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Financial information relating to the acquisition by VPIF of properties in Greenstone Hill in Gauteng, rights offer
VUNANI PROPERTY INVESTMENT FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE code: VPF
ISIN: ZAE000157459
(“VPIF” or “the company”)
FINANCIAL INFORMATION RELATING TO THE ACQUISITION BY VPIF OF
PROPERTIES IN GREENSTONE HILL IN GAUTENG, RIGHTS OFFER AND WITHDRAWAL
OF THE CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Unitholders are referred to the announcement, dated 12 April
2013, which contained details of the inter-conditional
agreements relating to the acquisition by VPIF of the:
1.1. shares and loan accounts in Greenstone Hill Office Park
Proprietary Limited (“Greenstone”). Greenstone owns
buildings 4, 5, 10 - 15 in the sectional title schemes
known as Greenstone Hill Office Park SS1149/2008 and
SS599/2009 with associated exclusive use areas, situated
at Erf 1841 Greenstone Hill Extension 22 Township,
Gauteng (“Greenstone Properties”); and
1.2. rental enterprise conducted as a going concern of
buildings 2 and 6 of the sectional title scheme known as
Greenstone Hill Office Park SS 1149/2008 and associated
exclusive use areas, situated at Erf 1841 Greenstone Hill
Extension 22 Township, Gauteng (“Buildings 2 and 6”),
jointly referred to as “the transaction”.
2. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The table below sets out the unaudited and unreviewed pro forma net
asset value and net tangible asset value effect per unit of the
transaction on VPIF, for which the directors are responsible.
The unaudited and unreviewed pro forma effects on net asset value
and net tangible asset value per unit:
• are presented for illustrative purposes only and, because of
their nature, may not fairly present the company’s financial
position, changes in equity, results of operations and cash
flows subsequent to the transaction;
• have been compiled, without adjustment, from the unaudited
consolidated financial results for the six months ended 31
December 2012;
• are presented in a manner consistent with the format and
accounting policies adopted by VPIF; and
• are based on the assumption that the transaction took place on
31 December 2012.
Unaudited Unaudited Change
before the and
transaction unreviewed
pro-forma
after the
transaction
(Notes 1&2)
Net asset value per linked
unit (cents) 742.44 794.58 7.02%
Tangible net asset value
less deferred tax per
linked unit (cents) 811.92 865.59 6.61%
Number of units in issue
(‘000) 120 618 144 208
Notes and assumptions:
1. The “Pro forma after the transaction” column represents net
asset value per linked unit and net tangible asset value per
linked unit after the transaction and includes the effect of
the transaction and transfer of the Greenstone Properties
and Buildings 2 and 6 for a total purchase consideration of
R137.909 million, including a purchase price increase of
0.75% per month from 1 April 2013 to date of transfer on or
about 31 July 2013 of approximately R7.770 million; all
acquired as going concern assets. Debt of R121.018 million,
owed by Greenstone to Investec Bank Limited has been assumed
to have been settled in full.
2. It has been assumed that the transaction is entirely equity
funded by the issue of 23.590 million linked units in terms
of a proposed rights offer at an assumed price of R11.40 per
linked unit (this pricing is for illustrative purposes only
and final pricing will be determined before the finalisation
date).
The estimated once-off transaction expenses of R2.229
million will be paid from the proceeds raised via the
proposed rights issue and capitalised to the respective
Greenstone Properties and Buildings 2 and 6.
3. FORECAST INFORMATION RELATING TO THE TRANSACTION
The forecast financial information relating to the transaction
for the financial periods ending 30 June 2013 and 30 June 2014
is set out below. The forecast financial information has not
been reviewed or reported on by a reporting accountant in terms
of section 8 of the Listings Requirements of the JSE and is
solely the responsibility of the company’s directors.
Forecast for Forecast for
the 2 months the 12 months
ending ending
30 June 2013 30 June 2014
R’000 R’000
Investment property Income 5 330 34 663
Straight-line rental (1 215) (8 797)
adjustment
Revenue 4 115 25 866
Property expenses (1 709) (11 322)
Net property 2 406 14 544
Income
Other operating expenses (20) (30)
Asset management fees (216) (1 295)
Operating profit 2 170 13 219
Finance costs - -
Debenture interest (3 385) (22 016)
Loss before income tax (1 215) (8 797)
Income tax 340 2 463
Loss for the period (875) (6 334)
Total comprehensive income (875) (6 334)
for the period attributable
to equity holders
Reconciliation of attributable income to distributable income
Total comprehensive income for (875) (6 334)
the period attributable to
equity holders
Debenture interest 3 385 22 016
Straight-line rental 1 215 8 797
adjustment
Income tax (340) (2 463)
Distributable income 3 385 22 016
Notes:
1. Investment property income includes all tenant recoveries
while Property expenses include all consumption expenditure
including property management fees.
2. Other operating expenses include audit fees as 8 of the 10
buildings are housed in Greenstone.
3. Asset management fees are calculated as 0.5% of the
enterprise value created by the Greenstone Properties and
Buildings 2 and 6.
4. The debenture interest has been calculated in accordance
with the provision of the Debenture Trust Deed. It is
assumed that 100% of the distributable income will be
distributed.
5. Income tax has been provided on the straight-line rental
adjustment.
6. RIGHTS OFFER
5.1 Introduction
Unitholders are advised that the directors have resolved to
raise approximately R455 million by way of a renounceable
rights offer of 39.912 million new linked units to its
unitholders at a subscription price of R11.40 per rights
unit (“rights offer price”)(this pricing is for
illustrative purposes only and final pricing will be
determined before the finalisation date) in the ratio of
33.08980 rights units for every 100 linked units held
(“rights offer”). The rights offer price is based on the
volume weighted average traded price on the JSE Limited
over the 10 business days ended 21 May 2013. The rights
units, once issued, will rank pari passu in all respects
with the existing issued VPIF units.
5.2 Purpose of the rights offer and use of the proceeds
The purpose of the rights offer is to raise capital to fund
the purchase consideration of the transaction set out above
as well as to settle debt utilised in respect of previously
announced acquisitions.
5.3 Financial effects of the rights offer
The table below sets out the unaudited and unreviewed pro
forma financial effects of the rights offer on net asset value
and net tangible asset value per unit, for which the directors
are responsible.
The unaudited and unreviewed pro forma financial effects per
unit:
• are presented for illustrative purposes only and, because
of their nature, may not fairly present the company’s
financial position, changes in equity, results of
operations and cash flows subsequent to the rights
offer;
• have been compiled, without adjustment, from the unaudited
consolidated financial results for the six months ended 31
December 2012; and
• are presented in a manner consistent with the format and
accounting policies adopted by VPIF.
Unaudited Unaudited Unaudited Change
before and and
the unreviewed unreviewed
rights pro-forma pro-forma
offer after the after the
transaction rights
as per 2 offer
above
Net asset
value per
linked unit
(cents) (notes
1 & 2) 742.44 794.58 828.22 11.55%
Tangible net
asset value
less deferred
tax per linked
unit (cents)
(notes 1 & 2) 811.92 865.59 892.01 9.86%
Number of
units in issue
(‘000) 120 618 144 208 160 530
Notes:
1. The effects relating to the net asset value and
tangible net asset value per linked unit are based on
the following assumptions and information:
• the rights offer was effective 31 December 2012;
• R455 million was received pursuant to the
subscription for the 39.912 million rights units;
• expenses of R2.409 million relating to the rights
offer were written off against reserves;
• the rights offer proceeds, net of transaction
costs, were utilised to settle the transaction
described above and R183.662 million of floating
debt.
2. The adjustments will have a continuing effect.
5.4 Further announcements and circular
Further announcements will be made in due course relating
to the salient dates, pricing and any other matters
pursuant to the rights offer.
A circular to unitholders, giving full details of the
rights offer, will be mailed to unitholders in due course.
7. WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
Having regard to the information set out above, the cautionary
announcement is hereby withdrawn.
Sandton
28 May 2013
Independent Lead Sponsor
Grindrod Bank Limited
Joint Corporate Adviser and Joint Sponsor
Vunani Corporate Finance
Legal Adviser
Cliffe Dekker Hofmeyr Inc.
Joint Corporate Adviser and Investment Bank
Investec Bank Limited
Competition Attorneys
Vani Chetty Competition Law (Pty) Limited
Date: 28/05/2013 04:18:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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