Wrap Text
Posting of circular, notices of general meetings and scheme meetings
ARROWHEAD PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2011/000308/06)
JSE share code: AWA ISIN: ZAE000158101
JSE share code: AWB ISIN: ZAE000158119
(Approved as a REIT by the JSE)
(“Arrowhead” or “the company”)
POSTING OF CIRCULAR, NOTICES OF A COMBINED LINKED UNITHOLDERS’ GENERAL
MEETING, AN “A” LINKED UNITHOLDERS’ SCHEME MEETING, A “B’ LINKED UNITHOLDERS’
SCHEME MEETING, A COMBINED SHAREHOLDERS’ GENERAL MEETING, AN “A”
SHAREHOLDERS’ SCHEME MEETING AND A “B” SHAREHOLDERS’ SCHEME MEETING
1. INTRODUCTION
1.1. Linked unitholders are advised that the company has, on Thursday, 30 April 2015, posted a circular to
linked unitholders (the “circular”) relating to:
1.1.1. the conversion of the company’s current “A” linked capital structure to an “A” ordinary share
structure by way of a substitutive share-for-share transaction as contemplated in section 43 of
the Income Tax Act 58 of 1962 (the “Income Tax Act”), in terms of which Arrowhead will
substitute or exchange 100% of the issued “A” linked units (being 421 607 408 “A” linked
units) for an equivalent number of issued “A” ordinary shares, on the basis that:
1.1.1.1. the ordinary shares comprised in the issued “A” linked units are repurchased by
the company; and
1.1.1.2. the “A” debentures comprised in the issued “A” linked units are simultaneously
repaid by the company,
with the combined proceeds of such repurchase and repayment immediately and compulsorily
being applied by the erstwhile linked unitholders to subscribe for “A” ordinary shares;
whereafter
1.1.1.3. all issued “A” ordinary shares will be listed and all “A” linked units
simultaneously de-listed and cancelled; and
1.1.1.4. as there will no longer be debentures in issue, the Debenture Trust Deed of the
company (the “Debenture Trust Deed”) will be terminated, without further
payment or other compensation to debenture holders,
to be effected by way of a scheme of arrangement in terms of section 114 of the Companies
Act, 71 of 2008 (the “Companies Act”), which scheme is being proposed by the company
between the company, its “A” debenture holders, and those shareholders who hold ordinary
shares linked to “A” debentures (together, “A” linked units) (the “”A” linked unit scheme”);
and
1.1.2. the conversion of the company’s current “B” linked unit capital structure to a “B” ordinary
share structure by way of a substitutive share-for-share transaction as contemplated in section
43 of the Income Tax Act, in terms of which Arrowhead will substitute or exchange 100% of
the issued “B” linked units (being 421 607 408 “B” linked units) for an equivalent number of
issued “B” ordinary shares, on the basis that:
1.1.2.1. the ordinary shares comprised in the issued “B” linked units are repurchased by
the company; and
1.1.2.2. the “B” debentures comprised in the issued “B” linked units are simultaneously
repaid by the company,
with the combined proceeds of such repurchase and repayment immediately and compulsorily
being applied by the erstwhile linked unitholders to subscribe for “B” ordinary shares;
whereafter
1.1.2.3. all issued “B” ordinary shares will be listed and all “B” linked units
simultaneously de-listed and cancelled; and
1.1.2.4. as there will no longer be debentures in issue, the Debenture Trust Deed will be
terminated, without further payment or other compensation to debenture
holders,
to be effected by way of a scheme of arrangement in terms of section 114 of the Companies
Act, which scheme is being proposed by the company between the company, its “B”
debenture holders, and those shareholders who hold ordinary shares linked to “B” debentures
(together, “B” linked units) (the “”B” linked unit scheme”);
1.1.3. the cancellation of all authorised but unissued ordinary shares of the company (the “ordinary
share cancellation”); and
1.1.4. the creation of two new classes of shares, being “A” and “B” ordinary shares, and the
adoption of a new Memorandum of Incorporation (the “new MoI”),
(collectively the “transactions”).
1.2. The circular contains:
1.2.1. a notice convening a combined linked unitholders’ general meeting, to be held at 10:00;
1.2.2. a notice convening an “A” linked unitholders’ scheme meeting, to be held at the later of 10:15
or 10 minutes after the completion of the combined linked unitholders’ general meeting;
1.2.3. a notice convening a “B” linked unitholders’ scheme meeting, to be held at the later of 10:30
or 10 minutes after the completion of the “A” linked unitholders’ scheme meeting;
1.2.4. a notice convening a combined shareholders’ general meeting, to be held at the later of 10:45
or 10 minutes after the completion of the “B” linked unitholders’ scheme meeting;
1.2.5. a notice convening an “A” shareholders’ scheme meeting (“A” shareholders being those
shareholders holding an ordinary share linked to an “A” debenture to form an “A” linked unit)
to be held at the later of 11:00 or 10 minutes after the completion of the combined
shareholders’ general meeting; and
1.2.6. a notice convening a “B” shareholders’ scheme meeting (“B” shareholders being those
shareholders holding an ordinary share linked to a “B” debenture to form a “B” linked unit) to
be held at the later of 11:15 or 10 minutes after the completion of the “A” shareholders’
scheme meeting,
on Friday, 29 May 2015 at the registered office of Arrowhead at 2nd Floor, 18 Melrose Boulevard,
Melrose Arch, Johannesburg, 2196, for the purposes of considering and, if deemed fit, passing, with or
without modification, the resolutions required to approve the transactions, including the “A” linked unit
scheme and “B” linked unit scheme (collectively the “schemes”).
1.3. The circular is also available in electronic format on the company’s website at
www.arrowheadproperties.co.za.
2. RATIONALE
2.1. In terms of the revised section 13 of the JSE Listings Requirements (which has been amended to cater
for REIT legislation), the total consolidated IFRS liabilities of a REIT may not exceed 60% of its total
consolidated IFRS assets. The liability constituted by a company’s issued debentures is (in terms of
IFRS) required to be taken into account in the calculation for the determination of such 60% threshold.
2.2. 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 passing of the
requisite resolutions) to total consolidated assets, calculated as at the last practicable date (being 16
April 2015) with reference to the company’s audited results for the year ended 30 September 2014, to
33.58%. This will provide the company with greater flexibility to take on additional debt should the
need arise, and thus allow the company to pursue an acquisitive growth strategy whilst limiting
potential shareholder dilution, should the need arise.
2.3. Additional benefits in converting the company’s current linked unit capital structure to an all share
structure include:
2.3.1. the alignment of the company’s capital structure with the internationally recognised all equity
REIT capital structures;
2.3.2. simplifying the administration and accounting treatment of the company’s capital structure;
and
2.3.3. the removal of the cost structure associated with debentures.
3. CONDITIONS PRECEDENT TO THE “A” LINKED UNIT SCHEME
3.1. The “A” linked unit scheme will be subject to the following conditions precedent:
3.1.1. the requisite majority of “A” linked unitholders approving the relevant resolutions required to
authorise and approve the “A” linked unit scheme (such approval being the approval
contemplated in section 115(2) of the Companies Act) at the “A” linked unitholders’ scheme
meeting;
3.1.2. the requisite majority of “A” shareholders approving the relevant resolutions required to
authorise and approve the “A” linked unit scheme (such approval being the approval
contemplated in section 115(2) of the Companies Act) at the “A” shareholders’ scheme
meeting;
3.1.3. the requisite majority of “A” and “B” linked unitholders collectively approving the relevant
resolutions required to authorise and approve the “A” linked unit scheme at the combined
linked unitholders’ general meeting;
3.1.4. the requisite majority of shareholders approving the relevant resolutions required to authorise
and approve the “A” linked unit scheme at the combined shareholders’ general meeting;
3.1.5. the approval of the “B” linked unit scheme, and the fulfilment (and/or waiver) of the
conditions precedent to the “B” linked unit scheme such that it becomes capable of
implementation, save for any condition precedent to the “B” linked unit scheme in terms of
which the conditions precedent to the “A” linked unit scheme are required to be fulfilled
(and/or waived);
3.1.6. the approval of the ordinary share cancellation, and the fulfilment (and/or waiver) of the
conditions precedent to the ordinary share cancellation such that it becomes operative, save
for any condition precedent to the ordinary share cancellation in terms of which the
conditions precedent to the “A” linked unit scheme are required to be fulfilled (and/or
waived);
3.1.7. the approval of the adoption of the new MoI, and the fulfilment (and/or waiver) of the
conditions precedent to the adoption of the new MoI (which conditions precedent include the
approval of the creation of 1 000 000 000 “A” ordinary shares and 1 000 000 000 “B”
ordinary shares by the requisite majority of shareholders) such that it becomes operative, save
for any condition precedent to the adoption of the new MoI in terms of which the conditions
precedent to the “A” linked unit scheme are required to be fulfilled (and/or waived);
3.1.8. in respect of the resolutions contemplated in 3.1.1 and 3.1.2 above, no circumstances arising
which require one or more of those resolutions to be approved by a court, as contemplated in
section 115(3)(a) of the Companies Act, or if such circumstances do arise:
3.1.8.1. those circumstances cease to exist; or
3.1.8.2. the resolutions in question are not set aside by a court of final instance, as
contemplated in section 115(7) of the Companies Act; and
3.1.8.3. the company does not treat any of the resolutions in question as a nullity, as
contemplated in section 115(5)(b) of the Companies Act;
3.1.9. in respect of each of the “A” and “B” linked unit schemes, and the adoption of the new MoI,
no shareholder exercising its dissenting shareholder appraisal rights in terms of section 164 of
the Companies Act; and
3.1.10. all applicable regulatory and statutory approvals are obtained, including but not limited to the
receipt of the requisite TRP compliance certificate for both the “A” and “B” linked unit
schemes, as contemplated in section 121 of the Companies Act.
3.2. The conditions precedent have been inserted for the benefit of the company. If a condition precedent is
capable of being waived, the company may waive such condition, in its sole discretion, at any time prior
to the fulfilment thereof.
4. CONDITIONS PRECEDENT TO THE “B” LINKED UNIT SCHEME
4.1. The “B” linked unit scheme will be subject to the following conditions precedent:
4.1.1. the requisite majority of “B” linked unitholders approving the relevant resolutions required to
authorise and approve the “B” linked unit scheme (such approval being the approval
contemplated in section 115(2) of the Companies Act) at the “B” linked unitholders’ scheme
meeting;
4.1.2. the requisite majority of “B” shareholders approving the relevant resolutions required to
authorise and approve the “B” linked unit scheme (such approval being the approval
contemplated in section 115(2) of the Companies Act) at the “B” shareholders’ scheme
meeting;
4.1.3. the requisite majority of “A” and “B” linked unitholders collectively approving the relevant
resolutions required to authorise and approve the “B” linked unit scheme at the combined
linked unitholders’ general meeting;
4.1.4. the requisite majority of shareholders approving the relevant resolutions required to authorise
and approve the “B” linked unit scheme at the combined shareholders’ general meeting;
4.1.5. the approval of the “A” linked unit scheme, and the fulfilment (and/or waiver) of the
conditions precedent to the “A” linked unit scheme such that it becomes capable of
implementation, save for any condition precedent to the “A” linked unit scheme in terms of
which the conditions precedent to the “B” linked unit scheme are required to be fulfilled
(and/or waived);
4.1.6. the approval of the ordinary share cancellation, and the fulfilment (and/or waiver) of the
conditions precedent to the ordinary share cancellation such that it becomes capable of
implementation, save for any condition precedent to the ordinary share cancellation in terms
of which the conditions precedent to the “B” linked unit scheme are required to be fulfilled
(and/or waived);
4.1.7. the approval of the adoption of the new MoI, and the fulfilment (and/or waiver) of the
conditions precedent to the adoption of the new MoI (which conditions precedent include the
approval of the creation of 1 000 000 000 “A” ordinary shares and 1 000 000 000 “B”
ordinary shares by the requisite majority of shareholders) such that it becomes operative, save
for any condition precedent to the adoption of the new MoI in terms of which the conditions
precedent to the “B” linked unit scheme are required to be fulfilled (and/or waived);
4.1.8. in respect of the resolutions contemplated in 4.1.1 and 4.1.2 above, no circumstances arising
which require one or more of those resolutions to be approved by a court, as contemplated in
section 115(3)(a) of the Companies Act, or if such circumstances do arise:
4.1.8.1. those circumstances cease to exist; or
4.1.8.2. the resolutions in question are not set aside by a court of final instance, as
contemplated in section 115(7) of the Companies Act; and
4.1.8.3. the company does not treat any of the resolutions in question as a nullity, as
contemplated in section 115(5)(b) of the Companies Act;
4.1.9. in respect of each of the “A” and “B” linked unit schemes, and the adoption of the new MoI,
no shareholder exercising its dissenting shareholder appraisal rights in terms of section 164 of
the Companies Act; and
4.1.10. all applicable regulatory and statutory approvals are obtained, including but not limited to the
receipt of the requisite TRP compliance certificate for both the “A” and “B” linked unit
schemes, as contemplated in section 121 of the Companies Act.
4.2. The conditions precedent have been inserted for the company’s benefit. If a condition precedent is
capable of being waived, the company may waive such condition, in its sole discretion, at any time prior
to the fulfilment thereof.
5. SECTION 114 REPORTS
5.1. The board of directors of Arrowhead (the “board”) has appointed Mazars Corporate Finance
Proprietary Limited (the “independent expert”) as an independent expert (which meets the
requirements set out in section 114(2) of the Companies Act) to advise the board on the proposed “A”
linked unit scheme and proposed “B” linked unit scheme, and to compile a report in respect of each of
the schemes, as contemplated in section 114 of the Companies Act.
5.2. The independent expert has prepared two reports to the board, in compliance with section 114(3) of the
Companies Act, which reports together confirm that the “A” linked unit scheme and the “B” linked unit
scheme are fair and reasonable to Arrowhead “A” and “B” linked unitholders, respectively, and, in
particular, are fair and reasonable to the holders of the debentures which are to be cancelled pursuant to
the schemes. A copy of the independent expert’s reports are included in the circular.
6. VIEWS OF THE BOARD
6.1. None of the directors have any conflict of interests in relation to the schemes and all directors are able
to make impartial decisions in relation to the schemes. Accordingly, all directors are considered to be
“independent” (as defined under Regulation 81 of the Takeover Regulations).
6.2. The board, having considered the terms and conditions of the schemes, is in favour of the transactions,
including the schemes, and recommends that linked unitholders vote in favour of the resolutions set out
in the notices convening the combined linked unitholders’ general meeting, the “A” linked unitholders’
scheme meeting, the “B” linked unitholders’ scheme meeting, the combined shareholders’ general
meeting, the “A” shareholders’ scheme meeting and the “B” shareholders’ scheme meeting (collectively
the “meetings”).
6.3. The directors of the company who hold linked units intend to vote in favour of the resolutions set out in
the notices convening the meetings.
7. SALIENT DATES AND TIMES
The salient dates and times relating to the transactions are as set out below.
2015
Record date to receive circular (together with the notices convening the meetings) Friday, 17 April
Circular (together with the notices convening the meetings) posted Thursday, 30 April
Announcement relating to the issue of the circular (together with the notices convening Thursday, 30 April
the meetings) released on SENS
Announcement relating to the issue of the circular (together with the notices convening Monday, 4 May
the meetings) published in the press
Last day to trade in order to be eligible to vote at the meetings Friday, 15 May
Voting record date Friday, 22 May
Last day to lodge forms of proxy for the combined linked unitholders’ general meeting Wednesday, 27 May
(by 10:00)
Last day to lodge forms of proxy for the “A” linked unitholders’ scheme meeting (by Wednesday, 27 May
10:15)
Last day to lodge forms of proxy for the “B” linked unitholders’ scheme meeting (by Wednesday, 27 May
10:30)
Last day to lodge forms of proxy for the combined shareholders’ general meeting Wednesday, 27 May
(by 10:45)
Last day to lodge forms of proxy for the “A” shareholders’ general meeting (by 11:00) Wednesday, 27 May
Last day to lodge forms of proxy for the “B” shareholders’ general meeting (by 11:15) Wednesday, 27 May
Combined linked unitholders’ general meeting held at 10:00 Friday, 29 May
“A” linked unitholders’ scheme meeting held at the later of 10:15 or 10 minutes after Friday, 29 May
the completion of the combined linked unitholders’ general meeting
“B” linked unitholders’ scheme meeting held at the later of 10:30 or 10 minutes after Friday, 29 May
the completion of the “A” linked unitholders’ scheme meeting
Combined shareholders’ general meeting held at the later of 10:45 or 10 minutes after Friday, 29 May
the completion of the “B” linked unitholders’ scheme meeting
“A” shareholders’ scheme meeting held at the later of 11:00 or 10 minutes after the Friday, 29 May
completion of the combined shareholders’ general meeting
“B” shareholders’ scheme meeting held at the later of 11:15 or 10 minutes after the Friday, 29 May
completion of the “A” shareholders’ scheme meeting
Results of the meetings released on SENS Friday, 29 May
Special resolutions submitted to CIPC for filing Monday, 1 June
Results of the meetings published in the press Monday, 1 June
Last date on which “A” linked unitholders who voted against the “A” linked unit Friday, 5 June
scheme can require the company to seek court approval in terms of section 115(3)(a) of
the Companies Act, if the “A” linked unit scheme is approved by “A” linked unitholders
at the “A” linked unitholders’ scheme meeting at which at least 15% of the votes were
exercised against the “A” linked unit scheme
Last date on which “A” shareholders who voted against the “A” linked unit scheme can Friday, 5 June
require the company to seek court approval in terms of section 115(3)(a) of the
Companies Act, if the “A” linked unit scheme is approved by “A” shareholders at the
“A” shareholders’ scheme meeting at which at least 15% of the votes were exercised
against the “A” linked unit scheme
Last date on which “B” linked unitholders who voted against the “B” linked unit Friday, 5 June
scheme can require the company to seek court approval in terms of section 115(3)(a) of
the Companies Act, if the “B” linked unit scheme is approved by “B” linked unitholders
at the “B” linked unitholders’ scheme meeting at which at least 15% of the votes were
exercised against the “B” linked unit scheme
Last date on which “B” shareholders who voted against the “B” linked unit scheme can Friday, 5 June
require the company to seek court approval in terms of section 115(3)(a) of the
Companies Act, if the “B” linked unit scheme is approved by “B” shareholders at the
“B” shareholders’ scheme meeting at which at least 15% of the votes were exercised
against the “B” linked unit scheme
Special resolutions expected to be registered by CIPC Thursday, 11 June
Last date for “A” linked unitholders who voted against the “A” linked unit scheme to Friday, 12 June
be granted leave by the court to apply for a review of the “A” linked unit scheme in
terms of section 115(3)(b) of the Companies Act, if the “A” linked unit scheme is
approved by “A” linked unitholders at the “A” linked unitholders’ scheme meeting
Last date for “A” shareholders who voted against the “A” linked unit scheme to be Friday, 12 June
granted leave by the court to apply for a review of the “A” linked unit scheme in terms
of section 115(3)(b) of the Companies Act, if the “A” linked unit scheme is approved
by “A” shareholders at the “A” shareholders’ scheme meeting
Last date for “B” linked unitholders who voted against the “B” linked unit scheme to Friday, 12 June
be granted leave by the court to apply for a review of the “B” linked unit scheme in
terms of section 115(3)(b) of the Companies Act, if the “B” linked unit scheme is
approved by “B” linked unitholders at the “B” linked unitholders’ scheme meeting
Last date for “B” shareholders who voted against the “B” linked unit scheme to be Friday, 12 June
granted leave by the court to apply for a review of the “B” linked unit scheme in terms
of section 115(3)(b) of the Companies Act, if the “B” linked unit scheme is approved
by “B” shareholders at the “B” shareholders’ scheme meeting
If no linked unitholders exercise their rights in terms of section 115(3)(a) and (b) of the
Companies Act
Finalisation date expected to be Friday, 19 June
Finalisation date announcement expected to be released on SENS Friday, 19 June
Finalisation date announcement expected to be published in the press Monday, 22 June
Expected last day to trade in existing “A” linked units on the JSE prior to the Friday, 26 June
substitution of “A” linked units by “A” ordinary shares
Expected last day to trade in existing “B” linked units on the JSE prior to the Friday, 26 June
substitution of “B” linked units by “B” ordinary shares
Expected suspension of listing of “A” linked units on the JSE Monday, 29 June
Expected suspension of listing of “B” linked units on the JSE Monday, 29 June
Trading in “A” ordinary shares of no par value under the new ISIN: ZAE000203105 Monday, 29 June
and the existing code of “AWA” commences
Trading in “B” ordinary shares of no par value under the new ISIN: ZAE000203113 Monday, 29 June
and the existing code of “AWB” commences
Expected scheme implementation record date for the substitution of the “A” linked Friday, 3 July
units by “A” ordinary shares at the close of business
Expected scheme implementation record date for the substitution of the “B” linked Friday, 3 July
units by “B” ordinary shares at the close of business
Expected scheme operative date Monday, 6 July
Expected date dematerialised “A” ordinary shareholders will have their accounts Monday, 6 July
updated at their CSDP or broker
Expected date dematerialised “B” ordinary shareholders will have their accounts Monday, 6 July
updated at their CSDP or broker
Expected date of issue of new replacement share certificates provided that the old “A” Monday, 6 July
linked unit certificates have been surrendered by 12:00 on Friday, 3 July 2015 (any
certificated “A” linked units surrendered after this time and date will be replaced
within five business days after receipt by the transfer secretaries)
Expected date of issue of new replacement share certificates provided that the old “B” Monday, 6 July
linked unit certificates have been surrendered by 12:00 on Friday, 3 July 2015 (any
certificated “B” linked units surrendered after this time and date will be replaced
within five business days after receipt by the transfer secretaries)
Expected termination of listing of “A” linked units (at the commencement of trade) Monday, 6 July
Expected termination of listing of “B” linked units (at the commencement of trade) Monday, 6 July
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 Arrowhead 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 Arrowhead linked units after Friday, 22 May 2015 will not be eligible to vote at the
combined linked unitholders’ general meeting, the linked unitholders’ scheme meetings, the combined
shareholders’ general meeting or the shareholders’ scheme meetings.
3. All times given in this circular are local times in South Africa.
4. If the combined linked unitholders’ general meeting, “A” linked unitholders’ scheme meeting, “B” linked
unitholders’ scheme meeting, combined shareholders’ general meeting, “A” shareholders’ scheme meeting
and/or “B” shareholders’ scheme meeting are adjourned or postponed, forms of proxy submitted for the initial
combined linked unitholders’ general meeting, “A” linked unitholders’ scheme meeting, “B” linked unitholders’
scheme meeting, combined shareholders’ general meeting, “A” shareholders’ scheme meeting and/or “B”
shareholders’ scheme meeting, as the case may be, will remain valid in respect of any adjournment or
postponement of the combined linked unitholders’ general meeting, “A” linked unitholders’ scheme meeting,
“B” linked unitholders’ scheme meeting, combined shareholders’ general meeting, “A” shareholders’ scheme
meeting and/or “B” shareholders’ scheme meeting, as the case may be.
5. No dematerialisation of linked unit certificates may take place after Friday, 26 June 2015.
30 April 2015
Corporate advisor and sponsor Independent expert Legal advisor
Java Capital Mazars Corporate Finance Cliffe Dekker Hofmeyr
Date: 30/04/2015 05:43:00 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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