Wrap Text
Proposed restructure and adoption of a new memorandum of incorporation
Acucap Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/021725/06)
Share code: ACP
ISIN: ZAE000037651
(Approved as a REIT by the JSE)
("Acucap" or "the Company")
PROPOSED RESTRUCTURE THROUGH THE SUBSTITUTION OF THE LINKED UNITS FOR NO
PAR VALUE SHARES, ADOPTION OF A NEW MEMORANDUM OF INCORPORATION AND THE
CREATION OF 500 000 000 AUTHORISED NO PAR VALUE SHARES
1. INTRODUCTION
Acucap qualified as a Real Estate Investment Trust ("REIT") with effect from the commencement
of its current financial year, being 1 April 2013, following the approval by the JSE of its REIT status.
It is accordingly no longer required that Acucap maintains its current capital structure
comprising of variable rate, subordinated debentures ("the debentures") each of which is
indivisibly linked to a share, together comprising a linked unit.
The board of directors of Acucap ("the Board") is therefore proposing that Acucap's current
linked unit capital structure be replaced with a pure equity, share-only structure ("the
Acucap Restructure").
The Acucap Restructure comprises the following inter-conditional steps:
1.1. a substitutive share-for-share transaction in terms of section 43 of the Income Tax
Act, 58 of 1962, as amended (the "Tax Act") in terms of which Acucap will
substitute/exchange the issued linked units for no par value shares, resulting in
Acucap linked unitholders becoming holders of no par value shares and pursuant
whereto the linked units will be cancelled ("the Substitution");
1.2. the adoption of a new Memorandum of Incorporation ("New MOI") as further
described in paragraph 4 below; and
1.3. the creation of 500 000 000 authorised no par value shares for the purpose of, inter alia, the
Substitution.
2. RATIONALE FOR THE ACUCAP RESTRUCTURE
The Tax Act now contemplates the flow through of net income by a REIT to its
investors, notwithstanding the legal form of the instrument held by investors, thereby
obviating the need for a linked unit structure.
In addition, in terms of the recently revised section 13 of the JSE Listings Requirements,
REITs are required to ensure that their total consolidated liabilities do not exceed 60% of
their consolidated assets.
An application of International Financial Reporting Standards (which is applicable to all JSE-
listed companies) results in the debenture component of the linked units (even though
subordinated) being included in the calculation of total consolidated liabilities, effectively
distorting this ratio of debt to assets. A share only capital structure will mean that Acucap
will have additional headroom to take on additional debt should the need arise and
therefore the flexibility to pursue an acquisitive growth strategy whilst limiting potential
shareholder dilution.
Accordingly, the board of Acucap is proposing that the Acucap linked unit capital structure
should be replaced by a share only capital structure.
3. THE MECHANICS OF THE ACUCAP RESTRUCTURE, CIRCULAR TO LINKED UNITHOLDERS
AND FAIR AND REASONABLE OPINION
The Substitution is proposed to be implemented in terms of section 43 of the Tax Act
("section 43") by way of a scheme of arrangement as contemplated in sections 114 and 115
of the Companies Act No. 71 of 2008 ("the Act"), in terms of which each linked unit in issue
will be replaced in its entirety with a no par value share. The effect of section 43 is that
resident linked unitholders should expect to qualify for roll-over relief and as such should
not be subject to any tax liability as a result of the Acucap Restructure.
Section 114 of the Act requires that the Company obtain an opinion from an independent
expert on whether the terms of the scheme of arrangement are fair and reasonable to
scheme participants. In compliance with the aforementioned, Acucap has engaged Mazars
Corporate Finance (Pty) Ltd ("Mazars"), which has provided the Board with an opinion
stating that the terms of the Substitution are fair and reasonable as far as linked unitholders
of Acucap are concerned.
In terms of section 115 of the Act, a scheme of arrangement must be approved in terms of a
special resolution of shareholders. In addition, the abrogation of the current Memorandum
of Incorporation of Acucap in its entirety and the subsequent adoption of the New MOI,
along with the creation of 500 000 000 authorised no par value shares, requires approval by
linked unitholders by way of special resolutions.
A circular containing further information pertinent to, inter alia, the Acucap Restructure and
notices of general meeting of linked unitholders in their capacity as Acucap shareholders
and Acucap debenture holders, respectively ("General Meetings") for the purpose of
considering and, if deemed fit, passing, the requisite shareholder and debenture holder
resolutions and which includes a copy of the fair and reasonable opinion, will be posted to
linked unitholders on or about 31 March 2014 ("the Circular").
4. ADOPTION OF THE NEW MOI
In order to enable linked unitholders to make an assessment of whether they consider their
rights or interests to be affected as a result of the adoption of the New MOI, a summary of
the salient terms of the New MOI and the current Memorandum of Incorporation of Acucap
will be included in the Circular. In addition, linked unitholders seeking additional
information will be able to access the complete New MOI and the current Memorandum of
Incorporation of Acucap on Acucap's website, www.acucap.co.za with effect from the date
of posting of the Circular (on or/about 31 March 2014) to the date of the General Meetings
(being 5 May 2014). Copies of both the New MOI and the current Memorandum of
Incorporation of Acucap will also be available for inspection at Acucap's registered office for
the same period.
5. INDICATIVE SUPPORT FOR THE ACUCAP RESTRUCTURE
Acucap has received indicative support from linked unitholders, collectively
holding 32% of the Acucap linked units, to vote in favour of the Acucap
Restructure at the General Meetings.
6. CONDITIONS PRECEDENT
The implementation of the Acucap Restructure is subject to the fulfilment or, where possible,
waiver, of, inter alia, the following conditions precedent:
6.1. approval by linked unitholders of the Substitution by way of a scheme of
arrangement;
6.2. approval by linked unitholders of the adoption of the New MOI by way of a
shareholders' special resolution and linked unitholder approval for the creation of
the no par value shares;
6.3. confirmation by the Companies and Intellectual Property Commission ("CIPC") that
it has accepted and placed on file all the relevant documents required to effect the
Acucap Restructure; and
6.4. such other regulatory and other approvals, as fully detailed in the Circular.
7. SALIENT DATES AND TIMES
2014
Record date to be sent Notices of General Meetings Thursday, 20 March
Circular incorporating Notices of General Meetings, Proxy Forms Monday, 31 March
and Form of Surrender posted to linked unitholders, on or about
Last day to trade in order to be eligible to vote at the General Wednesday, 16 April
Meetings
Record date in order to be eligible to participate in and vote at Friday, 25 April
the General Meetings ("Record Date")
Last day to lodge Proxy Forms in respect of the General Meeting Wednesday, 30 April
with the Transfer Secretaries by 9:00 on
Last date for shareholders objecting to the Acucap Restructure to Monday, 5 May
notify Acucap of their objection ("objecting linked unitholders") in
terms of section 164(3) of the Act before 9:00
General Meeting of Acucap Shareholders held at 9:00 on Monday, 5 May
General Meeting of Acucap Debenture Holders held immediately Monday, 5 May
after the conclusion of the General Meeting of Acucap
Shareholders
Results of the General Meetings and finalisation announcement Monday, 5 May
released on SENS on
Results of the General Meetings and finalisation announcement Tuesday, 6 May
published in the South African press on
Acucap to send objecting shareholders (if any) notices of the Tuesday, 6 May
adoption of the Acucap Restructure in terms of section 164(4) of
the Act
Last date for a shareholder, who voted against the passing of the Tuesday, 13 May
shareholder and debenture holder resolutions proposing the
Substitution, to require Acucap to apply to court for approval of
the Substitution, if 15% or more of the voting rights exercised
were against the resolution, under section 115(3)(a) of the Act
Last date for Acucap to apply to the court for approval of the Tuesday, 20 May
Substitution in the event that sufficient objections thereto are
received under section 115(3)(b) of the Act
Last date for dissenting Acucap linked unitholders to deliver a Tuesday, 3 June
written notice to Acucap demanding Acucap to pay the fair value
of all Acucap linked units held by such linked unitholders under
section 164 of the Act
Expected finalisation date of the Acucap Restructure (see note 1) Wednesday, 4 June
Last date to trade in Acucap linked units under the current ISIN Friday, 20 June
number ZAE000037651 at the close of business on
Listing of 183 511 083 no par value shares issued pursuant to the Friday, 20 June
Substitution under share code ACP and new ISIN number
ZAE000188660 at 9:00 on
Suspension of the listing of Acucap linked units on the JSE under Monday, 23 June
the previous ISIN number ZAE000037651 from commencement of
trade on
Expected record date for the Acucap Restructure Friday, 27 June
Expected date on which CSDP/broker accounts will be credited Monday, 30 June
with the no par value shares and statements reflecting no par
value shareholdings will be posted to certificated linked
unitholders ("Pay Date")
Expected date of termination of listing of Acucap linked units at Monday, 30 June
the commencement of business on
1. The above dates and times are subject to change. Any material changes will be released on SENS and in the South
African press. It should be noted that if the Acucap Restructure is approved at the General Meetings it is still required
to be implemented through certain filings at the CIPC. Acucap does not have control over the timing and processes at
the CIPC.
2. All times quoted in this Circular are local times in South Africa.
3. If the General Meetings are adjourned or postponed, proxy forms submitted for the initial General Meetings will
remain valid in respect of any adjournment or postponement of the General Meetings unless withdrawn by the
Acucap Shareholder or debenture holders concerned.
4. The Pay Date of 30 June 2014 is dependent on the fulfilment and/or waiver of the Conditions Precedent referred to in
paragraph 6.
8. FINANCIAL EFFECTS
Earnings and headline earnings per no par value share for the six months ended 30 September 2013 and the net asset value and tangible
net asset value as at 30 September 2013, calculated after the implementation of the Acucap Restructure, will be unchanged from the
earnings and, headline earnings per linked unit for the six months ended 30 September 2013 and the net asset value and tangible net
asset value per linked unit as at 30 September 2013 respectively, before the implementation of the Acucap Restructure, save for the
effect of transaction costs. The transaction costs will have a less than 3% effect on earnings, headline earnings, net asset value and
tangible net asset per linked unit/no par value share and as such are not disclosed.
Cape Town
26 March 2014
Corporate Advisor and Sponsor
QUESTCO
Legal and tax advisor to Acucap on the Acucap Restructure
ENS
Independent Expert on the Acucap Restructure
MAZARS
Date: 27/03/2014 07:05:00 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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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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