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Acquisition of Elisenheim Property Development Company
TRUSTCO GROUP HOLDINGS LIMITED
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX Share Code: TUC
JSE Share Code: TTO
ISIN Number: NA000A0RF067
(“Trustco” or “the Company”)
ACQUISITION OF ELISENHEIM PROPERTY DEVELOPMENT COMPANY PROPRIETARY
LIMITED
1. INTRODUCTION
Shareholders are advised that Trustco, via its wholly owned subsidiary, Trustco Property
Holdings Proprietary Limited (“Trustprop”) entered into an agreement, dated 23 January
2014, (“the acquisition agreement”) with Philco Twenty Two Proprietary Limited (“Philco”),
subject to the fulfilment of certain conditions precedent, in terms of which Trustco will acquire
100% of the issued share capital of Elisenheim Property Development Company Proprietary
Limited (“Elisenheim”) for a purchase consideration of N$220 million (“the acquisition”).
The effective date of the acquisition shall be 1 December 2013, notwithstanding the date of
fulfilment of the conditions precedent to the acquisition set out herein below.
The parties have given each other the warranties and indemnities that are usual in
transactions of this nature.
2. INFORMATION ON ELISENHEIM
Elisenheim is the registered owner and developer of the Elisenheim development. The
development consists of a residential and commercial housing estate on approximately 1186
hectares of land. The development began in 2010 with sales of Phase 1 which make up 450
residential erven substantially completed and transferred to individual owners. Elisenheim
development is the largest privately owned town development in Namibia. The Elisenheim
development is situated within the Windhoek Basin in Windhoek, the capital of Namibia, and
falls within the city’s municipal boundaries.
3. RATIONALE FOR THE ACQUISITION
The acquisition is in line with Trustco’s strategy and its quest to contribute towards national
development through the expansion of residential accommodation. With this acquisition the
Group intends to address the shortage of housing in Namibia whilst utilizing the future
proceeds of sales of erven to increase earnings in the group.
4. PURCHASE CONSIDERATION
The purchase consideration payable by Trustprop is the amount of N$220 million and will be
paid in cash as follows:
4.1 An amount of N$150 000 000.00 on 15 April 2014 or on the date of the fulfilment or
waiver, as the case may be, of the last of the conditions precedent to the acquisition;
4.2 An amount of N$44 000 000.00 on 1 April 2015; and
4.3 An amount of N$26 000 000.00 on 1 April 2016.
Trustco will guarantee the punctual payment of the aforesaid amounts by Trustprop. Trustco
will fund the acquisition through bank funding.
5. CONDITIONS PRECEDENT
The acquisition agreement is subject to the fulfilment or waiver, as the case may be by or
before 15 April 2014 of the following outstanding conditions precedent:
5.1 written approval of the acquisition by the competition authorities with jurisdiction to
the extent necessary;
5.2 approval of the acquisition by the JSE Limited (“JSE”), Namibian Stock Exchange
(“NSX”) and Trustco shareholders in general meeting in accordance with the Listings
Requirements of the JSE and NSX and the Namibian Companies Act 2004, Act 28 of
2004 (“the Act”);
5.3 approval of the acquisition by Philco shareholders in terms of its shareholders’
agreement and the Act;
5.4 Elisenheim obtains written confirmation from the Minister of Local Government and
Housing (Townships Board and Namibia Planning Advisory Board) that the township
establishment of Elisenheim Extension No’s 1 to 21 have been extended until 31
December 2023 and 31 December 2015, respectively; and
5.5 Elisenheim has terminated all agreements with service providers, Burmeister and
Partners Proprietary Limited and INGPLAN Namibia and any of their affiliates on
terms agreed to by Trustprop prior to such termination.
6. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects of the acquisition, as set out below, is the
responsibility of the directors of Trustco. The unaudited pro forma financial effects are
presented in a manner consistent with the basis on which the historical financial information
has been prepared and in terms of Trustco’s accounting policies. The unaudited pro forma
financial effects have been presented for illustrative purposes only and, because of their
nature, may not give a fair reflection of Trustco’s financial position.
The table below sets out the unaudited pro forma financial effects of the acquisition on
Trustco, based on the unaudited, unreviewed, published results of Trustco for the six months
ended 30 September 2013.
Pro forma
financial
Published Pro forma information
financial adjustments after
information - - purchase purchase of
30 September of Elisenheim -
2013 Elisenheim 30 September Percentage
(i) (i) 2013 change
EPS (cents) (iii), (iv), (v) 8.59 (0.29) 8.30 -3.37%
Diluted EPS (cents) (iii), (iv),(v) 8.53 (0.29) 8.24 -3.37%
HEPS (cents) (iii), (iv),(v) 3.02 (0.29) 2.73 -9.59%
Diluted HEPS (cents) (iii), (iv),(v) 3.00 (0.29) 2.71 -9.59%
NAV per share (cents) (vi) 138.13 - 138.13 0.00%
TNAV per share (cents) (vi) 97.44 - 97.44 0.00%
Ordinary shares in issue (‘000) 772,142,090 - 772,142,090 0.00%
Ordinary shares in issue (‘000) 771,095,918 - 771,095,918 0.00%
(excl. treasury shares)
Weighted average number of 757,559,000 - 757,559,000 0.00%
ordinary shares in issue (‘000)
(excl. treasury shares)
Diluted weighted average number 762,481,000 - 762,481,000 0.00%
of ordinary shares in issue (‘000)
(excl. treasury shares)
The pro forma financial effects have been calculated on the basis of the following assumptions:
i) The “Before” financial information has been extracted without adjustment from the unaudited,
unreviewed, published results of Trustco for the six months ended 30 September 2013.
ii) The “Pro forma adjustments - purchase of Elisenheim” column, which is based on the
management accounts for the period ended 30 September 2013, also reflects the NAV and
the TNAV of Elisenheim at acquisition date with gross assets equating to N$ 300 million.
iii) It is assumed that the acquisition will be funded by debt. This debt is to be funded at an
interest rate of 10.25% (Namibian mortgage rate) and for the purposes of this announcement
is assumed to have been acquired on 1 April 2013.
iv) The once-off transaction costs to be paid amount to R1.1 million have been expensed.
Transaction costs relating to debt have been capitalised to the financial liability in terms of
IFRS.
v) The Basic earnings, Diluted earnings, Headline earnings and Diluted headline earnings per
share were calculated based on the assumption that the acquisition took place on 1 April
2013; and
vi) The NAV and NTAV per share were calculated as if the acquisition took place on 30
September 2013.
7. CATEGORISATION OF THE ACQUISITION
The acquisition constitutes a Category 1 acquisition in terms of the JSE Listings
Requirements and requires shareholder approval. Accordingly a circular detailing the terms
of the acquisition and a notice convening a general meeting of shareholders will be posted to
shareholders in due course.
By order of the Board.
DJ Steyn
Company Secretary
Windhoek
23 January 2014
JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
NSX Sponsor
IJG Securities (Pty) Limited
Date: 23/01/2014 03:51:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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