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Update Regarding A) The Bronze Door Acquisition B) Acquisition Of New Properties C) Renewal Of Cautionary
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”)
UPDATE REGARDING A) THE BRONZE DOOR ACQUISITION B) ACQUISITION OF NEW PROPERTIES C) RENEWAL OF
CAUTIONARY
A) THE BRONZE DOOR ACQUISTION
Vividend Linked Unitholders are referred to the SENS announcement dated Monday, 1 July 2013 (“the
Announcement”) in respect of the Company entering into acquisition agreements relating to the acquisition of
properties and associated letting enterprises (“the Bronze Door Properties”) from Bronze Door Properties (Pty)
Ltd (“the Bronze Door Acquisition”). Linked Unitholders are hereby advised that the conditions precedent
requiring satisfactory conclusions to the due diligence investigations undertaken on the Bronze Door Properties
have not been fulfilled and accordingly the Bronze Door Properties will no longer be acquired by Vividend.
B) ACQUISITION OF NEW PROPERTIES
1. THE BEKA INDUSTRIAL PARKS ACQUISITION
Linked Unitholders of the Company are hereby advised that the Company has entered into an agreement with
Candela Property Holdings (Pty) Ltd, Seeho (Pty) Ltd and Erf 15980 Bloemfontein (Pty) Ltd (“the Vendors”) to
acquire the properties and associated letting enterprises commonly known as BEKA Industrial Parks (“the BEKA
Industrial Parks Properties”) situated in Clayville Gauteng, Penral Park Durban and Hilton Township
Bloemfontein (“the BEKA Industrial Parks Acquisition”).
The effective date of the BEKA Industrial Parks Acquisition shall be the date of transfer of the BEKA Industrial
Parks Properties into the name of the Company, which, subject to fulfilment of the conditions precedent, is
expected on or about 1 September 2013.
2. RATIONALE FOR THE ACQUISITION
The BEKA Industrial Parks Acquisition is consistent with Vividend’s strategy of identifying and acquiring
properties that have free cash flow yields that provide adequate value enhancement to Linked Unitholders from
the effective date of their acquisition. The BEKA Industrial Parks Acquisition provides further quality, stability,
longevity and growth potential to the Company’s earnings by introducing a well-established, single tenanted
property in Gauteng with a low risk, long-term triple net lease into the Company’s lease profile, while at the
same time providing tenantable vacancies in well located areas in KwaZulu Natal and the Free State at a
marginal cost to the Company.
3. PURCHASE CONSIDERATION
The purchase consideration applicable to the BEKA Industrial Parks Acquisition is R145,000,000, payable in cash
against transfer of the BEKA Industrial Parks Properties into the name of the Company. The Company will fund
the purchase consideration through a combination of debt financing and new equity raised from new and/or
existing Linked Unitholders via a vendor consideration placement.
4. THE BEKA INDUSTRIAL PARKS PROPERTIES
Details of the BEKA Industrial Parks Properties, as at the expected effective date, are as follows:
Property Property Geographical Sector Cost/Value GLA Cost/ Average
Name Address Location (Rand) (m2) Value Gross
per Rental
GLA per m2
(Rand) per
month
(Rand)
BEKA Park JHB Erf Gauteng Industrial 142,000,000 21,043 6,749 62
109,110,111,1 & Office
12, 4313,
4371 Clayville
Gauteng and
Portion 5 of
Erf 339
Clayville
Gauteng
BEKA Park Sections 1 and KwaZulu Natal Industrial 1,500,000 735 2,040 Nil
Durban 2 of Sectional & Office
Title Scheme
No. 478/96
Penral Park,
Durban,
KwaZulu Natal
BEKA Park Erf 15980 Bloemfontein Industrial 1,500,000 391 3,836 Nil
Bloemfontein Hilton & Office
Township,
Bloemfontein,
Free State
TOTAL 145,000,000 22,169 6,541 58
/AVERAGE
Notes:
a) Industrial constitutes 82% of the GLA within the BEKA Industrial Parks Properties, while Office constitutes
18% of the GLA within the BEKA Industrial Parks Properties.
5. PROPERTY SPECIFIC INFORMATION
Details regarding the BEKA Industrial Parks Acquisition, as at the expected effective date, are set out below:
Property Name Purchase Yield Weighted Weighted Lease Vacancy %
attributable to Linked Average Lease Duration (Yrs) by GLA
Unitholders (%) Escalation (%) (%)
BEKA Park JHB 13.1 8.0 6.7 Nil
BEKA Park Nil N/A N/A 100%
Durban
BEKA Park Nil N/A N/A 100%
Bloemfontein
Average 12.8 8.0 6.7 5%
Notes:
a) The Purchase Yield attributable to Linked Unitholders assumes a 40% Loan to Value (LTV) gearing
limit with an annual interest cost of 7.8%, which is the current indicative cost available to the
Company from its bankers.
b) Corporate tenants with low levels of default risk (‘A Type’ Tenants) constitute 100% of the GLA and
100% of the Gross Rentals within the BEKA Industrial Parks Properties. The BEKA Park JHB Property
is fully occupied by a high-tech light industrial tenant that forms part of the Schreder Group of
Companies (Belgium)
c) Save for costs associated with the transfer of the BEKA Industrial Parks Properties, which are
estimated at R500,000, no expenditure will be incurred by the Company in connection with the
BEKA Industrial Parks Acquisition.
d) The costs of the BEKA Industrial Parks Properties are considered to be their fair market value, as
determined by the Directors of the Company. The directors of the Company are not independent
and are not registered as professional valuers or as professional associate valuers in terms of the
Property Valuers Profession Act, No 47 of 2000.
6. CONDITIONS PRECEDENT
The BEKA Industrial Parks Acquisition is subject the following material conditions precedent:
a) The satisfactory completion of due diligence investigations to be performed by the Company on the BEKA
Industrial Parks Properties;
b) The Company obtaining the appropriate irrevocable funding commitments from existing and/or new debt
funders in relation to the BEKA Industrial Parks Acquisition;
c) The Company obtaining the appropriate irrevocable undertakings to subscribe for additional equity from
new and/or existing Linked Unitholders in terms of a vendor consideration placement; and
d) Competition Commission approval, where applicable, in terms of the Competition Act 89 of 1998.
The Company is entitled to waive the conditions precedent set out in paragraphs a), b) and c) above.
7. WARRANTIES
The Vendors, in addition to providing Vividend with a Gross Rental Guarantee for a 5 year period from the date
of transfer, have provided warranties and indemnities to the Company that are standard to a transaction of this
nature
8. PRO FORMA FINANCIAL EFFECTS OF THE BEKA INDUSTRIAL PARKS ACQUISITION
The pro forma financial information in relation to the BEKA Industrial Parks Acquisition is still in the process of
being finalised and will be published in due course.
9. FORECAST FINANCIAL INFORMATION OF THE BEKA INDUSTRIAL PARKS ACQUISITION
The forecast financial information in relation to the BEKA Industrial Parks Acquisition is still in the process of
being finalised and will be published in due course.
10. CATEGORISATION
The BEKA Industrial Parks Acquisition is a Category 2 acquisition in terms of the Listings Requirements of the JSE
Limited.
C) RENEWAL OF CAUTIONARY ANNOUNCEMENT
Linked unitholders are referred to the cautionary announcements dated 10 May 2013, 24 June 2013 and 1 July
2013 and are advised to continue exercising caution when dealing in the Company’s securities until a full
announcement regarding the pro forma financial effects and the forecast financial information in relation to the
Bryanston Gate Acquisition, the Oakwood Acquisition and the BEKA Industrial Parks Acquisition is made.
22 July 2013
Cape Town
Sponsor
PSG Capital
Date: 22/07/2013 08:00:00 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
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