked Units will be issued
at R4.86 per A Linked Unit in terms of the Vendor Consideration Placement (no A Linked
Units are currently authorised or in issue).
Dividend and distribution policy
The Directors do not intend to declare dividends but intend to rather make interest
distributions in respect of the Debenture portion of the Linked Units. The Company makes
semi-annual interest distributions in terms of the Debenture Trust Deed.
Fairvest Directors
The full names, ages, business addresses and capacities of the directors of the Company
are provided below:
Full name Age Capacity Business Address
Jacobus Francois du Toit 41 Chairman 1st Floor, East Wing, The Palms,
145 Sir Lowry Road, Woodstock,
8000
Barry Jacques Kriel 33 Chief financial officer As above
Darren Wilder 43 Chief executive officer As above
Adam Marcus 38 Chief operating officer As above
and alternate to Mr D
Wilder
Pieter Johannes van der 64 Lead independent non- 18 Vygeboord Village, Moredou
Merwe executive director Street
Durbanville, 7551
Martin Epstein 42 Independent non- 1st Floor, East Wing, The Palms,
executive director 145 Sir Lowry Road, Woodstock,
8000
Louis Wessel Andrag 39 Independent non- 24 Templeman Street, Aurora
executive director Durbanville, 7551
Change in designations of directors
In accordance with paragraphs 3.59(c) and 3.84(f) of the JSE Listings Requirements, Linked
Unitholders are hereby advised that, with immediate effect, the designation and capacity of:
- Mr BJ Kriel has changed from that of chief executive officer and financial director to
chief financial officer;
- Mr D Wilder has changed from that of executive director to chief executive officer;
- Mr A Marcus (alternate to Mr D Wilder) has changed also to include that of chief
operating officer; and
- Mr M Epstein has changed from non-executive director to independent non-executive
director.
Copies of the Revised Listing Statement
Copies of the Circular and Revised Listing Particulars will be available for inspection by
Linked Unitholders during normal business hours at the registered office of the Company, at
the offices of the Company’s transfer secretaries, Computershare Investor Services
(Proprietary) Limited, at Ground Floor, 70 Marshall Street, Johannesburg, 2001 and at the
offices of the Company’s sponsor, PSG Capital (Proprietary) Limited at 1st Floor, Ou
Kollege, 35 Kerk Street, Stellenbosch and 1st Floor, Building 8, Inanda Greens Business
Park, 54 Wierda Road West, Wierda Valley, Sandton, from 5 October 2012 until 5 November
2012 (both days inclusive). The Revised Listing Particulars, as incorporated in the Circular,
will be available on the website www.fairvest.co.za.
9. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Linked Unitholders are referred to the renewal of cautionary announcement, dated 29
August 2012, and are advised that as the pro forma financial effects and the forecast
financial information in relation to the Acquisitions have been disclosed in this
announcement, caution is no longer required to be exercised by Linked Unitholders when
dealing in the Company’s securities.
Cape Town
5 October 2012
PSG Capital (Proprietary) Limited: Sponsor and corporate adviser
Java Capital (Proprietary) Limited: Transaction adviser and bookrunner
BDO South Africa Incorporated: Independent Reporting Accountants and auditors
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