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Posting of REIT Capital Restructure circular and notice of General Meetings
HOSPITALITY PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A linked units: HPA
ISIN for A linked units: ZAE000076790
Share code of B linked units: HPB
ISIN for B linked units: ZAE000076808
("Hospitality" or "the Company")
POSTING OF REIT CAPITAL RESTRUCTURE CIRCULAR TO UNITHOLDERS, NOTICE OF A GENERAL
MEETING OF HOSPITALITY SHAREHOLDER AND NOTICE OF A GENERAL MEETING OF HOSPITALITY
DEBENTURE HOLDERS
1. Introduction and background
The Company was awarded status as a Real Estate Investment Trust ("REIT") by the JSE Limited
("JSE") with effect from 1 July 2013. In order to maintain its REIT status and ensure that it may
continue to benefit from the tax efficiencies granted to REITs, as set out in section 25BB of the
Income Tax Act, the Company is required to comply with section 13 of the JSE Listings Requirements.
The board of Hospitality ("the Board") accordingly proposes that Hospitality's linked unit capital
structure be restructured to a share only structure through the implementation of the following
inter-related corporate actions:
- the substitution of:
(i) all the issued Hospitality A Linked Units for No Par Value A Shares (in the ratio of one
No Par Value A Share per Hospitality A Linked Unit), resulting in Hospitality A Linked
Unitholders becoming holders of No Par Value A Shares; and
(ii) all the issued Hospitality B Linked Units for No Par Value B Shares (in the ratio of one
No Par Value B Share per Hospitality B Linked Unit), resulting in Hospitality B Linked
Unitholders becoming holders of No Par Value B Shares, each by way of a scheme of
arrangement proposed by Hospitality in terms of sections 114 and 115 of the Act,
and the subsequent cancellation and delisting of the Hospitality Linked Units ("the
Substitution");
- the creation of:
- 300 000 000 No Par Value A Shares;
- 300 000 000 No Par Value B Shares;
- the adoption of a new memorandum of incorporation ("New MOI") to take account of the change in the Company's capital structure
(collectively "the Restructure Transaction").
Immediately following the Restructure Transaction, Hospitality's ratio of total consolidated IFRS
liabilities to its total consolidated assets will reduce from 83% to 37%, meaning that Hospitality
will meet the REIT gearing requirements and as a result be able to maintain its REIT status. In
this respect, the JSE granted REIT companies dispensation until 1 July 2015 to comply with the
gearing requirement of section 13 of the JSE Listings Requirements such that the total
consolidated IFRS liabilities of a REIT may not exceed 60% of its consolidated IFRS assets. In
addition, the JSE extended this dispensation to Hospitality until 30 September 2015, subject to
the circular being posted to Hospitality Linked Unitholders on 1 July 2015 and Linked Unitholders
approval being obtained for the implementation of the Restructure Transaction. In this regard,
the JSE agreed to the exclusion of the existing A Debentures and B Debentures ("Debentures")
issued as part of Hospitality's Linked Units and the related premium from its liabilities for the
purposes of the gearing test. However, after the dispensation ceases to apply, the gearing
calculation must be based on the total consolidated liabilities as reflected in the IFRS financial
statements, which would result in the subordinated Debentures being included in the
calculation of Hospitality's total consolidated IFRS liabilities, should they remain in issue.
2. Posting of circular and notice of General Meetings
Linked unitholders are advised that a circular incorporating the details and resolutions to
implement the Restructure Transaction has been posted today ("the circular").
The circular includes notice, convening general meetings of:
- Hospitality shareholders on 30 July 2015 at 10h00; and
- Hospitality Debenture Holders on 30 July 2015 at 10h30 (or immediately after the
conclusion of the General Meeting of Shareholders, whichever is the later), to be held at
The Zone Phase 2, 2nd Floor, Loft Offices East Wing, 2nd Floor, Corner Oxford Road and
Tyrwhitt Avenue, Rosebank
(collectively "the General Meetings").
Whilst the General Meeting of shareholders will comprise of a combined meeting of the holders
of Hospitality A Shares and Hospitality B Shares, the quorum will be determined and voting will
take place as if they were separate meetings of each class and the votes shall be counted
separately in respect of each such class.
Whilst the General Meeting of Debenture Holders will comprise of a combined meeting of the
holders of Hospitality A Debentures and Hospitality B Debentures, the quorum will be
determined and voting will take place as if they were separate meetings of each class and the
votes shall be counted separately in respect of each such class.
3. Financial effects and tax status
The Restructure Transaction will have no effect on Hospitality's earnings, revenue, net asset
value, distribution per linked unit or the Company's statement of comprehensive income
however, should the Restructure Transaction not be approved by Linked Unitholders, the loss of
the Company's REIT tax status will likely have a negative effect on the distribution per linked
unit, firstly impacting the distribution of the B shareholder.
4. Board's recommendations
The Board, having considered the terms and conditions of the Restructure Transaction, is in
favour thereof and recommends that Linked Unitholders vote in favour of the resolutions set
out in the notices of General Meetings, to implement the Restructure Transaction.
The directors who hold linked units intend to vote in favour of the resolutions set out in the
notices of General Meetings , to implement the Restructure Transaction.
5. Electronic Download
A copy of the circular can be downloaded from Hospitality's website at http://www.hpf.co.za/downloads/REITcirc.pdf.
6. Salient Dates and Times
2015
Record date to be sent the notices of General Meeting Friday, 26 June
Circular posted to Linked Unitholders Wednesday, 1 July
Detailed announcement released on SENS Wednesday, 1 July
Detailed announcement released in the press Thursday, 2 July
Last day to trade in order to be eligible to vote at the General Meetings Friday, 17 July
Record date in order to be eligible to
participate in and vote at the General Meetings
("Record Date") Friday, 24 July
Last day to lodge proxy forms in respect of
the General Meetings with the Transfer
Secretaries by 10:00 Tuesday, 28 July
Last date for Linked Unitholders objecting to
the Restructure to notify Hospitality of their
objection ("Objecting Linked Unitholders") in
terms of section 164(3) of the Act
before 10:00 Thursday, 30 July
General Meeting of Hospitality Shareholders
held at 10:00 Thursday, 30 July
General Meeting of Hospitality Debenture
Holders held at 10:30 (or immediately after
the conclusion of the General Meeting of
Hospitality Shareholders) Thursday, 30 July
Results of the General Meetings and
finalisation announcement released on SENS Thursday, 30 July
Results of the General Meetings and
finalisation announcement published in the
South African press on Friday, 31 July
Hospitality to send Objecting Linked Unitholders
who qualify to receive same, notices of the
adoption of the Substitution or adoption of the
New MOI in terms of section 164(4) of the Act Friday, 31 July
Last date for a Linked Unitholder who voted
against the passing of the resolutions proposing
the Substitution, to require Hospitality to apply
to court for approval thereof, if 15% or more of
the voting rights exercised were against the relevant resolutions,
under section 115(3)(a) of the Act Thursday, 6 August
Last date for Hospitality to apply to the court
for approval of the Substitution in the event
that sufficient objections thereto are received
under section 115(3)(b) of the Act Friday, 14 August
Expected finalisation date of the Restructure Transaction
(see note 1) Friday, 28 August
Last date for Objecting Hospitality Linked
Unitholders who qualify to receive notice of the
adoption of the Substitution or adoption of the
New MOI in terms of section 164(4) of the Act,
to deliver a written notice to Hospitality
demanding Hospitality to pay the fair value of
all Hospitality Linked Units held by such Linked
Unitholders under section 164 of the Act
(see note 2) Tuesday, 1 September
Last date to trade in Hospitality Linked Units
under the current ISIN number at the close
of business on Friday, 4 September
Listing of 300 000 000 No Par Value A Shares on
the JSE, under share code HPA and new
ISIN number ZAE000203022 and listing of
300 000 000 No Par Value B Shares on the JSE,
under share code HPB and new ISIN number
AE000203030, each at 09:00 Monday, 7 September
Suspension of Hospitality Linked Units on the
JSE under the current ISIN number from commencement
of trade Monday, 7 September
Record date for the Restructure Friday, 11 September
Termination of Hospitality Linked Units at the
commencement of business Monday, 14 September
Updating of dematerialised Hospitality
Shareholders' accounts and posting of statements
to Hospitality Shareholders who held Certificated
Linked Units prior to implementing of the Restructure Monday, 14 September
Notes:
1. The above dates and times are subject to change. Any material changes will be released on the
Stock Exchange News Service of the JSE ("SENS") and in the South African press. It should be
noted that if the Restructure Transaction is approved at the General Meetings it is still required
to be implemented through certain filings at the Companies and Intellectual Property
Commission ("CIPC"). Hospitality does not have control over the timing and processes at the
CIPC.
2. This date applies to Objecting Hospitality Linked Unitholders who qualify to receive notice of the
adoption of the Substitution or adoption of the New MOI in terms of section 164(4) of the Act,
who actually receive notice on Friday, 31 July 2015. The date applicable to any specific Objecting
Hospitality Linked Unitholder should be determined in terms of section 164(7).
3. All times quoted in the circular are local times in South Africa.
4. If the General Meetings are adjourned or postponed, proxy forms submitted for the initial
General Meetings will remain valid in respect of any adjournment or postponement of the
General Meetings, unless such proxy forms are revoked or the proxy appointments suspended.
5. In order to comply with the recently enacted Financial Markets Act, the No Par Value Shares
may only be issued pursuant to the Restructure Transaction in dematerialised form. Certificated
Linked Unitholders will therefore only receive statements (and not physical Documents of Title)
and will be required to appoint a CSDP or broker so that Dematerialised Shares can be made
available to them pursuant to the Restructure Transaction.
Johannesburg
1 July 2015
Merchant Bank and Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 01/07/2015 04:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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