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Acquisition of remaining shares not already held in Arbour Town Proprietary Limited and claim on loan account
RESILIENT PROPERTY INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/016851/06)
JSE share code: RES ISIN: ZAE000043642
(Approved as a REIT by the JSE)
(“Resilient” or “the company”)
ACQUISITION OF REMAINING SHARES NOT ALREADY HELD IN ARBOUR TOWN PROPRIETARY LIMITED AND CLAIM ON LOAN ACCOUNT
1. INTRODUCTION
Resilient, which currently owns 10% of the issued share capital of Arbour Town Proprietary Limited
(“Arbour Town”), has concluded an agreement with Marketcorp Holdings 46 Proprietary Limited
(“Marketcorp”), L Peens, J Peens, S Peens, A Beauregard and R Parbhoo to acquire the remaining
90% of the issued share capital of Arbour Town together with Marketcorp’s claim on loan account
against Arbour Town (the “Arbour Town acquisition”).
2. RATIONALE
The Arbour Town acquisition is in line with Resilient’s strategy of investing in dominant regional
retail properties.
3. DETAILS OF THE ARBOUR TOWN ACQUISITION
Resilient will acquire the remaining 90% of the shares in and claims on loan account against Arbour
Town that it does not already own. The effective date of the acquisition will be 15 days after the
condition referred to in 4 below is met (the “effective date”).
Prior to the Arbour Town acquisition by Resilient, Arbour Town has disposed of a 25% undivided
share in the rental enterprises referred to below to Fortress Income 2 Proprietary Limited (“Fortress”)
(the “Fortress disposal”). The Fortress disposal is subject to the suspensive condition that on or
before 31 March 2014 the shareholder/s of Arbour Town pass a unanimous resolution approving the
Fortress disposal, failing which the Fortress disposal will never become of any force or effect.
Accordingly, as a result of the Arbour Town acquisition and the Fortress disposal, Resilient will
effectively own a 75% interest in The Galleria and Arbour Crossing. The Galleria (Erf 237
Umbogintwini Registration Division ET KwaZulu-Natal) is a shopping centre of 88 443 square
metres, the weighted average net rental per square metre of which is currently R135.52 per square
metre. Arbour Crossing (Portion 2 of Erf 235 Umbogintwini Registration Division ET KwaZulu-
Natal) is a shopping centre of 39 786 square metres, the weighted average net rental per square metre
of which is currently R85.66 per square metre.
4. TERMS AND CONDITION PRECEDENT
The purchase price of R1 937 430 000 payable in respect of the Arbour Town acquisition is payable
by Resilient in cash on the effective date. Resilient will receive R548 611 111 in cash from the
Fortress disposal resulting in a net purchase price of R1 388 818 889.
In the event that the effective date is delayed beyond 30 November 2013, the purchase price will be
increased by an amount of R340 000 per day with effect from 1 December 2013 to the effective date.
The agreement governing the Arbour Town acquisition (the “Arbour Town acquisition agreement”)
provides for warranties and indemnities that are standard for acquisitions of this nature.
The Arbour Town acquisition is subject to the suspensive condition that the Competition Commission
or the Competition Tribunal approves the implementation of the Arbour Town acquisition within 90
days from the date of signature of the Arbour Town acquisition agreement, failing which the Arbour
Town acquisition agreement will never become of any force or effect.
5. VALUATION
Arbour Crossing and The Galleria were valued at R2 197 000 000 as at 1 July 2013 by Peter Parfitt of
Quadrant Properties Proprietary Limited, who is independent and registered as a professional valuer in
terms of the Property Valuers Profession Act, No 47 of 2000.
6. FINANCIAL EFFECTS
The pro forma financial effects, set out in the table below, have been prepared for illustrative purposes
only, to provide information on how the Arbour Town acquisition may have impacted on the historical
financial results of Resilient for the six months ended 30 June 2013 and on the basis set out in the
notes to the pro forma financial effects below. Due to their nature, the pro forma financial effects may
not fairly present Resilient’s financial position, changes in equity, results of operations or cash flows
after the Arbour Town acquisition. The pro forma financial effects are the responsibility of the
directors of Resilient and have not been reviewed or reported on by Resilient’s auditors or reporting
accountants.
The pro forma financial effects of the Arbour Town acquisition on basic earnings per share and per
linked unit, headline earnings per linked unit, distribution per linked unit and net asset value and net
tangible asset value per linked unit, are not significant and have not been disclosed.
The pro forma financial effects have been prepared in accordance with Resilient’s accounting policies
and in compliance with IFRS.
Unadjusted
before the Pro forma after the
Arbour Town Arbour Town
acquisition acquisition
(cents) (cents) % change
Headline earnings per share 187.55 194.69 3.8
Weighted average number of shares in
issue 289 544 070 289 544 070 -
Notes and assumptions:
1. The amounts set out in the “Unadjusted before the Arbour Town acquisition” column have been
extracted, without adjustment, from the preliminary summarised audited consolidated financial
statements of Resilient for the six months ended 30 June 2013.
2. The Arbour Town acquisition is assumed to be implemented on 1 January 2013 for the statement
of comprehensive income purposes.
3. Resilient will receive R548 611 111 in cash from the Fortress disposal resulting in a net purchase
price of R1 388 818 889.
4. The purchase price is assumed to be entirely funded through third party bank debt which incurs
interest at Resilient’s historical weighted average cost of debt of 8.24% per annum.
5. Arbour Crossing and The Galleria earned historical aggregate net rental income of R71.2 million
(65%) (inclusive of a straight-lining rental adjustment of R20.7 million) for the six months
ended 30 June 2013.
6. The historical property revenue and expenses were extracted from the underlying books and
records of each property which have not been reviewed or reported on by auditors or reporting
accountants. However, the directors of Resilient are satisfied with the quality of the information.
7. Estimated transaction costs of approximately R0.3 million are assumed to be incurred by
Resilient and have been capitalised.
8. The properties are accounted for at fair value as valued by Quadrant Properties Proprietary
Limited.
9. All statement of comprehensive income adjustments have a continuing effect.
7. CATEGORISATION
The Arbour Town acquisition is a category 2 transaction in terms of the JSE Listings Requirements
and accordingly does not require approval by linked unitholders.
15 August 2013
Corporate advisor and sponsor
Java Capital
Date: 15/08/2013 09:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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