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Acquisition of a portfolio of retail letting enterprises and properties and cautionary announcement
DIPULA INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/013963/06)
JSE share code: DIA ISIN: ZAE000158317
JSE share code: DIB ISIN: ZAE000158325
(Approved as a REIT by the JSE)
(“Dipula” or the “company”)
ACQUISITION OF A PORTFOLIO OF RETAIL LETTING ENTERPRISES AND PROPERTIES AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Linked unitholders are advised that Mergence Africa Property Investment Trust (the “purchaser” or
“Mergence”) and Dipula, being the sole capital and income beneficiary of Mergence, have concluded
an agreement (the “agreement”) with Redefine Properties Limited (“Redefine” or the “seller”) for the
acquisition of the rental enterprises conducted in respect of and including certain properties and
buildings of the seller, further details of which are set out below (collectively, the “property
portfolio”) (the “acquisition”).
2. RATIONALE
The acquisition will give Dipula access to the dense Soweto and Hamaanskraal markets and is in line
with Dipula’s strategy of acquiring portfolio enhancing retail assets in under serviced areas.
3. DETAILS OF THE PROPERTY PORTFOLIO
Details of the properties in the property portfolio, including property name, geographical location,
sector, gross lettable area (“GLA”), weighted average rental per square metre and the purchase
considerations attributed to the properties, are as follows:
Geographical Weighted average Purchase
Property name location Sector GLA (m2) rental per m2 consideration
Meadowpoint
1 Shopping Centre Gauteng Retail 4 558 103.29 R54 796 620
Proteapoint
2 Shopping Centre Gauteng Retail 3 876 105.07 R37 115 096
Dobsonpoint
3 Shopping Centre Gauteng, Retail 3 501 103.87 R39 724 331
4 Pimville Square Gauteng, Retail 4 290 76.51 R35 984 313
Kudube
Hammanskraal
5. Centre North West Retail 11 286 87.21 R106 602 959
Kudube Kopanong
6 Centre North West Retail 10 739 141.20 R150 777 041
Total 38 250 106.42 R425 000 360
4. TERMS OF THE ACQUISITION
4.1. In terms of the agreement, Mergence will purchase the property portfolio from Redefine for a
purchase consideration of R425 000 000 (the “purchase consideration”).
4.2. The purchase consideration will be settled in the following manner:
4.2.1. 25% of the purchase consideration will be payable by way of cash (the “cash
consideration”); and
4.2.2. 75% of the purchase consideration will be payable by way of the issue of Dipula A
linked units and Dipula B linked units, in equal proportions (the “consideration
units”), calculated and issued at a 5% discount to the volume weighted average
traded price of a Dipula unit measured over 15 trading days ending on the last
trading day prior to the month during which Dipula A linked units and Dipula B
linked units (collectively, the “Dipula units”) start trading on the JSE ex their
entitlement to the ordinary income distribution in respect of the Dipula units in
respect of the six month period ending 31 August 2014 (the “ex date”) and
adjusted by deducting therefrom an amount equal to the ordinary income
distribution in respect of Dipula units in respect of the 6 month period ending 31
August 2014.
4.3. The purchase consideration will be paid to the seller on (i) the first day of the month following
the month during which the last of the conditions precedent is fulfilled or waived and (ii) the
month during which the ex date occurs (the “effective date”).
4.4. In respect of the cash consideration, by no later than 15 business days before the anticipated
effective date, the purchaser must provide the seller with a guarantee from a financial
institution acceptable to the seller for payment of the cash consideration on the effective date,
irrespective of whether registration and transfer of the properties comprising the property
portfolio will be effected on the effective date.
4.5. Dipula undertakes not to effect any special distributions or capital reductions or sub-divisions
of its securities or any capital restructure before the effective date.
4.6. To the extent that the effective date has not occurred by 1 January 2015 (the “escalation
date”), the purchase consideration will escalate at a rate of 0.65% per month, compounded
monthly in arrear (the “escalation rate”) from the escalation date up to and including the
effective date.
4.7. With effect from the effective date, subject to the purchaser having complied with all its
payment obligations under the agreement, ownership, occupation and possession of the
properties comprising the property portfolio will be given by the seller to the purchaser.
4.8. Transfer of each of the properties comprising the property portfolio will be effected by the
conveyancer as soon as practicable after the effective date provided that the purchaser has
effected payment of the full purchase consideration and paid all the costs of transfer.
4.9. The agreement provides for warranties and indemnities that are normal for an acquisition of
this nature.
5. CONDITIONS PRECEDENT
The agreement is subject to the fulfilment or waiver, as the case may be, of the following conditions
precedent:
5.1. by no later than five business days from the signature date (the “signature date”), Dipula
furnishing the seller with written notice of the securing of the approval of Dipula’s board of
directors and investment committee, to the conclusion and implementation of the agreement
and a resolution authorising Mr Izak Petersen to sign the agreement on behalf of Dipula;
5.2. by no later than five business days from the signature date, the seller furnishing the purchaser
with written notice of the securing of the approval of the seller’s board of directors, to the
conclusion and implementation of the agreement;
5.3. by no later than 15 business days from the signature date, the purchaser and Dipula furnishing
the seller with written proof of finance approval in respect of the cash consideration;
5.4. by no later than 45 business days from the signature date, Dipula adopting and furnishing the
seller with the following:
5.4.1. confirmation that it has the requisite Dipula unitholders’ approval to issue the
consideration units; and
5.4.2. such other resolutions as may be required under the memorandum of association
of Dipula;
5.5. by no later than five business days from the signature date the purchaser adopting and
furnishing the seller with the following:
5.5.1. a resolution approving the acquisition on the terms and conditions contained in the
agreement and authorising Mr Izak Petersen to sign the agreement on behalf of the
purchaser, and to the extent necessary, ratifying any actions taken to date;
5.5.2. such other resolutions as may be required under the trust deed of the purchaser;
5.6. by no later than 90 calendar days from the signature date, the seller, the purchaser and Dipula
obtaining all JSE and other regulatory approvals that may be required for the implementation
of the acquisition;
5.7. by no later than 120 calendar days from the signature date, the acquisition being
unconditionally approved by the Competition Authorities in terms of the Competition Act, No
89 of 1998, as evidenced by the issue of a merger and clearance certificate.
6. FINANCIAL EFFECTS, VALUATION AND CAUTIONARY
The financial effects of the acquisition are still in the process of being finalised and will, together with
valuation information, be published in due course. Linked unitholders are advised to exercise caution
when dealing in their linked units until the financial effects of the acquisition and valuation
information are announced.
7. CATEGORISATION
The acquisition is a category 2 transaction in terms of the JSE Listings Requirements and accordingly
does not require approval by linked unitholders.
21 August 2014
Sponsor
Java Capital
Date: 21/08/2014 05:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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