Wrap Text
Posting of circular, notice of debenture holders scheme meeting and notice of shareholders general meeting
DIPULA INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/013963/06)
JSE share code: DIA ISIN: ZAE000158317
JSE share code: DIB ISIN: ZAE000158325
(Approved as a REIT by the JSE)
(“Dipula” 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, 7 May 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 Dipula will substitute or exchange 100% of
the issued “A” linked units (being 193 012 083 “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 Dipula will substitute or exchange 100% of the issued “B” linked
units (being 193 012 083 “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, 5 June 2015 at the registered office of Dipula at Block B, Dunkeld Park, 6 North Road, Dunkeld West,
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.dipula.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 23 April 2015) with reference to the
company’s audited results for the year ended 30 September 2014, to 42.2%. 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 Dipula (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 Dipula “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 combined linked Thursday, 30 April
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 referred
to as the “meetings”))
Thursday, 7 May
Circular (together with the notices convening the meetings) posted
Announcement relating to the issue of the circular (together with the notices convening the Thursday, 7 May
meetings) released on SENS
Announcement relating to the issue of the circular (together with the notices convening the Friday, 8 May
meetings) published in the press
Friday, 22 May
Last day to trade in order to be eligible to vote at the meetings
Friday, 29 May
Voting record date
Last day to lodge forms of proxy for the combined linked unitholders’ general meeting (by Wednesday, 3 June
10:00)
2015
Wednesday, 3 June
Last day to lodge forms of proxy for the “A” linked unitholders’ scheme meeting (by 10:15)
Wednesday, 3 June
Last day to lodge forms of proxy for the “B” linked unitholders’ scheme meeting (by 10:30)
Wednesday, 3 June
Last day to lodge forms of proxy for the combined shareholders’ general meeting (by 10:45)
Wednesday, 3 June
Last day to lodge forms of proxy for the “A” shareholders’ scheme meeting (by 11:00)
Wednesday, 3 June
Last day to lodge forms of proxy for the “B” shareholders’ scheme meeting (by 11:15)
Friday, 5 June
Combined linked unitholders’ general meeting held at 10:00
“A” linked unitholders’ scheme meeting held at the later of 10:15 or 10 minutes after the Friday, 5 June
completion of the combined linked unitholders’ general meeting
“B” linked unitholders’ scheme meeting held at the later of 10:30 or 10 minutes after the Friday, 5 June
completion of the “A” linked unitholders’ scheme meeting
Combined shareholders’ general meeting held at the later of 10:45 or 10 minutes after the Friday, 5 June
completion of the “B” linked unitholders’ scheme meeting
“A” shareholders’ scheme meeting held at the later of 11:00 or 10 minutes after the completion Friday, 5 June
of the combined shareholders’ general meeting
“B” shareholders’ scheme meeting held at the later of 11:15 or 10 minutes after the completion Friday, 5 June
of the “A” shareholders’ scheme meeting
Friday, 5 June
Results of the meetings released on SENS
Monday, 8 June
Special resolutions submitted to CIPC for filing
Monday, 8 June
Results of the meetings published in the press
Last date on which “A” linked unitholders who voted against the “A” linked unit scheme can Friday, 12 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” 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 require Friday, 12 June
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 scheme can Friday, 12 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” 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 require Friday, 12 June
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
Last date for “A” linked unitholders who voted against the “A” linked unit scheme to be granted Monday, 22 June
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 granted Monday, 22 June
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 be granted Monday, 22 June
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 granted Monday, 22 June
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 shareholders or debenture holders exercise their rights in terms of section 115(3)(a) of the
Companies Act
2015
Tuesday, 23 June
Special resolutions expected to be registered by CIPC
Friday, 26 June
Finalisation date expected to be
Friday, 26 June
Finalisation date announcement expected to be released on SENS
Monday, 29 June
Finalisation date announcement expected to be published in the press
Expected last day to trade in existing “A” linked units on the JSE prior to the substitution of Friday, 3 July
“A” linked units by “A” ordinary shares
Expected last day to trade in existing “B” linked units on the JSE prior to the substitution of “B” Friday, 3 July
linked units by “B” ordinary shares
Monday, 6 July
Expected suspension of listing of “A” linked units on the JSE
Monday, 6 July
Expected suspension of listing of “B” linked units on the JSE
Trading in “A” ordinary shares of no par value under the new ISIN: ZAE000203378 and the Monday, 6 July
existing code of “DIA” commences
Trading in “B” ordinary shares of no par value under the new ISIN: ZAE000203394 and the Monday, 6 July
existing code of “DIB” commences
Expected scheme implementation record date for the substitution of the “A” linked units by “A” Friday, 10 July
ordinary shares at the close of business
Expected scheme implementation record date for the substitution of the “B” linked units by “B” Friday, 10 July
ordinary shares at the close of business
Monday, 13 July
Expected scheme operative date
Expected date dematerialised “A” ordinary shareholders will have their accounts updated at Monday, 13 July
their CSDP or broker
Expected date dematerialised “B” ordinary shareholders will have their accounts updated at Monday, 13 July
their CSDP or broker
Expected date of issue of new replacement share certificates provided that the old “A” linked Monday, 13 July
unit certificates have been surrendered by 12:00 on Friday, 10 July 2015 (any certificated “A”
linked units surrendered after this 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” linked Monday, 13 July
unit certificates have been surrendered by 12:00 on Friday, 10 July 2015 (any certificated “B”
linked units surrendered after this date will be replaced within five business days after receipt
by the transfer secretaries)
Monday, 13 July
Expected termination of listing of “A” linked units (at the commencement of trade)
Monday, 13 July
Expected termination of listing of “B” linked units (at the commencement of trade)
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 Dipula 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
Dipula 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, 3 July 2015.
7 May 2015
Corporate advisor and sponsor
Java Capital
Independent expert
Mazars Corporate Finance
Legal advisor
Cliffe Dekker Hofmeyr
Date: 07/05/2015 05:47:00 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
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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