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PUTPROP LIMITED - Disposal of Erf 482 Selby Ext 6 and Withdrawal of Cautionary Annoucement

Release Date: 14/09/2015 15:39
Code(s): PPR     PDF:  
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Disposal of Erf 482 Selby Ext 6 and Withdrawal of Cautionary Annoucement

PUTPROP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1988/001085/06)
Share code: PPR ISIN: ZAE000072310
(“Putprop” or “the Company” or “the Group”)

DISPOSAL OF ERF 482 SELBY EXT 6 AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1. INTRODUCTION AND RATIONALE
  
   Shareholders are referred to the cautionary announcement released on SENS on 28 August 2015 wherein
   they were advised that the Company had received an offer for the potential sale of a property (“the Offer”).
   The board of directors of Putprop (“the Board”) wishes to inform shareholders that on 10 September 2015
   (“Agreement date”) Putprop entered into a sale of property agreement (“Sale Agreement”) with the City
   of Johannesburg Metropolitan Municipality (“the Purchaser”), in terms of which Putprop will dispose of
   Erf 482, Selby Ext 6 (“the Property”), (“the Disposal”).

   The Disposal was motivated in part by the Group’s current tenant indicating that they would not renew
   their lease on expiry in December 2015, thus increasing the potential vacancy of the Group by an additional
   17% in respect of the Property, and the view that proceeds received from any sale could be better utilised
   in newer, better positioned properties.

2. THE DISPOSAL

   2.1 Details of the Property

       The Property is situated on Erf 482, Selby Ext 6, Registration Division IR, Province of Gauteng and,
       together with all buildings and improvements thereon, measures 5.5529 hectares. The gross lettable
       area (GLA) of the Property is 13 909 square metres and the weighted average rental per square metre
       is currently R44.80

   2.2 Purchase consideration and effective date

       2.2.1   The total purchase consideration, being R65 million (exclusive of VAT), shall be paid by the
               Purchaser into the trust account of KR Attorneys (“the Conveyancers”) within ten days of the
               Agreement Date. On the effective date of the Disposal, being the date of registration and
               transfer of the Property to the Purchaser, the Conveyancers shall ensure that:

               2.2.1.1    should there be any outstanding property rates and taxes owed by the Company
                          to the Purchaser in respect of the Property, a portion of the purchase consideration
                          shall be paid to the Purchaser to off-set such indebtedness. As at the Agreement
                          Date, there is no outstanding amount due; and

               2.2.1.2    the remainder shall be payable to Putprop (“the Consideration Balance”).

       2.2.2   All transfer costs, including transfer duty, in respect of the Property shall be payable by the
               Purchaser.

   2.3 Date of possession and lack of conditions precedent

       Possession and occupation of the Property shall be given to the Purchaser on the date of transfer of
       the Property, or such earlier date as agreed between Putprop and the Purchaser in writing, but in any
       event not before 15 November 2015. Should Putprop and the Purchaser agree that possession and
       occupation of the Property occur before the date of transfer of the Property, then the Purchaser shall
       pay occupational rental to Putprop until date of transfer to the amount of R325 000.00 (exclusive of
       VAT) per month.

       The Disposal is not subject to any conditions precedent.

3. THE VALUE OF, AND PROFITS ATTRIBUTABLE TO THE PROPERTY
  
   The value of the net assets that are the subject of the Disposal as at 30 June 2015 was R49 million. The
   profit after tax attributable to the net assets that are the subject of the Disposal for the year ended 30 June
   2015 was R4 674 000.

   A valuation of the Property was performed on 30 June 2015 by Peter Parfitt representing Quadrant
   Properties Valuers who is independent and is registered as a professional valuer in terms of the Property
   Valuers Profession Act, 2000 (Act 47 of 2000). The Property was valued at an amount of R49 Million.

4. APPLICATION OF THE PROCEEDS OF THE DISPOSAL

   The Consideration Balance received by Putprop from the Disposal shall be used to source new rental
   producing properties.

5. CLASSIFICATION OF THE DISPOSAL
   
   The Disposal is classified as a Category 2 transaction in terms of the Listings Requirements of JSE Limited.

6. WITHDRAWAL OF CAUTIONARY

   Shareholders are advised that further to this announcement regarding the Disposal, shareholders no
   longer need to exercise caution when dealing in Putprop’s securities.

14 September 2015

Sponsor
Merchantec Capital
Date: 14/09/2015 03:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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