Wrap Text
Rebosis/Ascension Joint ann of firm intention by Rebosis to acq 100% of the issued linked unit capital of Ascension
REBOSIS PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2010/003468/06)
JSE share code: REB ISIN: ZAE000156147
(Approved as a REIT by the JSE)
(“Rebosis”)
ASCENSION PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/026141/06)
JSE share code for A-linked units: AIA
ISIN: ZAE000161881
JSE share code for B-linked units: AIB
ISIN: ZAE000161899
(Approved as a REIT by the JSE)
(“Ascension”)
JOINT ANNOUNCEMENT OF A FIRM INTENTION BY REBOSIS TO MAKE AN OFFER TO ACQUIRE 100% OF THE ISSUED LINKED UNIT CAPITAL OF ASCENSION
THAT IT DOES NOT ALREADY OWN BY WAY OF SCHEMES OF ARRANGEMENT
1. Introduction and rationale
Pursuant to the terms of the cooperation agreement entered into between Rebosis and Ascension dated
3 February 2014 (and announced on that date) and the subsequent implementation agreement entered into
between Rebosis and Ascension dated 23 February 2015 (the “implementation agreement”), Rebosis has
notified the Ascension board of Rebosis’ firm intention to make an offer to acquire the entire B linked unit
capital of Ascension that Rebosis does not already own (the “B offer”) and to make a comparable offer to
acquire the entire A linked unit capital of Ascension that Rebosis does not already own (the “A offer”) by way
of -
1.1. a scheme of arrangement (“B scheme”) in terms of section 114 of the Companies Act, 71 of 2008 (the
“Companies Act”), to be proposed by the board of directors of Ascension (“Ascension board”)
between Ascension and the holders of Ascension B linked units (“Ascension B linked unitholders”);
and
1.2. a scheme of arrangement (“A scheme”) in terms of section 114 of the Companies Act, to be proposed
by the Ascension board between Ascension and the holders of Ascension A linked units (“Ascension A
linked unitholders”).
Rebosis foresees market conditions in which REITs with a smaller market capitalisation and less liquidity in the
trade of their shares are driven to consolidation and corporate activity in order to best serve the interests of their
investors and tenants.
Both Rebosis and Ascension share an objective of preserving black management and ownership credentials in
order to continue to be positioned and enhance their offering of office accommodation to government and other
empowerment sensitive tenants on a basis that best advances the interests of their investors.
Rebosis and Ascension are of the view that the proposed acquisition by Rebosis of the Ascension linked units
that Rebosis does not already own, through the implementation of the B scheme and the A scheme, best
advances the interests of their investors.
2. Offer consideration
The consideration to be offered by Rebosis in terms of the B offer and the A offer to be made by Rebosis to the
remaining Ascension B linked unitholders and Ascension A linked unitholders, respectively (collectively “the
offers”) will be as follows -
2.1. Consideration for Ascension B linked units
In terms of the B scheme, if implemented, the Ascension B linked units held by Ascension B linked
unitholders will be exchanged for ordinary shares in Rebosis (the “Rebosis ordinary consideration
shares”) on a swap ratio of 23.54900 Rebosis ordinary consideration shares for every 100 Ascension B
linked units held.
2.2. Consideration for Ascension A linked units
2.2.1. In terms of the A scheme, if implemented, the Ascension A linked units held by
Ascension linked unitholders will be exchanged for newly created A ordinary shares in
Rebosis (“Rebosis A ordinary consideration shares”) on a swap ratio of 19.34236
Rebosis A ordinary consideration shares for every 100 Ascension A linked units held.
2.2.2. In accordance with the terms of the Rebosis A ordinary consideration shares, upon the
declaration of a distribution by Rebosis to its shareholders, no such distribution shall be
paid to Rebosis ordinary shareholders unless the Rebosis A ordinary consideration shares
have been paid their distribution which shall be in the same amounts as Ascension linked
units’ entitlement to fixed income distributions. In addition, the rights of Rebosis A
ordinary consideration shares in relation to voting and liquidation proceeds will
effectively mirror those attaching to Ascension A linked units save that –
2.2.2.1. for every 5.17 Ascension A linked units, an Ascension A linked unitholder
will instead hold 1 Rebosis A ordinary consideration share with an
entitlement to preferred income distributions, as referred to above;
2.2.2.2. the voting rights attaching to the Rebosis A ordinary consideration shares
will be not more than 25% of the total voting rights applicable to Rebosis
linked unitholders collectively (that is holders of Rebosis A ordinary
consideration shares and Rebosis ordinary shares);
2.2.2.3. no further Rebosis A ordinary consideration shares will be created or issued.
3. Clean-out Distributions and distribution periods for the Rebosis A ordinary consideration shares
3.1. In anticipation of implementation of the schemes, Rebosis will declare a special distribution to its
shareholders or linked unit holders of its distributable income and Ascension will declare a special
distribution to the holders of Ascension A and B linked units of its distributable income, on the basis
that the record date for participation in such distributions shall be the last Friday of the calendar month
immediately preceding the record date for participation in the schemes.
3.2. Going forward, the distribution periods for the Rebosis A ordinary consideration shares will be end
February, in respect of the interim income distribution, and end August, in respect of the final income
distribution, in line with the distribution periods for Rebosis ordinary shares.
4. Ascension board undertakings
Under the terms of the implementation agreement, among other things -
4.1. Ascension has agreed to propose the A scheme and the B scheme to the Ascension A and B linked
unitholders, respectively.
4.2. Rebosis has received undertakings from Ascension that between the date of the offers and
implementation of the relevant scheme:
4.2.1. Ascension will continue to conduct its business in the ordinary and regular course;
4.2.2. Ascension will not take any action which is designed to be prejudicial to the successful
outcome of the offers;
4.2.3. save as publicly announced on SENS up to the date of the implementation of the offers or
save as may be agreed to by Rebosis in writing, Ascension will not make any acquisitions
or effect any disposals of any of its properties and/or the rental enterprises conducted
thereon;
4.2.4. other than as provided in paragraph 3 above, Ascension will not effect any distributions
other than in the ordinary, normal and regular course in accordance with its historic
distribution policy and practices.
4.3. Ascension has agreed that it shall not –
4.3.1. enter into or participate in any discussions or negotiations regarding a transaction which
would constitute a de facto change of control of Ascension or be reasonably considered to
be likely to preclude the schemes or the implementation of the schemes (“alternative
proposal”);
4.3.2. participate in any discussions or negotiations regarding an alternative proposal (unless it
constitutes a superior proposal, being a firm intention to make an offer from a bona fide
third party which the Ascension board determines in good faith and through the exercise
of its fiduciary duties would, if consummated, result in a transaction more favourable to
the Ascension linked unitholders, (“superior proposal”);
4.3.3. agree to, approve or recommend an alternative proposal (unless it constitutes a superior
proposal);
4.3.4. enter into any agreement related to an alternative proposal (unless it constitutes a superior
proposal).
5. Conditions
Each of the B scheme and the A scheme (collectively the “schemes”) will be subject to the following
suspensive conditions:
5.1. the implementation of the conversion of Rebosis’ current linked unit capital structure to an all-share
capital structure and the creation of a new class of Rebosis A ordinary shares;
5.2. a sufficient increase in the authorised share capital of Rebosis in order for Rebosis to meet all of its
obligations arising in relation to the A scheme and the B scheme;
5.3. approval by the requisite majority of the Rebosis linked unitholders of the relevant resolutions required
to authorise the implementation of the offers as a “category 1 transaction” in terms of Rule 9.20 of the
Listings Requirements and the allotment, issue and procurement of the listing on the JSE of the Rebosis
ordinary consideration shares and the creation, allotment issue and procurement of the listing on the
JSE of the Rebosis A ordinary consideration shares in accordance with the memorandum of
incorporation of Rebosis;
5.4. in respect of the B scheme, approval by the requisite majority/ies of Ascension B linked unitholders, as
contemplated in section 115 of the Companies Act and, if required, the approval of the implementation
of the relevant special resolution(s) by the High Court;
5.5. in respect of the A scheme, approval by the requisite majority/ies of Ascension A linked unitholders, as
contemplated in section 115 of the Companies Act and, if required, the approval of the implementation
of the relevant special resolution(s) by the High Court;
5.6. that appraisal rights (in terms of section 164 of the Companies Act) are not validly exercised by:
5.6.1. in respect of the B scheme, any Ascension B shareholders;
5.6.2. in respect of the A scheme, any Ascension A shareholders;
as the case may be, provided that in the event that:
5.6.3. in respect of the B scheme, any Ascension B shareholders; or
5.6.4. in respect of the A scheme, any Ascension A shareholders,
as the case may be, exercise appraisal rights in terms of section 164 of the Companies Act, Rebosis will
still be entitled to proceed with the relevant scheme if it waives this condition;
5.7. all applicable regulatory and statutory approvals are obtained including, approval by the Competition
Authorities;
5.8. if required in terms of any debt funding agreement entered into by Ascension, the consent of the lender
in terms of such agreement to the acquisition of Ascension by Rebosis;
5.9. prior to the offers and the schemes becoming unconditional, there shall not have arisen or occurred (or
might reasonably be expected to arise or incur) a material adverse event which could reasonably be
expected to be adverse with regard to the operations, continued existence, business, condition, assets
and liabilities of any of Ascension and/or Ascension Asset Managers.
Additionally, the A scheme is conditional upon the implementation of the B scheme. The B scheme is however
not conditional upon the implementation of the A scheme. If the schemes are implemented, the Ascension B
linked units and the Ascension A linked units will be delisted from the JSE. If only the B scheme is
implemented, the Ascension A linked units will remain listed on the JSE and the Ascension B linked units,
wholly owned by Rebosis, may remain listed on the JSE.
All conditions, other than those that are regulatory in nature and not capable of being waived, may be waived by
Rebosis.
6. Pro forma earnings and net asset value effects pertaining to the schemes
6.1. Financial effects for Rebosis linked unitholders
In terms of the JSE Listings Requirements, a category 1 transaction requires a pro forma statement of
financial position of Rebosis showing the effects of the offers. Accordingly, the table below sets out the
pro forma financial effects of the offers on a Rebosis linked unitholder based on the annual results of
Rebosis for the year to 31 August 2014 assuming that the offers had been implemented on 31 August
2014 for purposes of the statement of financial position.
Before the After the % change
schemes¹ schemes²
NAV per share/linked unit (cpu) 1200 1278 6.5%
NTAV per share/linked unit (cpu) 1137 1088 (4.3)%
Notes and assumptions:
1. The financial information in the “Before the schemes” column has been prepared based on the
annual results for Rebosis for the year to 31 August 2014, as extracted from Rebosis’ audited
results for the 12 months ended 31 August 2014.
2. The financial information in the “After the schemes” column assumes –
a. Rebosis acquires 100% of the Ascension A linked units and 100% of the Ascension B linked
units it does not already own; and
b. as a stepped acquisition, the consolidation of Ascension under IFRS 3 with the resultant
recognition of goodwill for the difference in the aggregate consideration paid by Rebosis and
the Ascension net asset value as at 30 June 2014.
6.2. Financial effects for Ascension B linked unitholders
In terms of Regulation 101(7)(b)(iv) of the Companies Act’s Regulations, a firm intention
announcement must contain, inter alia, the pro forma earnings and asset value per offeree regulated
company security if the offer consideration consists wholly or partly of offeror securities.
The pro forma financial effects of the offers for Ascension B linked unitholders, as set out below, are
provided for illustrative purposes only to provide information about how the offers may have affected
the financial performance and position of Ascension, and because of their nature, may not fairly
represent the financial performance and position of Ascension after the offers.
The table below sets out the pro forma financial effects of the offers on an Ascension B linked
unitholder based on the annual results of Ascension for the year to 30 June 2014 assuming that the
offers had been implemented on 1 September 2013 for purposes of the statement of comprehensive
income and 31 August 2014 for purposes of the statement of financial position.
Ascension B linked unitholder pro Before the After the % change
forma earnings and net asset value: schemes¹ schemes²
NAV per B linked unit (cpu) 242 301 24.5%
NTAV per B linked unit (cpu) 242 256 6.0%
Earnings per share (cpu) 31.31 28.35 (9.4)%
Earnings per linked unit (cpu) 53.90 60.73 12.7%
Distribution per linked unit 22.59 24.63 9.0%
Notes and assumptions:
1. The financial information in the “Before the schemes” column has been prepared based on the
annual results for Ascension for the year to 30 June 2014, as extracted from Ascension’s audited
results for the 12 months ended 30 June 2014.
2. The financial information in the “After the schemes” column has been prepared by dividing
Rebosis’ financial effects pursuant to the offers (for the year ended 31 August 2014) by the swop
ratio of 4.25 (a swap ratio of 23.54900 Rebosis ordinary consideration shares for every 100
Ascension B linked units held) to provide the pro forma financial effects for Ascension B linked
unitholders.
3. The financial information in the “After the schemes” column assumes –
a. Rebosis acquires 100% of the Ascension A linked units and 100% of the Ascension B linked
units it does not already own; and
b. as a stepped acquisition, the consolidation of Ascension under IFRS 3 with the resultant
recognition of goodwill for the difference in the aggregate consideration paid by Rebosis and
the Ascension net asset value as at 30 June 2014.
6.3. Financial effects for Ascension A linked unitholders
As the Ascension A linked unitholders will, in terms of the scheme, exchange their Ascension A linked
units for Rebosis A ordinary consideration shares that will effectively mirror the economics of the
Ascension A linked units (as referred to in paragraph 2.2.2) there will be no financial effect on
Ascension A linked unitholders who elect to receive the Rebosis A consideration shares. In addition,
the cash-cover ratio applicable to the Rebosis A ordinary consideration shares will be significantly
higher than the cash-cover ratio applicable to Ascension A linked units.
7. Forecast financial information of Ascension
Set out below are the forecast revenue, net property income, net operating profit and distributable earnings of
Ascension (“the forecasts”) for the one month ending 30 June 2015 and the year ending 30 June 2016
(“the forecast periods”). The forecasts have been prepared on the assumption that the offers will be
implemented on 1 June 2015 and on the basis that the forecasts include forecast results for the duration of the
forecast periods.
The forecasts, including the assumptions on which they are based and the financial information from which they
are prepared, are the responsibility of the directors of Rebosis. The forecasts have not been reviewed or reported
on by independent reporting accountants.
The forecasts presented in the table below have been prepared in accordance with Rebosis’ accounting policies
and in compliance with IFRS.
Forecast for the Forecast for the
one month ending year ending
30 June 2015 30 June 2016
R’000 R’000
Contractual rental income 43 920 565 809
Straight-line rental income accrual 2 609 21 979
Revenue 46 529 587 788
Net property income* 32 545 402 428
Net operating profit# 30 681 379 666
Total comprehensive profit for the period^ 2 609 21 979
Distributable earnings 18 639 239 733
* Includes the effects of straight-lining rental income
# Includes the effects of asset management fees
^ Includes the effects of finance costs and debenture interest
The forecasts incorporate the following material assumptions in respect of revenue and expenses that can be
influenced by the directors of Rebosis:
- Rebosis management’s forecasts for the month ending 30 June 2015 and the year ending 30 June 2016
are based on information derived from the property manager and historical information;
- Rebosis will not acquire or dispose of any properties during the forecast periods;
- contracted revenue is based on existing lease agreements, whilst uncontracted revenue amounts to 29.9%
for the month ending 30 June 2015 and 45.4% for the year ending 30 June 2016;
- all existing lease agreements are valid;
- turnover rental (rental income based on the actual turnover of the tenant) has not been forecast;
- current vacant space has been forecast on a property-by-property basis and has been assumed to remain
vacant for the duration of the forecast period;
- leases expiring during the forecast periods have been forecast on a lease-by-lease basis, and have been
assumed to renew unless the lessee has indicated its intention to terminate the lease;
- property operating expenditure has been determined based on their review of historical expenditure and
discussion with the property manager; and
- no fair value adjustments to investment properties, other than the adjustment as a result of amortised lease
escalations, have been provided for.
The forecasts incorporate the following material assumptions in respect of revenue and expenses that cannot be
influenced by the directors of Rebosis:
- there will be no unforeseen economic factors that will affect the lessees’ abilities to meet their
commitments in terms of existing lease agreements;
- consumption-based recoveries are consistent with the independent property valuers’ property income
statements; and
- an effective date of implementation of the offers of 1 June 2015.
Electricity is the only item of expenditure which is forecast to increase by greater than 15% from historical
costs.
Material items of expenditure incurred are in respect of rates expense and electricity expense.
The property known as Grand Central is the only material property, being a property constituting 15% or more
of the value or revenue of the property portfolio.
8. Property specific information
The property specific information required in terms of the JSE Listings Requirements in relation to each of the
properties comprising Ascension’s property portfolio, is set out below.
Weighted
Building Average
Property Registered legal rentable Rental Valuation as at 31
Property Physical description description and Freehold/ area Per m2 December 2014
Name Address and use region Leasehold (GLA) (R) (R ’000)
1. Bathopele Cnr Loveday Office Erf 4412 Freehold 11 500 86.3 138 000
Building and Market Johannesburg,
Streets, Gauteng
Johannesburg
2. Spectrum Cnr Office Erf 11123 Bellville Freehold 7 550 96.8 92 000
Voortrekker and Cape Town
Blanckenberg
Streets,
Bellville
3. Schreiner 94 Pritchard Office Erf 5243 Freehold 18 815 85.8 163 000
Chambers Street, Johannesburg,
Johannesburg Gauteng
4. Mishumo De Korte and Office Erf 2975, 2976, 2978, Freehold 6 154 86.3 72 000
House De Beer Streets, & Portion 1 of 2977,
Braamfontein RE of Erf 2977,
Johannesburg,
Gauteng
5. Sigma 7 Blanckenberg Office Erf 11135 Erf 11136, Freehold 3 751 86.3 48 000
Road, Bellville, Bellville, Cape Town
Cape Town
6. 45 Castle 45 Castle Street, Office Erf 7243, Cape Town Freehold 9 537 116.15 148 500
Street Cape Town
7. Bergstan Cnr Castle and Office Erf 169833, Cape Freehold 2 838 83.15 29 300
House Loop Streets, Town
Cape Town
8. Matrix Cnr Strand and Office Erf 1239, Cape Town, Freehold 9 001 DP# 76 000
House Bree Streets,
Cape Town
9. Nedbank Cnr Strand and Office Erf 9451, Cape Town Freehold 6 332 DP# 40 000
Centre Loop Streets,
Cape Town
10. NBC 76 Juta Street, Office Erf 4644, Freehold 10 000 86.3 133 500
Braamfontein Johannesburg
11. PROROM Cnr Brown and Office Erf 1433, Nelspruit Freehold 7 038 DP# 69 000
Paul Kruger Township
Streets,
Nelspruit
Mpumalanga
12. 90& 92 90 Market Office Erven 193 and 194, Freehold 2 000 - 7 000
Market Street, Johannesburg
Street Johannesburg
Central
13. VWL Corner Office/Reta Portion 1 of Erf 2961, Freehold 17 989 86.3 167 000
Vermeulen & il Pretoria Township
Paul Kruger
Streets,
Nelspruit
14. 14 Long 14 Long Street, Office Erf 4483 Freehold 10 245 94.97 126 000
Street Cape Town
15. 373 373 Pretorius Office Erf 3255 Pretoria Freehold 13 340 86.3 203 000
Pretorius Street, Pretoria,
Street Gauteng
16. Meyersdal 65 Phillip Office Erf 2259, Meyersdal Freehold 4 840 86.1 44 000
Engelbrecht Ext 12
Street,
Weighted
Building Average
Property Registered legal rentable Rental Valuation as at 31
Property Physical description description and Freehold/ area Per m2 December 2014
Name Address and use region Leasehold (GLA) (R) (R ’000)
Meyersdal
17. Infinity 4 Robin Close Office Erf 84, Meyersdal Freehold 12 012 118.21 217 000
Office Meyersdal Nature Estate Ext 6
Park, Nature Estate, and Erf 2054,
Meyersdal Meyersdal Meyersdale Nature
Estate Ext 17
18. 238 Roan Corporate Industrial Erf 342, Randjespark Freehold 9 040 86.3 111 500
Crescent, Landing, 238 Ext 100
Midrand Roan Crescent,
Ranjespark
19. Grand Cnr Darling and Office and Erven 4648, 4649 and Freehold 33 424 106.43 549 000
Central Plein Streets, retail 4650, Cape Town
Cape Town
20. Medscheme 37 Conrad Office Erf 330, Florida Noord Freehold 6 792 86.3 91 000
Drive, Florida Ext 7
Noord,
Roodepoort
21. Kingfisher King Fisher Office Erf 2175, Meyersdale Freehold 1 445 99.6 22 600
Crescent, Crescent, Ext 19 (now SS Fish
Meyersdal Meyersdal Eagle Office Park
Phase 2, Units 1-12)
22. 174 Visagie 174 Visagie Office Erf 2901, Pretoria, Freehold 13 376 86.3 164 000
Street Street, Pretoria Gauteng
23. Island 24 Cumberland Industrial Erf 17960, Cape Town Freehold 23 358 31.65 72 000
Centre Road, Paarden
Eiland, Cape
Town
24. Riverpark 1 Madiba Street, Motor retail Portion 5 and 6 of Erf Freehold 8 843 127.18 147 000
and 2 and Nelspruit park and 40, Riverside Park
Riverview Office Extension 6,
1 and 2 Mphumalanga
25. Atterbury Shell House and Office Unit 1 SS Shell House Freehold 26 240 113.06 324 000
House Ovenstone and Ovenstone House
House, 2 747/2006
Waterkant
Street, Cape
Town
26. Surrey Cnr Rissik and Office Erf 1263, Freehold 11 738 181 000
House Fox Streets, Marshalltown
Johannesburg
27. Game Cnr Joubert and Office Erven 676 and 4677, Freehold 21 562 80.02 189 000
Building Pritchard Johannesburg
Streets,
Johannesburg
28. Swiss 86 Main Street Office Erf 1121 Freehold 7 807 80.68 97 000
House Marshalltown Marshalltown
DP# Development property
Independent valuations were carried out on each of the properties as at 31 December 2014 by Peter Parfitt of
Quadrant Properties (Pty) Ltd, a registered professional valuer in terms of the Property Valuers Profession Act,
No. 47 of 2000.
The value of the net assets of Ascension is R2 261 400 000, being the valuations referred to above (of in
aggregate R3 721 400 000) less Ascension’s interest bearing liabilities of R1 460 000 000 as at 31 December
2014.
9. Ascension unitholder support
No Ascension A linked unitholder or Ascension B linked unitholder has given any undertaking to vote in favour
of the respective schemes.
10. Independent expert
The Ascension board has appointed Mazars Corporate Finance Proprietary Limited to act as independent expert
to review the terms of the schemes and to provide a fair and reasonable opinion as required under section 114(3)
of the Companies Act and Regulation 90 of the Companies Act’s Regulations.
11. Confirmation to the TRP
In accordance with the Companies Act’s Regulations, Rebosis has confirmed with the Takeover Regulation
Panel (“TRP”) that, upon completion of the Rebosis capital conversion and the creation of the Rebosis A
ordinary consideration shares, contemplated in paragraph 15 below, it will have a sufficient number of
authorised and unissued A shares and ordinary shares in order to satisfy each of the offers.
12. Unitholding of Rebosis in Ascension
Rebosis currently holds:
12.1. 28 001 628 Ascension A linked units, comprising approximately 9.1% of Ascension A linked units in
issue; and
12.2. 191 939 001 Ascension B linked units, comprising approximately 51.0% of Ascension B linked units in
issue.
13. No concert party arrangements
Rebosis is not acting in concert with any other person in relation to either of the offers.
14. Documentation and timing in regard to the schemes
Full details of the schemes will be set out in joint circulars which will be distributed by Rebosis and Ascension
to each of the Ascension A linked unitholders and Ascension B linked unitholders within 20 business days after
the date of this firm intention announcement and each of which will include the opinion of the independent
expert referred to in paragraph 7 above, notices of general meetings of Ascension A linked unitholders and
Ascension B linked unitholders, respectively, to approve the schemes and the salient dates and times applicable
to the schemes.
15. Approvals required by Rebosis and documentation
The acquisition by Rebosis of 100% of the issued linked units of Ascension that Rebosis does not already own
will constitute a category one acquisition for Rebosis in terms of the JSE’s Listings Requirements, requiring the
approval of Rebosis’ linked unitholders by way of a resolution passed at a general meeting. A circular in this
regard containing a notice of general meeting is expected to be posted to Rebosis unitholders by end April 2015
(“category 1 circular”).
The category 1 circular will also include proposals regarding proposed amendments to the asset management
agreement entered into between Rebosis and its asset manager, Billion Asset Managers (Pty) Limited (“Billion
Asset Managers”), dated 28 March 2011 (the “asset management agreement”). The proposed amendments to the
asset management agreement include –
- the monthly asset management fee payable under the asset management agreement by Rebosis to
Billion Asset Managers be amended from 1/12 of 0,3% of the aggregate of the market capitalisation
and the borrowings of Rebosis (“Rebosis EV”) to –
o 1/12 of 0,4% in respect of the first R10 billion of Rebosis EV;
o 1/12 of 0,3% of Rebosis EV in excess of R10 billion;
- either party is entitled to terminate the agreement by giving three years’ written notice provided that
such notice may only be given to the party on or after 28 March 2020 (instead of 28 March 2015, as
currently provided);
- in the event of a termination event, as defined in the asset management agreement, Rebosis shall pay
to Billion Asset Managers the net present value of the specified management fee (which management
fee shall be calculated with reference to 0,3% of Rebosis EV and not the actual management fee paid,
as currently provided) for the twelve months preceding the termination event for the agreed
termination period, being a period of three years from the date of termination; provided that if the right
to terminate is exercised within nine years (and not four years, as currently provided) after the
signature date of the asset management agreement, the agreed termination period shall be three years
plus the remaining period of the first nine years (and not four years, as currently provided) of the asset
management agreement.
The –
- increase in the asset management fee is being proposed to ensure the financial sustainability of the
operations of Billion Asset Managers;
- five year extension to the fixed period of the asset management agreement (the “five year extension”)
is being proposed so that the asset management agreement may then be terminated on three years notice
which may only be given after the expiry of a five year fixed period. If this five year extension is not
approved, the asset management agreement may be terminated on three years notice which may be
given on or after 28 March 2015 in which event the asset management agreement would terminate three
years thereafter (on 28 March 2018 if notice is given on 28 March 2015). A five year extension to the
minimum commitment period of Billion Asset Managers ensures continuity of asset management
services for an appropriate period for leases with Government-aligned tenants;
- period in which the net present value of the specified management fee is payable upon a termination
event, as defined in the asset management agreement, is being proposed to be extended to marry that
period with the five year extension, referred to above.
In addition, in order to proceed with the A scheme, it will also be necessary for Rebosis to adopt the resolutions
necessary to create the Rebosis A ordinary consideration shares. The creation of the Rebosis A ordinary
consideration shares will form the subject matter of a separate circular from that of the category 1 circular,
which circular will include the conversion of Rebosis’ capital structure from a linked unit structure to a share-
only structure. It is intended to effect this conversion by way of a scheme of arrangement in terms of section
114 of the Companies Act between Rebosis and its linked unitholders.
A circular in this regard containing a notice of general meeting is expected to be posted to Rebosis unitholders
by end March 2015.
16. Responsibility statements
The Ascension board, all of whom are independent, accepts responsibility for the information contained in this
announcement insofar as it relates to Ascension. To the best of its knowledge and belief, the information
contained in this announcement is true and this announcement does not omit anything likely to affect the import
of the information.
The Rebosis board accepts responsibility for the information contained in this announcement insofar as it relates
to Rebosis. To the best of its knowledge and belief, the information contained in this announcement is true and
the announcement does not omit anything likely to affect the import of the information.
24 February 2015
Corporate advisor and sponsor to Rebosis and Ascension
Java Capital
Legal Adviser to the transaction
Cliffe Dekker Hofmeyr Inc
Date: 24/02/2015 08:47:00 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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