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HYPROP INVESTMENTS LIMITED - Posting of circular, notice of debenture holders scheme meeting and notice of shareholders general meeting

Release Date: 06/06/2014 15:21
Code(s): HYP     PDF:  
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Posting of circular, notice of debenture holders’ scheme meeting and notice of shareholders’ general meeting

HYPROP INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
JSE share code: HYP ISIN: ZAE000003430
(Approved as a REIT by the JSE)
(“Hyprop” or “the company”)


POSTING OF CIRCULAR, NOTICE OF DEBENTURE HOLDERS’ SCHEME MEETING AND NOTICE OF SHAREHOLDERS’ GENERAL MEETING


1.   INTRODUCTION

     Combined unitholders are advised that the company has on Friday, 6 June 2014 posted or otherwise distributed
     a circular to combined unitholders (the “circular”) relating to:

     -     the conversion of the company’s current combined unit capital structure to an all share structure by:
           -      the delinking of each Hyprop ordinary share from a Hyprop debenture so as to no longer constitute
                  a combined unit;
           -      the cancellation of each debenture and concomitant waiver, for no consideration, by the debenture
                  holders of their right to be repaid the debt reflected in each debenture;
           -      the capitalisation of the value allocated to each debenture in the books of account of the company
                  plus the amortised debenture premium included in non-distributable reserves, equating to the issue
                  price of each debenture to Hyprop’s stated capital account; and
           -      the termination of the Debenture Trust Deed,
           to be effected by way of a scheme of arrangement in terms of section 114 of the Companies Act, which
           scheme is being proposed by the company between the company and its debenture holders
           (the “scheme”);
     -     the amendment of Hyprop’s Memorandum of Incorporation to reflect the change in Hyprop’s capital
           structure;
     -     the amendment of Hyprop’s Debenture Trust Deed to enable and give effect to the change in Hyprop’s
           capital structure; and
     -     the subsequent termination of Hyprop’s Debenture Trust Deed.

     (collectively the “transactions”).

     The circular contains a notice convening a debenture holders’ scheme meeting, to be held at 10:00 on Tuesday,
     15 July 2014 at the registered office of Hyprop at 2nd Floor, Cradock Heights, 21 Cradock Avenue, Rosebank,
     2196, for the purpose of considering and, if deemed fit, passing, with or without modification the resolutions
     required to approve the transactions including the scheme.

     The circular further contains a notice convening a shareholders’ general meeting, to be held at the later of 10:30
     or 10 minutes after the completion of the debenture holders’ scheme meeting on Tuesday, 15 July 2014 at the
     registered office of Hyprop at 2nd Floor, Cradock Heights, 21 Cradock Avenue, Rosebank, 2196, for the
     purpose of considering and, if deemed fit, passing, with or without modification, the resolutions required to
     approve the transactions.

     The circular is also available in electronic format on the company’s website at www.hyprop.co.za.

2.   RATIONALE

     In terms of the revised section 13 of the JSE Listings Requirements (which has been amended to cater for REIT
     legislation) the total consolidated IFRS liabilities of a REIT may not exceed 60% of its total consolidated IFRS
     assets. The liability constituted by a company’s issued debentures is (in terms of IFRS) required to be taken into
     account in the calculation for the determination of such 60% threshold.
     By converting its capital structure, Hyprop will, by virtue of the cancellation of its issued debentures, reduce the
     ratio of its total consolidated liabilities to total consolidated assets to circa 31.57% (calculated as at the last
     practicable date with reference to Hyprop’s unaudited interim results for the six months ended
     31 December 2013). This will ensure that the company’s consolidated liabilities remain below the
     aforementioned 60% threshold requirement.

     Additional benefits in converting the company’s current combined unit capital structure to an all share structure
     include -
     -     the alignment of the company’s capital structure with the internationally recognised all equity REIT
           capital structures; and
     -     simplifying the administration and accounting treatment of the company’s capital structure; and
     -     the removal of any potential costs associated with debentures.

3.   CONDITIONS PRECEDENT TO THE SCHEME

     The scheme will be subject to the following conditions precedent:

     -     the approval of the scheme by the requisite majority of debenture holders, as contemplated in section
           115(2) of the Companies Act; and
           -      to the extent required, the approval of the implementation of such resolution by the Court as
                  contemplated in section 115(3)(a) of the Companies Act; and
           -      if applicable, the company not treating the aforesaid resolution as a nullity, as contemplated in
                  section115(5)(b) of the Companies Act;
     -     the requisite majority of debenture holders approving the relevant resolutions required to authorise:
           -      the delinking of each of the company’s ordinary shares from a debenture so as to no longer
                  constitute a combined unit;
           -      the amendment of the Hyprop Debenture Trust Deed; and
           -      the termination of the Debenture Trust Deed, without payment or other compensation to debenture
                  holders;
     -     the requisite majority of shareholders approving the relevant resolutions required to authorise:
           -      the delinking of each of the company’s ordinary shares from a debenture so as to no longer
                  constitute a combined unit;
           -      the amendment of Hyprop’s Memorandum of Incorporation; and
     -     all applicable regulatory and statutory approvals are obtained.

     The conditions precedent have been inserted in the company’s favour. Where such condition precedent is
     capable of being waived, the company may waive such resolution, in its sole discretion, at any time prior to the
     fulfilment thereof.

4.   SECTION 114 REPORT

     The board has appointed Mazars Corporate Finance Proprietary Limited (the “independent expert”) as
     independent expert (which meets the requirements set out in section 114(2) of the Companies Act) to advise it
     on the proposed scheme and to compile a report in terms of section 114 of the Companies Act to the
     independent board concerning the scheme.

     The independent expert has prepared a report to the board in compliance with section 114(3) of the Companies
     Act, which report confirms that the scheme is fair and reasonable to Hyprop’s debenture holders and is included
     in the circular.

5.   VIEWS OF THE BOARD

     None of the directors have any conflict of interests in relation to the scheme and all directors are able to make
     impartial decisions in relation to the scheme. Accordingly, all directors are considered to be “independent”
     (as defined under Regulation 81 of the Takeover Regulations).

     The board, having considered the terms and conditions of the scheme, is in favour of the scheme and the
     transactions and recommends that combined unitholders vote in favour of the resolutions set out in the notice of
     debenture holders’ scheme meeting and the notice of shareholders’ general meeting, to implement the scheme
     and the transactions.
     The directors of the company who hold combined units intend to vote in favour of the resolutions set out in the
     notice of debenture holders’ scheme meeting and the notice of shareholders’ general meeting, to implement the
     scheme and the transactions.

6.   SALIENT DATES AND TIMES

     The salient dates and times relating to the transactions are set out below.

                                                                                                              2014
     Record date in order to receive circular (together with the notices convening the
     debenture holders’ scheme meeting and the shareholders’ general meeting)                       Friday, 30 May
     Circular (together with the notices convening the debenture holders’ scheme meeting
     and the shareholders’ general meeting) posted on                                               Friday, 6 June
     Announcement relating to the issue of the circular (together with notices convening the
     debenture holders’ scheme meeting and the shareholders’ general meeting) released on
     SENS on                                                                                        Friday, 6 June
     Announcement relating to the issue of the circular (together with the notices convening
     the debenture holders’ scheme meeting and the shareholders’ general meeting)
     published in the press on                                                                      Monday, 9 June
     Last day to trade in order to be eligible to vote at the debenture holders’ scheme
     meeting and the shareholders’ general meeting                                                 Friday, 27 June
     Voting record date                                                                             Friday, 4 July
     Last day to lodge forms of proxy for the debenture holders’ scheme meeting (by 10:00)         Friday, 11 July
     Last day to lodge forms of proxy for the shareholders’ general meeting (by 10:30)             Friday, 11 July
     Debenture holders’ scheme meeting held at 10:00 on                                           Tuesday, 15 July
     Shareholders’ general meeting held at the later of 10:30 or 10 minutes after the
     completion of the debenture holders’ scheme meeting on                                       Tuesday, 15 July
     Results of the debenture holders’ scheme meeting and the shareholders’ general
     meeting released on SENS on                                                                  Tuesday, 15 July
     Special resolutions submitted to CIPC for filing on                                        Wednesday, 16 July
     Results of the debenture holders’ scheme meeting and the shareholders’ general
     meeting published in the press on                                                          Wednesday, 16 July
     Last date on which debenture holders can make application to court in terms of section
     115(3)(a) of the Companies Act if the scheme is approved by debenture holders at the
     debenture holders’ scheme meeting but with sufficient opposing votes that debenture
     holders may require the company to obtain court approval for the scheme as
     contemplated in section 115(3)(a)                                                          Wednesday, 23 July
    
     If no debenture holders exercise their rights in terms of section 115(3)(a) of the
     Companies Act
    
     Special resolutions expected to be registered by CIPC on                                   Wednesday, 30 July
     Finalisation date expected to be on                                                          Friday, 1 August
     Finalisation date announcement expected to be released on SENS on                            Friday, 1 August
     Finalisation date announcement expected to be published in the press on                      Monday, 4 August
     Expected last day to trade in existing combined units on the JSE prior to the delinking
     of the combined units and the capitalisation of the debentures on                            Friday, 8 August
     Trading in delinked ordinary shares of no par value under the new ISIN:
     ZAE000190724 and the existing code of “HYP” commences on                                    Monday, 11 August
     Expected suspension of listing of combined units on the JSE                                 Monday, 11 August
     Expected scheme implementation record date for the delinking of the combined units          Friday, 15 August
     and the capitalisation of the debentures at the close of business on
     Expected scheme operative date                                                              Monday, 18 August
     Expected date dematerialised shareholders will have their accounts updated at their
     CSDP or broker on                                                                           Monday, 18 August
     Expected date of issue of new replacement share certificates provided that the old
     combined unit certificates have been surrendered by 12:00 on Friday, 15 August 2014
     (any certificated combined units surrendered after this date will be replaced within 
     5 business days after receipt by the transfer secretaries)                                  Monday, 18 August
     Expected termination of listing of combined units (at the commencement of trade)            Monday, 18 August

     Notes:
     1.     All dates and times may be changed by the company. Any change will be published on SENS and in the South African press.
     2.     Combined unitholders should note that as transactions in Hyprop combined units are settled in the electronic settlement system
            used by Strate, settlement of trades takes place 5 business days after such trade. Therefore, unitholders who acquire Hyprop
            combined units after Friday, 27 June 2014 will not be eligible to vote at the debenture holders’ scheme meeting or the
            shareholders’ general meeting.
     3.     All times given are local times in South Africa.
     4.     If the debenture holders’ scheme meeting and/or the shareholders’ general meeting are adjourned or postponed, forms of proxy
            submitted for the initial debenture holders’ scheme meeting and/or shareholders’ general meeting, as the case may be, will
            remain valid in respect of any adjournment or postponement of the debenture holders’ scheme meeting and/or the shareholders’
            general meeting, as the case may be.
     5.     No dematerialisation of combined unit certificates may take place after Friday, 8 August 2014.

6 June 2014


Corporate advisor, legal advisor and sponsor                                            
Java Capital     

Independent expert
Mazars                                  

Date: 06/06/2014 03:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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