Wrap Text
Results Of General Meeting And The Combined Claw Back And Rights Offer Finalisation Announcement
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”)
RESULTS OF GENERAL MEETING AND THE COMBINED CLAW BACK AND RIGHTS OFFER FINALISATION
ANNOUNCEMENT
1. RESULTS OF GENERAL MEETING
Linked Unitholders of Vividend are hereby advised that the requisite majority of Linked Unitholders
approved all of the ordinary and special resolutions tabled at the general meeting of Vividend held today,
being 23 April 2013.
The necessary special resolutions will be lodged with CIPC for registration in due course.
2. THE COMBINED CLAW-BACK AND RIGHTS OFFER FINALISATION ANNOUNCEMENT
Linked Unitholders are referred to the announcement published on SENS on Friday, 1 March 2013 (“the
Announcement”) whereby Linked Unitholders were advised that various agreements had been entered
into, which if successfully concluded would result in Vividend acquiring 90% of the property known as
Access Park Kenilworth (“the Access Park Property”) (“the Access Park Acquisition”).
Linked unitholders were further advised in the Announcement of Vividend’s intention to raise R539
million, by way of a renounceable combined claw back offer and rights offer (“the Combined Claw-back
and Rights Offer”) of 99 817 808 new Vividend Linked Units (“the Combined Claw-back and Rights Offer
Linked Units”) to qualifying Vividend Linked Unitholders recorded in the register at the close of business
on Friday, 10 May 2013 (“Record Date”). The Combined Claw-back and Rights Offer Linked Units will be
issued at a subscription price of 540 cents per Combined Claw-back and Rights Offer Linked Unit, in the
ratio of 52.24000 Combined Claw-back and Rights Offer Linked Units for every 100 Linked Units held at
the close of trade on the Record Date (“Entitlement”).
Vividend has received irrevocable commitments for the Combined Claw-back and Rights Offer from
Coronation Asset Management (Proprietary) Limited, Momentum Asset Management (Proprietary)
Limited and Stanlib Asset Management Limited (“the Joint Underwriters”) to underwrite and/or re-
subscribe for Linked Units for approximately 54.1% of the Combined Claw-back and Rights Offer. The
Combined Claw-back and Rights Offer ratio has been calculated exclusive of the 54 004 710 Linked Units
that will be issued to the Joint Underwriters on Friday, 26 April 2013.
Linked Unitholders are advised that the Combined Claw-back and Rights Offer is now unconditional and
can thus be implemented in accordance with the timetable set out below.
3. POSTING OF THE COMBINED CLAW-BACK AND RIGHTS OFFER CIRCULAR
Linked Unitholders are advised that a circular containing full details of the terms of the Combined Claw-
back and Rights Offer, incorporating revised listing particulars and a form of instruction in respect of a
letter of allocation will be posted, on or about Monday, 13 May 2013, to all Linked Unitholders recorded
in the register on the Record Date.
A copy of the Circular will also be available on Vividend’s website (www.vividend.co.za) from Friday, 3
May 2013.
4. SALIENT DATES AND TIMES
The salient dates and times relating to the Combined Claw-back and Rights Offer are set out below.
2013
Listing and issue of 54 004 710 Linked Units to the Joint
Underwriters Friday, 26 April
Last day to trade in Vividend Linked Units in order to qualify
to participate in the Combined Claw-back and Rights Offer
(cum Entitlement) Friday, 3 May
Listing of letters of allocation for the Combined Claw-back
and Rights Offer on the JSE under the JSE code VIFN and ISIN
ZAE000176855 at commencement of trading Monday, 6 May
Vividend Linked Units commence trading ex-Entitlement on
the JSE at commencement of trading Monday, 6 May
Record Date for participation in the Combined Claw-back and
Rights Offer at the close of trade Friday, 10 May
Circular and form of instruction, where applicable, posted to
Linked Unitholders Monday, 13 May
Combined Claw-back and Rights Offer opens at
commencement of trading Monday, 13 May
Dematerialised Linked Unitholders’ accounts at their CSDP or
broker automatically credited with their Entitlement Linked
Units Monday, 13 May
Certificated Linked Unitholders’ Entitlement Linked Units will
be credited to an account held with the transfer secretaries Monday, 13 May
Last day to trade in letters of allocation on the JSE Friday, 24 May
Last day for form of instruction to be lodged with the transfer
secretaries by certificated Linked Unitholders wishing to sell
all or part of their Entitlement Linked Units by 12h00 Friday, 24 May
Listing of the balance of 45 813 098 Linked Units commences Monday, 27 May
Trade in Combined Claw-back and Rights Offer Linked Units
commences Monday, 27 May
Combined Claw-back and Rights Offer closes – payments to
be made and form of instruction in respect of letters of
allocation lodged by certificated Linked Unitholders by 12h00
(see note 5) Friday, 31 May
Record date for letters of allocation Friday, 31 May
Dematerialised Linked Unitholders’ accounts updated with
Combined Claw-back and Rights Offer Linked Units to the
extent accepted and debited with the relevant costs by their
CSDP or broker (see note 5) Monday, 3 June
New Vividend Linked Unit certificates posted to certificated
Linked Unitholders Monday, 3 June
Results of the Combined Claw-back and Rights Offer
announcement released on SENS Monday, 3 June
Notes:
1) Dematerialised Linked Unitholders are required to notify their duly appointed CSDP or
broker of their acceptance or otherwise of the Combined Claw-back and Rights Offer in
the manner and time stipulated in the custody agreement governing the relationship
between such Linked Unitholder and their CSDP or broker.
2) All times indicated are South African times unless otherwise stated.
3) Linked Units may not be dematerialised or rematerialised between Monday, 6 May
2013 and Friday, 10 May 2013, both days inclusive.
4) The CSDP/broker accounts of dematerialised Linked Unitholders will be automatically
credited with new Vividend Linked Units to the extent to which they have accepted the
Combined Claw-back and Rights Offer. New Linked Unit certificates will be posted, by
registered post at the Linked Unitholders’ risk, to certificated Linked Unitholders to the
extent to which they have accepted the Combined Claw-back and Rights Offer.
5) CSDPs or brokers effect payment in respect of dematerialised Linked Unitholders on a
delivery versus payment method.
6) The Combined Claw-back and Rights Offer does not include the right for Linked
Unitholders to apply for excess Combined Claw-back and Rights Offer Linked Units.
5. FORECAST FINANCIAL INFORMATION
The profit forecasts for Vividend, including the Access Park Acquisition have been prepared for the 12
month period ending 31 August 2013 and the 12 month period ending 31 August 2014. The forecasts have
been prepared on the assumption that the effective date of the Access Park Acquisition is on or about
1 May 2013.
The profit 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 Vividend, provided that, in this
regard, the directors of Vividend and the reporting accountants have reviewed the reasonableness of
representations and information received from the vendors in respect of the Access Park Property.
A limited review was conducted by the independent reporting accountants on the forecast financial
information, whose report is contained in the Circular to Linked Unitholders.
The profit forecasts are:
• prepared in accordance with Vividend’s accounting policies and in compliance with IFRS;
and
• prepared in relation to the whole Vividend property portfolio, including the Access Park
Property as from the expected date of transfer of the Access Park Property into the
name of Vividend.
Set out below are the forecast statements of comprehensive income based on:
A) The Combined Claw-back and Rights Offer being partially subscribed for up to the level
of the irrevocable commitments received from the Joint Underwriters, being 54.1% of
the Combined Claw-back and Rights Offer; and
B) The Combined Claw-back and Rights Offer being fully subscribed for.
5.1. PARTIALLY (54.1%) SUBSCRIBED COMBINED CLAW-BACK AND RIGHTS OFFER
Forecast for the Forecast for the 12
12 months ending months ending 31
31 August 2013 August 2014
R’000 R’000
Revenue 222 144 271 955
Property expenses (47 507) (68 314)
Net Property Income 174 637 203 641
Other operating expenses (13 839) (16 078)
Operating Profit 160 797 187 563
Profit before debenture interest and taxation 104 987 126 466
Debenture interest (109 427) (126 466)
Total comprehensive income / (loss) (4 440) -
Basic and diluted earnings per linked unit (cents) 49.16 51.60
Headline earnings per linked unit 52.91 52.28
Distribution per linked unit (cents) 50.60 51.60
ASSUMPTIONS WITHIN THE CONTROL OF MANAGEMENT
• Vividend does not plan to dispose of any property within the property portfolio during the forecast
period.
• Gross rentals forecasted for the property portfolio consist of contracted and un-contracted revenue.
Un-contracted revenue from the property portfolio, in aggregate, accounts for 21% and 36% of
revenue for the 2013 and 2014 forecast periods respectively. Un-contracted revenue is calculated
with reference to the following 1) current contracted gross rentals 2) escalation profiles applicable to
historic and current gross rentals 3) vacancy guarantees provided 4) current market-related rentals 5)
current market-related escalation rates 6) location and size of un-contracted GLA 7) marketability of
un-contracted GLA.
• Lease agreements that are subject to contingent and/or turnover rentals are maintained at existing
levels.
• All existing lease agreements are valid and enforceable.
• Leases that expire during the forecast period are assumed to be renewed at current gross rentals
escalated at the time of expiry by the historic escalation rate applicable to either a) the expired lease
b) existing leases consistent in nature with the expired lease.
• Current vacant space has been assumed to remain vacant during the forecast period.
• Property expenses are determined with reference to a detailed review of the historical information.
No property expenses have been increased in the 2013 and 2014 forecast periods by more than 15%
over the historical financial period.
• Consumption based recoveries are consistent with the 1) historical information provided 2) valuer
income statements 3) approved forecasts and budgets 4) market-related information.
• A doubtful debt impairment provision, amounting to 1.0% of net property income before the
doubtful debt impairment provision, has been included in property expense for the duration of the
forecast period to account for probable doubtful debts. This provision is over and above the vacancy
profile maintained during the forecast period.
• No fair value adjustments have been made to the property portfolio, other than as a result of
straight-line lease income adjustments.
• The asset management fee applicable to the asset manager has been calculated on a market price
per Linked Unit of R5.40 throughout the forecast period.
• Distributions to Linked Unitholders are paid biannually on 28 February and 31 August.
ASSUMPTIONS OUT OF THE CONTROL OF MANAGEMENT
• The effective date of the Access Park Acquisition is 1 May 2013.
• The effective date of the Combined Claw-back and Rights Offer is 1 April 2013.
• 54 004 710, or 54.1% of the Combined Claw-back and Rights Offer Linked Units are issued as part of
the Combined Claw-back and Rights Offer.
• The fixed interest rate applicable to debt facilities is set at 7.8% for the duration of the forecast
period. Origination costs applicable to the deployment of debt facilities are included in the interest
cost over the forecast period.
• The inflation rate applicable to all expenditure carried forward into the 2013 and 2014 forecast
periods is 8%.
5.2. FULLY SUBSCRIBED COMBINED CLAW-BACK AND RIGHTS OFFER
Forecast for the Forecast for the 12
12 months ending months ending 31
31 August 2013 August 2014
R’000 R’000
Revenue 222 144 271 955
Property expenses (47 507) (68 314)
Net Property Income 174 637 203 641
Other operating expenses (13 931) (16 105)
Operating Profit 160 706 187 536
Profit before debenture interest and taxation 112 589 145 460
Debenture interest (117 029) (145 460)
Total comprehensive income/(loss) (4 440) -
Basic and diluted earnings per linked unit (cents) 48.39 50.00
Headline earnings per linked unit 51.83 50.58
Distribution per linked unit (cents) 49.50 50.00
ASSUMPTIONS WITHIN THE CONTROL OF MANAGEMENT
• Vividend does not plan to dispose of any property within the property portfolio during the forecast
period.
• Gross Rentals forecasted for the property portfolio consist of contracted and un-contracted revenue.
Un-contracted revenue from the property portfolio, in aggregate, accounts for 21% and 36% of
revenue for the 2013 and 2014 forecast periods respectively. Un-contracted revenue is calculated
with reference to the following 1) current contracted gross rentals 2) escalation profiles applicable to
historic and current gross rentals 3) vacancy guarantees provided 4) current market-related rentals 5)
current market-related escalation rates 6) location and size of un-contracted GLA 7) marketability of
un-contracted GLA.
• Lease agreements that are subject to contingent and/or turnover rentals are maintained at existing
levels.
• All existing lease agreements are valid and enforceable.
• Leases that expire during the forecast period are assumed to be renewed at current gross rentals
escalated at the time of expiry by the historic escalation rate applicable to either a) the expired lease
b) existing leases consistent in nature with the expired lease.
• Current vacant space has been assumed to remain vacant during the forecast period.
• Property expenses are determined with reference to a detailed review of the historical information.
No property expenses have been increased in the 2013 and 2014 forecast periods by more than 15%
over the historical financial period.
• Consumption based recoveries are consistent with the 1) historical information provided 2) valuer
income statements 3) approved forecasts and budgets 4) market-related information.
• A doubtful debt impairment provision, amounting to 1.0% of net property income before the
doubtful debt impairment provision, has been included in property expense for the duration of the
forecast period to account for probable doubtful debts. This provision is over and above the vacancy
profile maintained during the forecast period.
• No fair value adjustments have been made to the property portfolio, other than as a result of
straight-line lease income adjustments.
• The asset management fee applicable to the asset manager has been calculated on a market price
per Linked Unit of R5.40 throughout the forecast period.
• Distributions to Linked Unitholders are paid biannually on 28 February and 31 August.
ASSUMPTIONS OUT OF THE CONTROL OF MANAGEMENT
• The effective date of the Access Park Acquisition is 1 May 2013.
• The effective date of the Combined Claw-back and Rights Offer is 1 April 2013.
• 99 817 808 Combined Claw-back and Rights Offer Linked Units are issued as part of the Combined
Claw-back and Rights Offer.
• The fixed interest rate applicable to debt facilities is set at 7.8% for the duration of the forecast
period. Origination costs applicable to the deployment of debt facilities are included in the interest
cost over the forecast period.
• The inflation rate applicable to all expenditure carried forward into the 2013 and 2014 forecast
periods is 8%.
6. PRO FORMA STATEMENT OF FINANCIAL POSITION
The unaudited pro forma statements of financial position of Vividend subsequent to the Combined Claw-
back and Rights Offer and the Access Park Acquisition, as set out below, are the responsibility of the
directors of Vividend. The unaudited pro forma statements of financial position are presented in a manner
consistent with the basis on which the historical financial information has been prepared and in terms of
Vividend’s accounting policies. The unaudited pro forma statements of financial position have been
presented for illustrative purposes only and, because of their nature, may not give a fair reflection of
Vividend’s financial position subsequent to the Combined Claw-back and Rights Offer and the Access Park
Acquisition.
The table below sets out the unaudited pro forma statements of financial position, post the Combined
Claw-back and Rights Offer and including the Access Park Acquisition, on Vividend based on the unaudited
published financial results for the six months ended 28 February 2013 and on the assumption that for
calculating the net asset value per Linked Unit, tangible net asset value per Linked Unit and the net asset
value excluding deferred taxation liability per Linked Unit, the Combined Claw-back and Rights Offer and
the Access Park Acquisition were effected on 28 February 2013.
Results before Pro forma Change Pro forma results Change
the Access Park results (%) after the Access Park (%)
Acquisition and after the Acquisition and the
the Combined Access Combined Claw-back
Claw-back and Park and Rights Offer
Rights Offer Acquisition
Net asset value
per Linked Unit
(cents) 504 502 (0.4%) 513 2.2%
Net asset value
excluding
deferred taxation
liability per Linked
Unit and tangible
net asset value
per Linked Unit
(cents) 511 510 (0.2%) 518 1.6%
Number of Linked
Units in issue
(‘000) 191 075 191 075 0% 290 893 52%
Notes and assumptions:
1. The “Results before the Access Park Acquisition and the Combined Claw-back and Rights Offer” figures
are extracted from the unaudited results of the Group for the six months ended 28 February 2013.
2. The net asset value per Linked Unit, tangible net asset value per Linked Unit and net asset value per
Linked Unit, excluding deferred taxation liability figures are calculated based on the actual number of
Linked Units in issue at 28 February 2013 and on the basis that the Access Park Acquisition and
Combined Claw-back and Rights Offer are effected on 28 February 2013.
3. Transaction costs of R2 460 000 are assumed to be applicable to the Access Park Acquisition and
transaction costs of R7 375 000 are applicable to the Combined Claw-back and Rights Offer.
R5 395 000 of these costs, which relate to placement fees applicable to the Combined Claw-back and
Rights Offer, have been allocated to Debenture capital. The balance has been expensed through the
statement of comprehensive income.
4. In terms of the Access Park Acquisition, Vividend will acquire the Access Park Property for a purchase
consideration of R483.4 million, subject to any adjustment made in terms of the Access Park
Agreements. Should transfer of 90% of the Access Park Property into the name of Vividend take place
on 1 May 2013, as anticipated, the purchase consideration will be R473.7m.
5. In terms of IFRS, the Access Park Property, an investment property, is recorded at its market value on
the date of acquisition, with the difference between the market value and the purchase consideration,
as finally determined per the Access Park Agreements, being allocated to the statement of
comprehensive income.
6. Vividend will issue 99 817 808 linked units, or 100% of the Combined Claw-back and Rights Offer, at
540 cents per Linked Unit, subject to the 1.85% placement fee payable in terms of the Irrevocable
Commitments to the Joint Underwriters.
7. The put and call options applicable to the remaining 10% of the Access Park Property not owned by
Vividend post the Access Park Acquisition have been valued using the Black & Scholes Option
Valuation Model, which incorporates the following input variables: a) an underlying price of R48.4m b)
a strike price of R74.7m c) a dividend yield of 0% d) a risk free rate of 7.45% e) a volatility of 18.3% f)
an option period of 5 years g) an escalation rate, as applied to Net Property Income, of 7% and h) an
effective date of 1 May 2013. The put option has been accounted for as a ‘Other non-current financial
liability’ while the call option has been accounted for as a ‘Other non-current financial asset’ within
the statement of financial position.
8. All adjustments, except for transaction costs, are expected to have a continuing effect.
7. PRO FORMA STATEMENT OF COMPREHENSIVE INCOME
The unaudited pro forma statements of comprehensive income of Vividend subsequent to the Combined
Claw-back and Rights Offer, as set out below, are the responsibility of the directors of Vividend. The
unaudited pro forma statements of comprehensive income are presented in a manner consistent with the
basis on which the historical financial information has been prepared and in terms of Vividend’s
accounting policies. The unaudited pro forma statements of comprehensive income have been presented
for illustrative purposes only and, because of their nature, may not give a fair reflection of Vividend’s
financial performance subsequent to the Combined Claw-back and Rights Offer.
The table below sets out the unaudited pro forma statements of comprehensive income, post the
Combined Claw-back and Rights Offer, of Vividend based on the forecast financial information for the year
ended 31 August 2013, as disclosed below, and on the assumption that for calculating the earnings per
Linked Unit, headline earnings per Linked Unit and distribution per Linked Unit, the Combined Claw-back
and Rights Offer was effected on 1 September 2012.
7.1. FULLY SUBSCRIBED COMBINED CLAW-BACK AND RIGHTS OFFER
Pro forma Forecast Change (%)
financial forecast financial
information information
excluding the including the
Combined Claw- Combined Claw-
back and Rights back and Rights
Offer Offer
Earnings per Linked Unit (cents) 50.05 48.39 (3.3%)
Headline earnings per Linked Unit (cents) 54.25 51.83 (4.5%)
Distribution per Linked Unit (cents) 51.34 49.50 (3.6%)
Weighted number of Linked Units (‘000) 191 075 232 666 21.8%
Notes and assumptions:
1. The “Forecast financial information including the Combined Claw-back and Rights Offer” figures
are extracted from the forecast financial information of Vividend for the year ended 31 August
2013, as disclosed above, and assume that the Combined Claw-back and Rights Offer is
implemented on 1 April 2013 and is fully subscribed.
2. Surplus proceeds generated by the Combined Claw-back and Rights Offer, after deduction of the
applicable transaction costs, are assumed to be used to settle bank facilities costing 7.8% per
annum.
3. All adjustments, with the exception of transaction costs, are expected to have a continuing
effect.
7.2. PARTIALLY (54.1%) SUBSCRIBED COMBINED CLAW-BACK AND RIGHTS OFFER
Pro forma financial Forecast financial Change
forecast information information (%)
excluding the including the
Combined Claw-back Combined Claw-back
and Rights Offer and Rights Offer
Earnings per Linked Unit (cents) 50.05 49.16 (1.8%)
Headline earnings per Linked Unit (cents) 54.25 52.91 (2.5%)
Distribution per Linked Unit (cents) 51.34 50.60 (1.4%)
Weighted number of Linked Units (‘000) 191 075 213 577 11.8%
Notes and assumptions:
1. The “Forecast financial information including the Combined Claw-back and Rights Offer” figures
are extracted from the forecast financial information of Vividend for the year ended 31 August
2013, as disclosed in above, and assume that the Combined Claw-back and Rights Offer is
implemented on 1 April 2013 and is partially (54.1%) subscribed.
2. Surplus proceeds generated by the Combined Claw-back and Rights Offer, after deduction of the
applicable transaction costs, are assumed to be used to settle bank facilities costing 7.8% per
annum.
3. All adjustments, with the exception of transaction costs, are expected to have a continuing
effect.
8. FOREIGN LINKED UNITHOLDERS
Any Linked Unitholder resident outside the common monetary area who receives the Combined Claw-
back and Rights Offer Circular and form of instruction, should obtain advice as to whether any
governmental and/or any other legal consent is required and/or any other formality must be observed to
enable such a subscription to be made in terms of such form of instruction.
The Combined Claw-back and Rights Offer does not constitute an offer in any jurisdiction in which it is
illegal to make such an offer and the Combined Claw-back and Rights Offer Circular and form of
instruction should not be forwarded or transmitted by recipients thereof to any person in any territory
other than where it is lawful to make such an offer.
The Combined Claw-back and Rights Offer Linked Units have not been and will not be registered under
the Securities Act of the United States of America. Accordingly, the Combined Claw-back and Rights Offer
Linked Units may not be offered, sold, resold, delivered or transferred, directly or indirectly, in or into the
United States or to, or for the account or benefit of, United States persons, except pursuant to
exemptions from the Securities Act. The Combined Claw-back and Rights Offer Circular and the
accompanying documents are not being, and must not be, mailed or otherwise distributed or sent in, into
or from the United States. The Combined Claw-back and Rights Offer Circular does not constitute an offer
of any securities for sale in the United States or to United States persons.
The Combined Claw-back and Rights Offer contained in the Combined Claw-back and Rights Offer Circular
does not constitute an offer in the District of Colombia, the United States, the Dominion of Canada, the
Commonwealth of Australia, Japan or in any other jurisdiction in which, or to any person to whom, it
would not be lawful to make such an offer. Non-qualifying Linked Unitholders should consult their
professional advisers to determine whether any governmental or other consents are required or other
formalities need to be observed to allow them to take up the Combined Claw-back and Rights Offer, or
trade their Entitlement. Linked Unitholders holding Vividend Linked Units on behalf of persons who are
non-qualifying Linked Unitholders are responsible for ensuring that taking up the Combined Claw-back
and Rights Offer, or trading in their Entitlements under that offer, do not breach regulations in the
relevant overseas jurisdictions.
To the extent that non-qualifying Linked Unitholders are not entitled to participate in the Combined Claw-
back and Rights Offer as a result of the aforementioned restrictions, the allocated rights in respect of such
non-qualifying Linked Unitholders shall lapse.
Cape Town
23 April 2013
Sponsor and corporate adviser
PSG Capital
Auditors and Reporting Accountants
Baker Tilly SVG
Independent Property Valuer
Active Blue Valuation Solutions cc
Attorneys and Trustee for Debenture Holders
Fluxmans Attorneys
Joint Underwriters
Coronation Asset Management (Proprietary) Limited, Momentum Asset Management (Proprietary)
Limited and Stanlib Asset Management Limited
Date: 23/04/2013 02:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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