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Revised terms, financial effects and withdrawal of cautionary in respect of 86 Main Street
ASCENSION PROPERTIES LIMITED
(formerly Grey Jade Trade and Invest 85 (Proprietary) Limited)
(Incorporated in the Republic of South Africa on 23 August 2006)
(Registration number 2006/026141/06)
A-linked units JSE code: “AIA” ISIN: ZAE000161881
B-linked units JSE code: “AIB” ISIN: ZAE000161899
(“Ascension” or “the company”)
REVISED TERMS, FINANCIAL EFFECTS AND WITHDRAWAL OF CAUTIONARY IN RESPECT OF 86 MAIN STREET
INTRODUCTION
Linked unitholders are referred to the announcement released on SENS on 12 October 2012 in which it was
announced that Ascension had concluded agreements with Bunker Hills Inv 530 (Proprietary) Limited to acquire the
office building known as 86 Main Street (“86 Main Street”) for a purchase price of R70 million (“the acquisition”).
The purpose of this announcement is to set out the revised terms and financial effects of the acquisition.
REVISED TERMS OF THE ACQUISITION
The purchase price of R70 million has been reduced to R66 million as a result of expected capital expenditure in the
amount of R4 million. The reduced purchase price and the expected capital expenditure will be settled by way of a
cash payment. The company will fund R45 million of the cash payment with appropriate debt funding by way of a
R45 million five year interest only facility from Nedbank Limited at a blended interest rate of 7.90% (50% fixed and
50% floating) and the balance of the cash payment and capital expenditure will be settled from existing cash
resources.
All of the conditions precedent have been fulfilled saved for Ascension being satisfied that the vendor has lawfully
assigned to the Company its rights and obligations under the lease agreements in respect of the property.
FORECAST FINANCIAL INFORMATION OF THE ACQUISITION
Set out below are the forecast revenue, operating profit, net profit after taxation and distributable earnings of 86 Main
Street (“the 86 Main Street forecasts”) for the 6 months ending 30 June 2013 and the year ending 30 June 2014. The
86 Main Street forecasts have been prepared on the assumption that the acquisition will be implemented on 1 January
2013.
The 86 Main Street forecasts, including the assumptions on which they are based and the financial information from
which they are prepared, are the responsibility of the directors of Ascension. The 86 Main Street forecasts have not
been reviewed or reported on by the independent reporting accountants.
The 86 Main Street forecasts presented in the table below have been prepared in accordance with the company’s
accounting policies and in compliance with IFRS.
6 months ending Year ending
30 June 2013 30 June 2014
R’000 R’000
Contractual rental and tenant recoveries 7 427 16 354
Straight-line of lease income adjustment 2 166 3 342
Rental revenue 9 593 19 696
Operating profit* 5 865 11 350
Net profit after taxation*^ 1 556 2 398
Distributable earnings 1 922 4 453
*Includes the effects of straight-lining rental income and asset management fees.
^ Includes the effects of finance costs and debenture interest.
The 86 Main Street forecasts incorporate, inter alia, the following material assumptions:
1. Contracted revenue is based on existing lease agreements.
2. Uncontracted revenue comprises 0.7% and 1.7% of gross rental revenue for the 6 months ending 30 June 2013
and the year ending 30 June 2014 respectively.
3. All existing lease agreements are valid.
4. R45 million of the purchase price (including acquisition costs and expected capital expenditure) is assumed to
be funded through interest-bearing borrowings which will be advanced by Nedbank Limited. These interest-
bearing borrowings are assumed to incur interest at an effective melded fixed and variable rate of 8.15% p.a.
5. The balance of the purchase price and capital expenditure will be funded through existing cash resources.
6. No fair value adjustment has been provided for in respect of the 6 months ending 30 June 2013 or the year
ending 30 June 2014.
7. In terms of the asset management agreement with Ascension Property Management Company (Proprietary)
Limited (“the manager”), Ascension will pay the manager:
a. a monthly fee equivalent to 1/12th of 0.25% of the aggregate of the market capitalisation and the
borrowings of Ascension till 30 June 2013; and
b. a monthly fee equivalent to 1/12th of 0.45% of the aggregate of the market capitalisation and the
borrowings of Ascension till 30 June 2014.
8. Ascension will pay the property manager, Broll Property Group (Proprietary) Limited, for all property
management services a monthly fee equivalent to 2.5% of gross monthly income collected (including VAT).
9. Debenture interest will be paid to A- and B-linked unitholders in accordance with the provisions of the
debenture trust deed.
UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The unaudited pro forma financial effects of the acquisition on Ascension’s net asset value and tangible net asset
value per A-linked unit and per B-linked unit, based on the unaudited pro forma consolidated statement of financial
position which is contained in the circular issued by Ascension on 1 November 2012, are not significant and have not
been presented.
WITHDRAWAL OF CAUTIONARY
Ascension linked unitholders are referred to the cautionary announcements dated 12 October 2012 and 23 November
2012 and are advised that following the release of the financial effects of the acquisition, caution is no longer required
to be exercised by linked unitholders when dealing in their linked units.
19 December 2012
Corporate advisor and sponsor
Java Capital
Date: 19/12/2012 05:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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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,
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