Wrap Text
Acquisition of new property
Vividend Income Fund Limited
Incorporated in the Republic of South Africa
(Registration Number 2010/003232/06)
JSE Alpha Code: VIF
ISIN: ZAE000150918
(“Vividend” or “the Company”)
ACQUISITION OF NEW PROPERTY
1. THE CONTINUITY SA ACQUISITION
Linked unitholders of the Company are hereby advised that the Company has entered into an agreement with Fortress
Income 3 (Proprietary) Limited (“Fortress”) to acquire the property and associated letting enterprise commonly known as
Continuity SA (“the Continuity SA Property”) situated at 308 Kent Avenue Ferndale Randburg (“the Continuity SA
Acquisition”).
The effective date of the Continuity SA Acquisition shall be the date of transfer of the Continuity SA Property into the name of
the Company, which, subject to fulfilment of the conditions precedent, is expected on or about 1 March 2013.
2. RATIONALE FOR THE ACQUISITION
The Continuity SA 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
Continuity SA Acquisition provides further quality, stability, longevity and growth potential to the Company’s earnings by
introducing a well established, single tenanted property with a low risk, medium-term lease into the Company’s lease profile.
3. PURCHASE CONSIDERATION
The purchase consideration applicable to the Continuity SA Acquisition is R56,500,000 (fifty six million five hundred thousand
rand), payable in cash against transfer of the Continuity SA Property 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. Details of the debt financing and equity raising will be announced in due course.
4. THE CONTINUITY SA PROPERTY
Details of the Continuity SA Property, as at the expected effective date, are as follows:
Property Address Geographical Sector Cost/Value GLA Cost per Average
Location GLA Gross
Rental per
m2 per
month
308 Kent Avenue Gauteng Commercial R56,500,000 5,503m2 R10,267 R84.95
Ferndale, Randburg
5. PROPERTY SPECIFIC INFORMATION
Details regarding the Continuity SA Acquisition, as at the expected effective date, are set out below:
Property Address Purchase Yield attributable Weighted Weighted Lease Vacancy %
to Linked Unitholders Average Lease Duration by GLA
Escalation
308 Kent Avenue 11.65% 7% 3.1 years 0%
Ferndale,
Randburg
Notes:
a) The Purchase Yield attributable to Linked Unitholders assumes a 30% Loan to Value (LTV) gearing limit with an
annual interest cost of 8.0%, which is the current indicative cost available to the Company from its bankers
b) Corporate tenants with low levels of default risk (‘A Type’ Tenants) constitute 100% of the GLA and 100% of the
Gross Rentals within the Continuity SA Property.
c) Save for costs associated with the transfer of the Continuity SA Property, which are estimated at R200,000, no
expenditure will be incurred by the Company in connection with the Continuity SA Acquisition
d) The cost of the Continuity SA property 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.
6. CONDITIONS PRECEDENT
The Continuity SA Acquisition is subject to the following material conditions precedent:
a) The satisfactory completion of a due diligence investigation, to be performed by the Company on the Continuity SA
Property and associated letting enterprise by 1 November 2012;
b) The Company obtaining the appropriate irrevocable funding commitments from existing and/or new debt funders, in
relation to the Continuity SA Acquisition, by 1 March 2013;
c) The Company obtaining the appropriate irrevocable undertakings to subscribe for additional equity from new and/or
existing Linked Unitholders by 1 March 2013; and
d) Linked Unitholders approving the issue of any Linked Units required to conclude the Continuity SA Acquisition, in terms of
the JSE Listing Requirements, by 1 March 2013.
The Company is entitled to waive the conditions precedent set out in paragraphs a), b) and c) above.
7. WARRANTIES
Fortress has provided warranties and indemnities to the Company that are standard to a transaction of this nature.
8. PRO FORMA FINANCIAL EFFECTS OF THE CONTINUITY SA ACQUISITION
The pro forma financial information in relation to the Continuity SA Acquisition is still in the process of being finalised and will
be published in due course.
9. FORECAST FINANCIAL INFORMATION OF THE CONTINUITY SA ACQUISITION
The forecast financial information in relation to the Continuity SA Acquisition is still in the process of being finalised and will
be published in due course.
10. CATEGORISATION
The Continuity SA Acquisition is a Category 2 acquisition in terms of the Listings Requirements of the JSE Limited
11. CAUTIONARY ANNOUNCEMENT
Linked Unitholders 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 Continuity SA Acquisition is
made.
22 October 2012
Cape Town
Sponsor
PSG Capital (Pty) Limited
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