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AVENG LIMITED - Disposal of 70% of Avengs industrial property portfolio in a sale and leaseback transaction and cautionary

Release Date: 07/04/2015 16:30
Code(s): AEG     PDF:  
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Disposal of 70% of Aveng’s industrial property portfolio in a sale and leaseback transaction and cautionary

AVENG LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Group")



DISPOSAL OF 70% OF AVENG’S INDUSTRIAL PROPERTY PORTFOLIO IN A SALE AND LEASEBACK
TRANSACTION (the “Properties”) (“the Transaction”) AND CAUTIONARY ANNOUNCEMENT

INTRODUCTION AND RATIONALE
As previously communicated to shareholders, the Board has decided to diversify the Group’s funding
sources, extend the debt maturity profile, reduce overall borrowing levels and the cost thereof to
enable Aveng to concurrently pursue contract claims to a positive conclusion whilst taking advantage
of growth opportunities. Consequently, the Group embarked on a programme to dispose of non-
core assets with the objective of raising at least R2,5 billion. The assets to be disposed of comprised
properties and Electrix, the sale of which was concluded on 19 September 2014.

Aveng now wishes to advise shareholders that in terms of an offer accepted by Aveng on Thursday, 2
April 2015 (the “Offer”), Aveng has agreed to dispose of 70% of Dimopoint Proprietary Limited
(“Dimopoint”), a special purpose vehicle created for the purpose of holding the properties and which
is wholly owned by Aveng Africa Proprietary Limited (“Aveng Africa”), to Imbali Props 21 Proprietary
Limited (“Imbali 21”), an entity of the Collins Property Group (“Collins”) for approximately R1,127
billion to be settled in cash.

Due to the strategic nature of the investment, Aveng has elected to retain a 30% shareholding in
Dimopoint and will jointly administer the Properties with Collins for a market-related fee. The
Properties are currently tenanted by various entities within the Group, and Aveng Africa will sign a
head lease in respect of the Properties for periods of 5 and 12 years.

The effective date of the Transaction is expected to be when the last outstanding condition
precedent to the Transaction has been fulfilled or waived, which is expected to be by 30 June 2015.

DETAILS OF THE PROPERTIES

The Properties comprise 35 South African properties and excludes the property in Jet Park where
Aveng’s head office is located. Details of the Properties are available on the Aveng website at
www.aveng.co.za.

PURCHASER

Imbali 21 an entity of the Collins Property Group (“Collins”) is the Purchaser. Collins is a privately
owned property group, with a history spanning four generations over a period of more than 100
years and is predominantly a commercial property development and investment company that owns
and manages properties throughout Africa and the United Kingdom.

CONDITIONS PRECEDENT

The Transaction is subject to inter alia, the fulfilment or waiver of the following main suspensive
conditions:
-   the conclusion of transaction agreements, including inter alia, shareholders agreement,
    subscription agreement, lease agreement and administration agreement;
-   the relevant Competition authorities unconditionally approving the Transaction or subject to
    such conditions acceptable to Aveng and Imbali 21;
-   within 30 days from signature of the Proposal, Dimopoint to secure funding on commercial
    terms and conditions acceptable to Aveng and Imbali 21;
-   within 30 days from signature of the Proposal, Imbali 21 to secure funding on commercial terms
    and conditions acceptable to Imbali 21;

APPLICATION OF THE PROCEEDS
The proceeds will be used to improve liquidity, to reduce overall debt, and to take advantage of
growth opportunities.

CATEGORISATION OF THE TRANSACTION
The Transaction is a Category 2 transaction in terms of section 9 of the JSE Listing Requirements.

CAUTIONARY ANNOUNCEMENT
The pro-forma financial effects will be released in due course. Shareholders are therefore advised to
exercise caution when dealing in their Aveng securities.


By order of the Board of Directors

Jet Park
7 April 2015

Corporate advisor

Nedbank Capital

Sponsor
J.P. Morgan Equities South Africa Proprietary Limited

Legal advisor

Norton Rose

Competition attorneys

Baker McKenzie

Date: 07/04/2015 04:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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