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Subscription for shares in Rockcastle Global Real Estate Company Limited
FORTRESS INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes: FFA ISIN: ZAE000141313
FFB ISIN: ZAE000141321
(Approved as a REIT by the JSE)
(“Fortress”)
SUBSCRIPTION FOR SHARES IN ROCKCASTLE GLOBAL REAL ESTATE COMPANY LIMITED
1. THE TRANSACTION
Fortress has agreed to subscribe for 18 656 716 shares in Rockcastle Global Real Estate Company Limited (Incorporated in the
Republic of Mauritius with rregistration number 108869 C1/GBL) (“Rockcastle”) in terms of a placement of 90 000 000 new
shares undertaken by Rockcastle (“the subscription”).
Fortress is subscribing for the new shares through Rockcastle’s Mauritian share register at a subscription price of USD1.30 per
share, equating to an aggregate subscription price of R248 497 569.
The subscription price will be settled in cash out of Fortress’ available debt facilities.
The Rockcastle shares are expected to be issued, listed and traded on the Alternative Exchange of the JSE Limited (“JSE”) and
the Stock Exchange of Mauritius Limited (“SEM”) from Tuesday, 10 December 2013. The Rockcastle shares will rank for
dividends in respect of the period 1 July 2013 to 31 December 2013.
Following this subscription Fortress will hold 107 500 716 shares in Rockcastle, equivalent to 20.28% of Rockcastle’s shares in
issue.
2. RATIONALE FOR THE ACQUISITION
This additional investment in Rockcastle is in line with Fortress’ strategy to increase its offshore exposure.
Rockcastle has a primary listing on the SEM and a secondary listing on the JSE. Rockcastle’s primary objective is to invest in
real estate assets and companies with attractive yields with the prospect of capital growth. The additional capital raised by
Rockcastle through the placement will be used to invest in listed real estate securities and/or direct property in selected
jurisdictions. Further information on Rockcastle and its activities is available at www.rockcastleglobalre.mu.
3. CATEGORISATION
The subscription constitutes a category 2 transaction in terms of the JSE Listings Requirements and accordingly does not
require approval by linked unitholders.
4. 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 subscription may have impacted on the historical financial results of Fortress for the year ended 30
June 2013. Due to their nature, the pro forma financial effects may not fairly present Fortress’ financial position, changes in
equity, results of operations or cash flows after the subscription. The pro forma financial effects are the responsibility of the
directors of Fortress and have not been reviewed or reported on by Fortress’ auditors or reporting accountants.
The pro forma financial effects have been prepared in accordance with Fortress’ accounting policies and in compliance with
IFRS.
Before Pro forma Percentage
(cents) after change
(cents) (%)
Basic earnings per A share 206.31 185.62 (10.0)
Basic earnings per B share 206.31 185.62 (10.0)
Basic earnings per A linked unit 318.33 297.64 (6.5)
Basic earnings per B linked unit 235.04 210.06 (10.6)
Headline earnings per A share 89.61 68.92 (23.1)
Headline earnings per B share 89.61 68.92 (23.1)
Headline earnings per A linked unit 201.63 180.94 (10.3)
Headline earnings per B linked unit 118.34 93.36 (21.1)
Distribution per A linked unit 112.02 112.02 -
Distribution per B linked unit 28.68 24.51 (14.5)
Net asset value and net tangible asset value per A linked unit (Rand) 14.90 14.90 -
Net asset value and net tangible asset value per B linked unit (Rand) 4.32 3.92 (9.3)
Weighted average number of A shares/linked units in issue 308 213 257 308 213 257 -
Actual number of A shares/linked units in issue 316 832 021 316 832 021 -
Weighted average number of B shares/linked units in issue 308 213 257 308 213 257 -
Actual number of B shares/linked units in issue 316 832 021 316 832 021 -
Notes and assumptions:
1. The amounts set out in the “Before” column have been extracted, without adjustment, from the audited consolidated
financial statements of Fortress for the year ended 30 June 2013.
2. Fortress subscribed for 18 656 716 Rockcastle shares for an aggregate subscription price of R248.50 million, in terms of
the Rockcastle placement referred to above, and subscribed for 23 075 000 Rockcastle shares for an aggregate
subscription price of R300.00 million, in terms of the Rockcastle placement announced on SENS on 4 October 2013.
3. Both of the above subscriptions for Rockcastle shares are assumed to have been implemented on 1 July 2012 for the
statement of comprehensive income purposes and on 30 June 2013 for the statement of financial position purposes.
4. The aggregate investment of R548.50 million is assumed to have been funded through third party interest-bearing debt at
a historic weighted average cost of debt of 8.48% in respect of the year ended 30 June 2013.
5. The acquisition of the 41 731 716 Rockcastle shares by Fortress resulted in a change in the accounting treatment of
Rockcastle from an investment designated at fair value to being equity accounted as an investment in an associate.
6. The change in the accounting treatment resulted in a reversal of the fair value gain on the investment of R172.30 million
and the recognition of a non-distributable loss from an associate of R4.93 million. A dividend receivable of R33.30
million was recognised based on Rockcastle’s distribution of 39.424 ZAR cents per share for the six months ended 30
June 2013 and 40.38108 ZAR cents per share for the six months ended 31 December 2012.
7. All statement of comprehensive income adjustments have a continuing effect.
4 December 2013
Corporate advisor and sponsor
Java Capital
Date: 04/12/2013 05:00:00 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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