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Disposal Of Subsidiary Company And Change In Strategy
RBA Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/009701/06)
JSE Share Code: RBA ISIN: ZAE000104154
(“RBA” or “the company”)
DISPOSAL OF SUBSIDIARY COMPANY AND CHANGE IN STRATEGY
1. INTRODUCTION
Sunnyshore Investments (Pty) Ltd (“Sunnyshore”), a wholly owned subsidiary of RBA, owns a development of
148 sectional title units in Protea Glen Extension 11 (“the property”).
Shareholders are advised that RBA and Sunnyshore entered into a Sale of Shares Agreement on 1 March
2013, with Jika Properties (Pty) Ltd (“Jika”) (“the purchaser”), to sell all the issued shares of Sunnyshore,
subject to certain conditions precedent (“the disposal”).
The sale price will be finally determined on the effective date, but is expected to be approximately R7 million.
This will give rise to a cash inflow to RBA of approximately R47 297 per sectional title unit before certain costs,
such as breakage costs as indicated in 3.1 below. It is not expected that similar breakage costs will be incurred
on future transactions of this type.
2. RATIONALE FOR THE DISPOSAL
RBA wishes to inform shareholders of a change in its strategy pertaining to developing, holding and growing
a sectional title rental portfolio as part of its business strategy. Although the Company will still consider
investment in rental property units in future as appropriate opportunities arise, it has decided to approach
the rental market differently at this time by focusing on the development and sale of rental developments to
market participants focused on acquiring and managing large portfolios of rental stock.
RBA currently has identified opportunities for the development of approximately 1 800 rental units for the
affordable rental and social housing market over the next 4 years. The Board is of the view that this strategy
will benefit RBA by making a significant contribution to future earnings and by deleveraging the Balance
Sheet over time.
The proceeds from the disposal will provide a cash flow injection and will be utilised to settle certain
liabilities and meet ongoing operational costs.
3. TERMS AND CONDITIONS OF THE DISPOSAL
The disposal is subject to the fulfilment or waiver by no later than 1 April 2013 of inter alia the following
conditions:
3.1 RBA obtaining the consent of the existing secured lender to transfer the shares and claims to the
purchaser and to cancel the existing mortgage bond over the property. The lender has already
provided a letter of comfort to the effect that it will grant such consent subject to payment of a
breakage fee of approximately R1.1 million; and
3.2 RBA completing the construction of the remaining 72 apartments and a sectional title register being
opened in respect of the property.
4. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL
The unaudited pro forma financial effects set out below are provided for illustrative purposes only to provide
information about how the disposal may have impacted on RBA’s results and financial position. The pro
forma financial effects have been prepared in accordance with International Financial Reporting Standards.
Due to the nature of the unaudited pro forma financial information, it may not give a fair presentation of the
company’s results and financial position after the disposal. The unaudited pro forma financial effects are
based on the unaudited financial information of RBA for the 6 month period ended 30 June 2012. The
directors of RBA are responsible for the preparation of the unaudited pro forma financial effects.
Before the Pro forma After the
disposal disposal unaudited
unaudited 30 June 2012
30 June 2012 Change
Earnings per share (cents) 0.13 0.66 407.69%
Headline earnings per share (cents) 0.44 0.44 -
Net asset value per share (cents) 16.21 16.66 2.77%
Net tangible asset value per share (cents) 14.44 14.89 3.16%
Weighted average shares in issue 369,360,312 369,360,312
Number of shares in issue at period end 429,976,189 429,976,189
Notes:
(1) For the purpose of calculating the earnings and headline earnings per share, it is assumed that the disposal
was implemented on 1 January 2012 and for the purpose of calculating the net asset value and the net
tangible asset value per share, it is assumed that the disposal was implemented on 30 June 2012.
(2) The "Before the disposal" column has been extracted without adjustment, from the unaudited interim results
of RBA for the period ended 30 June 2012.
(3) The "After the disposal" earnings per share includes a net profit after taxation on the disposal of R 1.96
million. The profit of R 1.96 million differs from the cash inflow referred to in paragraph 1 of this
announcement due to the fact that an after tax net unrealised revaluation gain of R 3.72 million was
recognised in the financial year ending 31 December 2011 and the cash inflow does not take account of any
tax consequences. The profit of R 1.96 million has been deducted for the calculation of headline earnings per
share.
(4) The "After the disposal" net asset value and net tangible asset value per share have been adjusted to
exclude the value of the property disposed of.
5. CATEGORISATION OF THE DISPOSAL
Based on an expected sale price of R7 million, the disposal is categorised, in terms of the JSE Limited’s
Listings Requirements, as a Category 2 transaction.
1 March 2013
Johannesburg
Designated Adviser
Exchange Sponsors
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