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Press Release - Vukile Secures Major Empowerment Agreement
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
ISIN: ZAE000056370
JSE Share code: VKE NSX Share code: VKN
("Vukile" or the “company”)
PRESS RELEASE - VUKILE SECURES MAJOR EMPOWERMENT AGREEMENT
Johannesburg, 12 March 2013 – Vukile Property Fund has concluded an agreement with Encha
Properties (Encha) in one of the most significant Black Economic Empowerment (BEE) initiatives in
the listed property sector to date.
In terms of the agreement, Vukile will acquire a portfolio of five investment-grade, predominantly
national government-tenanted properties from Encha for an approximate R1.4 billion. The purchase
price will be discharged through a cash payment of approximately R800 million which will be used by
Encha to repay bank debt and amounts due to other third parties. The remaining R600 million will be
funded by issuing Vukile units to Encha for an initial amount of R470 million and is expected to
increase by a further R130 million in December 2013 when certain lease extensions are concluded.
Post the transaction, Encha will own an ungeared approximate R600 million stake in Vukile
representing a holding of around 7.5% in Vukile’s enlarged unit capital. For purposes of the Property
Sector Charter, this will represent an approximate 25% holding in Vukile, after adjusting for mandated
investments.
The properties in the portfolio comprise Navarre Wachthuis, the Koedoe Arcade and De Bruyn Park
in Pretoria as well as the Pretoria Momentum Building and the Bloemfontein Fedsure Building. The
acquisition is expected to become effective in July this year, once a number of conditions precedent
have been fulfilled, most specifically due diligence and Competition Authority approval.
A sub-portfolio will be established within Vukile to house the new properties as well as any other
government-tenanted properties that Vukile may own or acquire. Encha will be appointed as the
property and asset manager of this new sub-portfolio.
In addition, Encha CEO and current president of South African Property Owners Association
(SAPOA) Sedise Moseneke will be appointed as an executive director of Vukile. He will oversee the
government-tenanted portfolio and will work together with CEO Laurence Rapp in seeking to grow the
fund in line with Vukile’s stated strategy of building a large diversified property fund that’s overweight
in the retail sector. He will also have executive responsibility for driving Vukile’s overall
transformation strategy.
A special purpose vehicle has been created within Encha to assist Encha in acquiring more Vukile
units and to ensure that Vukile’s empowerment credentials are not diluted through future rights offers
or issues of shares. The special purpose vehicle is designed to ensure the long-term alignment of
interests between the two companies and the broader Vukile unitholder base. Other such measures
include an undertaking by Encha to hold all its Vukile units for at least eight years; to grant Vukile the
right of first refusal to any other Encha properties and to offer Vukile, in the first instance, all property-
related corporate opportunities in South Africa to exploit.
Rapp said the company was fully committed to the successful transformation of the South African
listed property sector. “We believe this deal has tremendous benefits for Vukile in that it allows us to
implement a sustainable transformation transaction that is done in a commercially viable manner that
is not only earnings enhancing but also serves to create long-term alignment across our various
stakeholders.”
“We are delighted to be partnering with Encha who has significant experience and a solid track record
in managing a successful government-tenanted portfolio. I welcome Sedise to our management team
and look forward to working with him as we continue to grow our fund,” he said.
Encha Properties is a leading Level 1 BEE rated black managed and black owned property company
which has been in operation since 1998. The Encha Properties services business manages in excess
of 30 properties with a combined value in excess of R2 billion. The acquisition properties have been
owned and managed by the Encha group for periods ranging between three and eight years.
For further information contact:
Laurence Rapp, CEO Vukile Property Fund Limited, on 083 266 3011 or
Sedise Moseneke, CEO Encha Properties, on +33 078 851 9914
JSE sponsor: Java Capital
NSX sponsor: IJG Securities (Pty) Ltd
Issued by du Plessis Associates on behalf of Vukile Property Fund Limited.
dPA contact Helen McKane Tel : +27 11 728 4701,Fax: +27 11 728 2547,
Mobile: 082 330 2034 or e-mail: vukile@dpapr.com
website: www.vukile.co.za
Date: 12/03/2013 03:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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