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Posting of circular, notices of general meetings and important dates and times
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
Share code: DLT ISIN: ZAE000172052
("Delta" or “the Company”)
REIT status approved
POSTING OF CIRCULAR, NOTICES OF GENERAL MEETINGS AND IMPORTANT
DATES AND TIMES
1. Introduction
Delta linked unitholders are advised that the Company has on
Wednesday, 27 August 2014 posted a circular (“the Circular”)
relating to the conversion the Company’s current linked unit
capital structure to an ordinary share structure, which will be
implemented by:
- the delinking of each Delta ordinary share from a Delta
debenture so as to no longer constitute a Delta linked
unit;
- the cancellation of each Delta debenture for no
consideration;
- the capitalisation of the issue price of each Delta
debenture to the stated capital attributable to the
ordinary shares issued by the Company from an accounting
perspective for purposes of financial reporting in
accordance with International Financial Reporting
Standards (“IFRS”) and the increase of the contributed tax
capital of Delta attributable to the ordinary shares
issued by Delta by the issue price of each cancelled
debenture, as contemplated in section 25BB(8) of the
Income Tax Act 58 of 1962; and
- termination of the Delta debenture trust deed, without
payment or other compensation to Delta debenture holders,
(collectively, “the Transaction”)
to be effected by way of a scheme of arrangement in terms of
section 114(1) (c) of the Companies Act 71 of 2008 (“the
Companies Act”) (“the Scheme”). The Scheme is being proposed
by the board of Delta (“the Board”) between the Company and
the Delta linked unitholders and shall, subject to the passing
of the relevant resolutions at the general meeting of Delta
linked unitholders and the general meeting of Delta
shareholders (collectively, “the General Meetings”), be
binding on all Delta linked unitholders.
The general meeting of Delta debenture holders will be held at
12h00 on Thursday, 2 October 2014 at the registered office of
Delta, for the purpose of considering and, if deemed fit,
passing, with or without modification the resolutions required
to approve the Transaction. A notice convening such general
meeting of Delta debenture holders is attached to and forms
part of the Circular.
The general meeting of Delta shareholders will be held at
12h30 on Thursday, 2 October 2014 at the registered office of
Delta, for the purpose of considering and, if deemed fit,
passing, with or without modification, the resolutions
required to approve the Transaction. A notice convening such
general meeting of Delta shareholders is attached to and forms
part of the Circular.
The Circular is available in electronic format on the website
of the Company at www.deltafund.co.za.
2. RATIONALE
In terms of the Listings Requirements of the JSE Limited (“the
Listings Requirements”) the total consolidated IFRS liabilities
of a REIT may not exceed 60% of its total consolidated IFRS
assets. As the Listings Requirements make use of the IFRS
definition of a liability a Company is required to include in
such calculation any debentures it has issued.
For the purposes of calculating the aforementioned gearing
ratio, the JSE has provisionally allowed all REITS to exclude
its debentures which form part of its linked unit capital
structure, including any debenture premium in the calculation
for the determination of such 60% threshold.
After 1 July 2015 the ratio of the Company’s total consolidated
liabilities to total consolidated assets must be based on the
total consolidated liabilities as reflected in the IFRS
financial statements and no separate adjustment may be made for
any debentures, even if they are part of the historic linked
unit structure.
By converting its capital structure, the Company will reduce
the ratio of its total consolidated liabilities (excluding
debentures, as these will no longer exist subsequent to the
passing of the requisite resolutions) to total consolidated
assets to 49% and will thereby ensure that the Company’s
consolidated liabilities remain below the aforementioned 60%
threshold requirement.
3. Conditions precedent
The Scheme will be subject to the following conditions
precedent:
- the requisite majority of Delta debenture holders and Delta
shareholders approving the relevant resolutions required to
authorise:
the Delta debenture trust deed amendment;
- the delinking of each Delta ordinary share from a Delta
debenture so as to no longer constitute a Delta linked
unit;
- the approval of the Scheme by the requisite majority of Delta
linked unitholders at the General Meetings, as contemplated
in section 115(2)(a) of the Companies Act; and
- to the extent required, the approval of the implementation
of such resolutions by the court as contemplated in
section 115(3)(a) of the Companies Act; and
- if applicable, the Company not treating the aforesaid
resolutions as a nullity, as contemplated in section
115(5)(b) of the Companies Act;
- the requisite majority of Delta shareholders approving the
relevant resolutions required to authorise the amendments to
the Company’s memorandum of incorporation; and
- all applicable regulatory and statutory approvals are
obtained.
4. Financial information
The issue price of each Delta debenture will be capitalised to
the Company’s stated capital account. The effect on Delta’s
statement of financial position is therefore limited to a
reclassification of the debenture balance to stated capital.
With regard to Delta’s statement of comprehensive income, the
Scheme will have the effect of reducing the amount disclosed as
interest paid. An amount equivalent to the reduction in
interest paid will instead be reflected as a dividend paid to
Delta shareholders through the Company’s statement of changes
in equity.
5. Report of the independent expert
The Board has appointed Grant Thornton Advisory Services
Proprietary Limited (“Grant Thornton” or “the Independent
Expert”) as the independent expert, in accordance with section
114 (2) of the Companies Act, to provide an independent
professional expert’s opinion regarding the Scheme, and to make
appropriate recommendations to the Board in the form of a fair
and reasonable opinion.
The Independent Expert has considered the terms and conditions
of the Scheme and is of the opinion that the terms and
conditions are fair and reasonable to Delta debenture holders.
The full text of the report of the Independent Expert regarding
the Scheme, prepared in accordance with section 114 (3) of the
Companies Act is contained in the Circular.
6. 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 thereto. Accordingly all
directors are considered to be independent as defined under
Regulation 81 of the Takeover Regulations.
The Board, after due consideration of the terms and conditions
of the Scheme, is in favour of the Scheme and recommends that
Delta linked unitholders vote in favour of the resolutions set
out in the notice of the general meeting of Delta debenture
holders and the notice of the general meeting of Delta
shareholders, to implement the Transaction.
The directors of the Company who hold Delta linked units intend
to vote in favour of the resolutions required to give effect to
the Transaction.
7. Salient dates and times
The salient dates and times relating to the Transaction is set
out below.
2014
Record date in order to receive the Circular Friday, 15 August
Circular posted to Delta linked unitholders on Wednesday, 27 August
Announcement relating to the issue of the Circular Wednesday, 27 August
released on SENS on
Last day to trade in order to be eligible to vote at Thursday, 18 September
the General Meetings
Voting record date Friday, 26 September
Last day to lodge forms of proxy for the general Tuesday, 30 September
meeting of Delta shareholders by 12h30
Last day to lodge forms of proxy for the general Thursday, 2 October
meeting of Delta debenture holders by 12h00
General meeting of Delta debenture holders held at Thursday, 2 October
12h00 on
General meeting of Delta shareholders to be held at Thursday, 2 October
12h30 on
Results of the General Meetings released on SENS on Thursday, 2 October
Results of the General Meetings published in the press Friday, 3 October
on
Last date on which dissenting Delta linked unitholders Friday, 10 October
can make application to court in terms of section
115(3)(a) of the Companies Act if the Scheme is
approved by Delta linked unitholders at the General
Meetings, but with sufficient opposing votes that
Delta linked unitholders may require the Company to
obtain court approval for the Scheme as contemplated
in section 115(3)(a)
If no Delta linked unitholders exercise their rights
in terms of section 115(3)(a) of the Companies Act
Finalisation date expected to be on Friday, 21 November
Finalisation date announcement expected to be released Friday, 21 November
on SENS on
Finalisation date announcement expected to be Monday, 24 November
published in the press on
Expected last day to trade in existing Delta linked Friday, 28 November
units on the JSE prior to the delinking of the Delta
linked units and the capitalisation of the Delta
debentures on
Trading in delinked ordinary shares of no par value Monday, 1 December
under the new ISIN: ZAE000194049 and the existing
code of “DLT” commences on
Expected suspension of listing of linked units on the Monday, 1 December
JSE
Expected Scheme implementation record date for the Friday, 5 December
delinking of the linked units and the capitalisation
of the debentures at the close of business on
Expected Scheme operative date Monday, 8 December
Expected date dematerialised shareholders will have Monday, 8 December
their accounts updated at their
CSDP or broker on
Expected date of issue of new replacement share Monday, 8 December
certificates provided that the old linked unit
certificates have been surrendered by 12h00 on Friday,
5 December 2014 (any certificated linked units
surrendered after this date will be replaced within
five business days after receipt by the transfer
secretaries)
Expected termination of listing of Delta linked units Monday, 8 December
(at the commencement of trade) on
Notes:
1. All dates and times indicated in this Circular are South African dates and times.
2. All dates and times indicated in this Circular are subject to change by Delta. Any change
will be released on SENS.
3. Delta linked unitholders should note that as trade in Delta linked units are settled in the
electronic settlement system used by Strate, settlement of trades takes place five business
days after such trade. Therefore, Delta linked unitholders who acquire Delta linked units
after Thursday, 18 September 2014 will not be eligible to vote at the general meeting of
Delta debenture holders or the general meeting of Delta shareholders.
4. If the general meeting of Delta debenture holders and/or the general meeting of Delta
shareholders are adjourned or postponed, forms of proxy submitted for the initial general
meeting of Delta debenture holders and/or general meeting of Delta shareholders, as the
case may be, will remain valid in respect of any adjournment or postponement of the general
meeting of Delta debenture holders and/or the general meeting of Delta shareholders.
5. No dematerialisation of Delta linked units may take place after Friday, 28 November 2014.
27 August 2014
Johannesburg
Investment bank and sponsor
Nedbank Capital
Independent expert
Grant Thornton
Date: 27/08/2014 02:35:00 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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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