Wrap Text
Announcement regarding the capital restructure, REIT status, Posting of circular, Notice of Debenture Holders' gene
ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share code: ORE ISIN: ZAE000075651
("Orion Real Estate" or "the company")
ANNOUNCEMENT REGARDING THE CAPITAL RESTRUCTURE, REIT STATUS, POSTING OF CIRCULAR,
NOTICE OF DEBENTURE HOLDERS' GENERAL MEETING AND NOTICE OF SHAREHOLDERS' GENERAL MEETING
1. Introduction
Linked unitholders are advised that Orion's board of directors ("the Board") made an
application to the JSE Limited ("JSE") to obtain REIT status, which application was
approved by the JSE and will be effective from 10 April 2015. The JSE REIT approval
process included confirmations and undertakings by the Board that the company will
comply with section 13 of the JSE Listings Requirements ("Listings Requirements") in
order for the company to secure and retain its REIT status. In this regard, the Board has
proposed converting the company's current linked unit capital structure to an all share
structure so as to:
- ensure compliance with section 13 of the Listings Requirements;
- align the company's capital structure with the internationally recognised all equity REIT
capital structures;
- simplify the administration and accounting treatment of the company's capital
structure; and
- remove any costs associated with debentures.
Linked unitholders are advised that the company has on Monday, 13 April 2015 posted or
otherwise distributed a circular to linked unitholders (the "circular") relating to:
the capital restructure, which includes:
- the conversion of the company's current linked unit capital structure to an all share
structure by:
(i) the proposed amendment to the Orion Debenture Trust Deed to permit the
delinking, cancellation and capitalisation of the Orion debentures;
(ii) the proposed delinking of each Orion ordinary par value share from an Orion
debenture so as to no longer constitute a linked unit;
(iii) the proposed cancellation of each debenture, for no consideration, to be effected
by way of a scheme of arrangement in terms of section 114(1)(c) of the Companies
Act, 2008 (Act 71 of 2008) ("the Companies Act"), ("Scheme"), which will take
effect on the scheme operative date which is expected to be on 29 June 2015;
(iv) the proposed capitalisation of an amount equal to the issue price of each
debenture from an accounting perspective for purposes of financial reporting in
accordance with IFRS to form part of the stated capital attributable to the ordinary
shares that have been issued by Orion;
(v) termination of the Orion Debenture Trust Deed; and
(vi) the conversion of Orion par value shares to Orion no par value shares.
- the amendment of Orion's Memorandum of Incorporation ("MoI") to reflect the change
in Orion's capital structure,
(collectively the "transaction").
The circular contains a notice convening a general meeting of Orion debenture holders
which will be held at 10:00 on Thursday, 14 May 2015 at the registered office of Orion at
16th Floor, Orion House, 49 Jorissen Street, Braamfontein, for the purpose of considering
and, if deemed fit, passing, with or without modification the resolutions required to approve
the transaction.
The circular further contains a notice convening a general meeting of Orion shareholders
which will be held at the later of 10:30 or 10 minutes after the completion of the general
meeting of Orion debenture holders on Thursday, 14 May 2015 at the registered office
of Orion at 16th Floor, Orion House, 49 Jorissen Street, Braamfontein, for the purpose
of considering and, if deemed fit, passing, with or without modification, the resolutions
required to approve the transaction.
This circular is also available on the company's website at www.oriongroup.co.za,
and copies of the circular may also be obtained at the company's registered office as set
out above.
2. Rationale
In terms of the revised section 13 of the Listings Requirements (which have been amended
to cater for REIT legislation), specifically paragraph 13.46(g), the total consolidated IFRS
liabilities of a REIT may not exceed 60% of its total consolidated IFRS assets. As the
Listings Requirements makes use of the IFRS definition of a liability, a company is required
to include in such calculation any debentures it has issued. In the company's case this
would require the company to include its variable rate, subordinated debentures which
form part of its linked unit capital structure, including any debenture premium, to be
included in the calculation for the determination of such 60% threshold.
The JSE approved Orion's status as a REIT provided that 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. By converting its capital
structure, the company will reduce the ratio of its total consolidated liabilities (excluding
subordinated debentures, as these will no longer exist subsequent to the implementation
of the transaction) to total consolidated assets, calculated as at the last practicable date of
8 April 2015 to 45.67% and will thereby ensure that the company's consolidated liabilities
remain below the aforementioned 60% threshold requirement. Upon the delinking of linked
units and cancellation of the debentures, the ratio of Orion total consolidated IFRS liabilities
to total consolidated IFRS assets will be 39,08%. The capital restructure will simplify the
accounting treatment, as Orion will no longer have a linked unit capital structure, but will
now have a share only structure.
3. Conditions precedent to the Scheme
The Scheme will be subject to the fulfilment of the following conditions precedent:
3.1 the approval of the Scheme by the requisite majority of linked unitholders, 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 section 115(5)(b) of the Companies Act;
3.2 the requisite majority of debenture holders, at the general meeting of Orion debenture
holders, approving the relevant resolutions required to authorise:
- the amendment to the Debenture Trust Deed;
- the delinking of each of the company's ordinary shares from a debenture so as
to no longer constitute a linked unit;
- cancellation of the debentures;
- capitalisation of the debentures to form part of Orion's stated capital account;
and
- the termination of the Debenture Trust Deed, without payment or other
compensation to debenture holders;
3.3 the requisite majority of shareholders, at the general meeting of Orion 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 linked unit;
- cancellation of the debentures and the termination of the Debenture Trust Deed;
- capitalisation of the debentures to form part of Orion's stated capital account;
- conversion of the authorised Orion par value shares to Orion no par value
shares;
- conversion of the issued Orion par value shares to Orion no par value shares;
and
- the MoI amendments, as detailed in the circular;
3.4 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 and views of the Board
The Board has appointed the 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 Board concerning
the Scheme. The Takeover Regulation Panel has granted dispensation not to provide
valuation information as required by Regulations 90 (6) (e) as there is no offer consideration
against which the value of the Orion linked units can be compared. The independent
expert, having analysed the effects of the Scheme, has concluded that there will be no
adverse effects on Orion linked unitholders, and the terms and conditions of the Scheme
are fair and reasonable.
The independent expert has prepared a report to the Board in compliance with section
114(3) of the Companies Act, which report is set out in Annexure 1 of the circular.
The Board, having considered the terms and conditions of the Scheme, and the
opinion of the independent expert, is in favour of the Scheme and the transaction and
recommends that linked unitholders vote in favour of the resolutions set out in the notice
of general meeting of Orion debenture holders and the notice of general meeting of Orion
shareholders, to implement the Scheme and the transaction.
The directors of the company who hold linked units intend to vote in favour of the resolutions
set out in the notice of general meeting of Orion debenture holders and the notice of the
general meeting of Orion shareholders, to implement the Scheme and the transaction.
5. Irrevocable Undertaking
Mr Franz Gmeiner who indirectly holds 93.04% of the linked units has irrevocably
undertaken to vote in favour of the resolutions set out in the notice of general meeting
of Orion debenture holders and the notice of the general meeting of Orion shareholders.
6. Salient Dates and Times
The salient dates and times relating to the transaction are set out below.
2015
Record date in order to receive circular (together with the notices
convening the general meeting of Orion debenture holders and the
general meeting of Orion shareholders) Friday, 27 March
Circular (together with the notices convening the general meeting
of Orion debenture holders and the general meeting of Orion
shareholders) posted on Monday, 13 April
Announcement relating to the issue of the circular (together
with notices convening the general meeting of Orion debenture
holders and the general meeting of Orion shareholders) released
on SENS on Monday, 13 April
Announcement relating to the issue of the circular (together with the
notices convening the general meeting of Orion debenture holders
and the general meeting of Orion shareholders) published in the
press on Tuesday, 14 April
Last day to trade in order to be eligible to vote at the
general meeting of Orion debenture holders and the
general meeting of Orion shareholders Thursday, 30 April
Voting record date Friday, 8 May
Last day to lodge forms of proxy for the general meeting of Orion
debenture holders (by 10:00) Tuesday, 12 May
Last day to lodge forms of proxy for the general meeting of Orion
shareholders (by 10:30) Tuesday, 12 May
General meeting of Orion debenture holders held at 10:00 on Thursday, 14 May
General meeting of Orion shareholders held at the later of 10:30
or 10 minutes after the completion of the general meeting of Orion
debenture holders on Thursday, 14 May
Results of the general meeting of Orion debenture holders and the
shareholders' general meeting released on SENS on Thursday, 14 May
Special resolutions submitted to CIPC for filing on Thursday, 14 May
Results of the general meeting of Orion debenture holders and the
general meeting of Orion shareholders published in the press on Friday, 15 May
Last date on which linked unitholders can make application to court
in terms of section 115(3)(a) of the Companies Act if the scheme
is approved by linked unitholders at the general meetings but with
sufficient opposing votes that linked unitholders may require the
company to obtain court approval for the scheme as contemplated
in section 115(3)(a) Thursday, 28 May
Last date for Orion to give notice of adoption of the special
resolution approving the Scheme to unitholders objecting to the
special resolution on Thursday, 28 May
If no linked unitholders exercise their rights in terms of
section 115(3)(a) of the Companies Act
Special resolutions expected to be registered by CIPC on or before Wednesday, 10 June
Finalisation date announcement expected to be released on SENS
on Thursday, 11 June
Finalisation date announcement expected to be published in the
press on Friday, 12 June
Expected last day to trade in existing linked units on the JSE prior
to the delinking of the linked units and the capitalisation of the
debentures on Friday, 19 June
Trading in delinked ordinary shares under the new ISIN:
ZAE000201695 and the existing code of "ORE" commences on Monday, 22 June
Expected suspension of listing of linked units on the JSE Monday, 22 June
Expected scheme implementation record date for the delinking of
the linked units and the capitalisation of the debentures at the close
of business on Friday, 26 June
Expected scheme operative date Monday, 29 June
Expected date dematerialised shareholders will have their accounts
updated at their CSDP or broker on Monday, 29 June
Expected date of issue of new replacement share certificates
provided that the old linked unit certificates have been surrendered
by 12:00 on Friday, 26 June 2015 (any certificated linked units
surrendered after this date will be replaced within five business days
after receipt by the transfer secretaries) Monday, 29 June
Expected termination of listing of linked units (at the
commencement of trade) Monday, 29 June
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. Linked unitholders should note that as transactions in Orion linked units are settled in the electronic settlement
system used by Strate, settlement of trades takes place five business days after such trade. Therefore,
unitholders who acquire Orion linked units after Thursday 30 April 2015, will not be eligible to vote at the
general meeting of Orion debenture holders or the general meeting of Orion shareholders.
3. All times given in this circular are local times in South Africa.
4. If the general meeting of Orion debenture holders and/or the general meeting of Orion shareholders are
adjourned or postponed, forms of proxy submitted for the initial general meeting of Orion debenture holders
and/or general meeting of Orion shareholders, as the case may be, will remain valid in respect of any
adjournment or postponement of the general meeting of Orion debenture holders and/or the general meeting
of Orion shareholders, as the case may be.
5. No dematerialisation of linked unit certificates may take place after Friday, 19 June 2015.
7. Responsibility statement
The members of the Board accept responsibility for the information contained in this
announcement, and to the best of their respective knowledge and belief, the information is
true and, where appropriate, this announcement does not omit anything likely to affect the
importance of the information included.
Johannesburg
13 April 2015
Lead Transaction Sponsor
Deloitte
Attorneys
TUGENDHAFT WAPNICK BANCHETTI AND PARTNERS
Transaction Manager
D P Cohen Consulting Proprietary Limited
Sponsor
Arbor Capital
Independent Expert
BDO
Date: 13/04/2015 05:48:00 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.
Sharenet Sites 
