CAPITAL PROPERTY FUND LIMITED - Fortress / Capital - posting of circulars and revised listing particulars and notices of scheme and general meetings

Release Date: 28/09/2015 16:47
Code(s): CPF FFA FFB
 
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Fortress / Capital - posting of circulars and revised listing particulars and notices of scheme and general meetings

CAPITAL PROPERTY FUND LIMITED                               FORTRESS INCOME FUND LIMITED
(previously Friedshelf 1497 Proprietary Limited)            (Incorporated in the Republic of South Africa)
(Incorporated in the Republic of South Africa)              (Registration number 2009/016487/06)
(Registration number 2013/226575/06)                        JSE share codes: FFA       ISIN: ZAE000192787
JSE share code: CPF ISIN: ZAE000186821                      FFB    ISIN: ZAE000192795
(Approved as a REIT by the JSE)                             (Approved as a REIT by the JSE)
(“Capital”)                                                 (“Fortress”)


FORTRESS ABRIDGED REVISED LISTING PARTICULARS AND POSTING OF CAPITAL SCHEME CIRCULAR,
FORTRESS CIRCULAR, FORTRESS REVISED LISTING PARTICULARS AND NOTICES OF THE CAPITAL
SCHEME MEETING AND THE FORTRESS GENERAL MEETING


1.   Posting of Capital scheme circular, Fortress circular, Fortress revised listing particulars and notices of the Capital
     scheme meeting and the Fortress general meeting

     Shareholders of Capital and Fortress are referred to the joint firm intention announcement released on SENS on Thursday,
     16 July 2015 and published in the press on Friday, 17 July 2015 as well as the updated joint firm intention announcement
     released on SENS on Wednesday, 19 August 2015 and published in the press on Thursday, 20 August 2015 regarding the
     firm intention by Fortress to make an offer to acquire all of the issued shares of Capital that Fortress does not already own
     in exchange for Fortress A shares and Fortress B shares, by scheme of arrangement in terms of section 114 of the
     Companies Act, 71 of 2008 (the “Companies Act”), between Capital and all of its shareholders (the “Fortress scheme”),
     the specific repurchase of Fortress B shares from Capital and the general repurchase of Fortress A shares.

     Shareholders of Capital and Fortress are advised that Capital has, on Monday, 28 September 2015, posted a circular to
     Capital shareholders (the “Capital scheme circular”) relating to:

     -       the Fortress scheme, in terms of which, if implemented, Fortress will acquire the entire issued share capital of
             Capital that Fortress does not already own in exchange for the Fortress scheme consideration, being 0.35 Fortress A
             ordinary shares and 0.35 Fortress B ordinary shares for every Capital share held; and
     -       the subsequent delisting of Capital shares from the JSE.

     The Capital scheme circular contains a notice convening a scheme meeting of Capital shareholders to be held at 09:00 on
     Wednesday, 28 October 2015 at the registered office of Capital at 4th Floor, Rivonia Village, Rivonia Boulevard, Rivonia,
     2191 for the purpose of considering and, if deemed fit, passing with or without modification, the resolutions required to
     approve the Fortress scheme (the “Capital scheme meeting”).

     The Capital scheme circular is also available for inspection in electronic format on Capital’s website at
     www.capitalproperty.co.za.

     Shareholders of Capital and Fortress are advised that Fortress has, on Monday, 28 September 2015, posted:

     -       a circular to Fortress shareholders (the “Fortress circular”) relating to:
             -         the offer by Fortress to acquire the entire issued share capital of Capital, by way of a scheme of
                       arrangement, in exchange for Fortress A consideration shares and Fortress B consideration shares;
             -         authorisation for the Fortress board to allot, issue and procure the listing of the authorised but unissued
                       Fortress A consideration shares and Fortress B consideration shares required to settle the consideration for
                       the entire issued share capital of Capital;
             -         the specific repurchase of 105 482 144 Fortress B ordinary shares from Capital (the “B share specific
                       repurchase”); and
             -         a general authority to repurchase up to 105 482 144 Fortress A ordinary shares from Fortress shareholders
                       (the “A share repurchase”); and
     -       revised listing particulars, which revised listing particulars have been prepared and issued on the assumption that the
             Fortress scheme and B share specific repurchase will be implemented and, as a result, Fortress will issue in excess
             of 50% of its issued share capital pursuant to the Fortress scheme (the “revised listing particulars”).

     The Fortress circular contains a notice convening a general meeting of Fortress shareholders to be held at 10:00 on
     Wednesday, 28 October 2015 at the registered office of Fortress at 3rd Floor, Rivonia Village, Rivonia Boulevard, Rivonia,
     2191 for the purpose of considering and, if deemed fit, passing with or without modification, the resolutions required to
     approve, inter alia, the Fortress scheme, the B share specific repurchase and the A share repurchase (the “Fortress general
     meeting”).

     A copy of the Fortress circular and revised listing particulars will be available for inspection at the registered office of
     Fortress at 3rd Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191 at any time during normal business hours until
     Wednesday, 28 October 2015. The Fortress circular and revised listing particulars are also available for inspection in
     electronic format on Fortress’ website at www.fortressfund.co.za.

2.   Salient dates and times

     The salient dates and times relating to the Fortress scheme, the B share specific repurchase and A share repurchase are set
     out below.

                                                                                                                          2015
     Record date to receive the Capital scheme circular, the Fortress circular and the revised
     listing particulars (the “circulars”)                                                                Friday, 18 September
     Circulars posted on                                                                                  Monday, 28 September
     Announcement relating to the issue of the circulars (together with the notices of the
     Capital scheme meeting and the Fortress general meeting) released on SENS on                         Monday, 28 September
     Announcement relating to the issue of the circulars (together with the notices of the
     Capital scheme meeting and the Fortress general meeting) published in the press on                  Tuesday, 29 September
     Last day to trade in order to be eligible to vote at the Capital scheme meeting and the
     Fortress general meeting                                                                               Friday, 16 October
     Record date in order to vote at the Capital scheme meeting and Fortress general meeting                Friday, 23 October
     Receipt of forms of proxy in respect of the Capital scheme meeting by 09:00 on                         Monday, 26 October
     Receipt of forms of proxy in respect of the Fortress general meeting by 10:00 on                       Monday, 26 October
     Last day for Capital shareholders to give notice of their objections to the special
     resolution approving the Fortress scheme in terms of section 164(3) of the Companies
     Act by no later than 09:00 on                                                                       Wednesday, 28 October
     The Capital scheme meeting at 09:00 on                                                              Wednesday, 28 October
     Last day for Fortress shareholders to give notice of their objections to the special
     resolutions approving the B share specific repurchase in terms of section 164(3) of the
     Companies Act by 10:00 on                                                                           Wednesday, 28 October
     The general meeting of Fortress shareholders at 10:00 on                                            Wednesday, 28 October
     Results of the Capital scheme meeting and Fortress general meeting released on SENS on              Wednesday, 28 October
     Results of the Capital scheme meeting and Fortress general meeting published in the
     press on                                                                                             Thursday, 29 October
     Last date on which Capital shareholders who voted against the Fortress scheme can
     require Capital to seek Court approval in terms of section 115(3)(a) of the Companies
     Act, if the Fortress scheme is approved by Capital shareholders at the Capital scheme
     meeting but at least 15% of the votes are exercised against the Fortress scheme at the
     Capital scheme meeting                                                                              Wednesday, 4 November
     Last date on which Fortress shareholders who voted against the B share specific
     repurchase can require Fortress to seek Court approval in terms of section 115(3)(a) of
     the Companies Act, if the B share specific repurchase is approved by Fortress
     shareholders at the general meeting but at least 15% of the votes are exercised against the
     B share specific repurchase at the Fortress general meeting                                         Wednesday, 4 November
     Last date for Capital shareholders who voted against the Fortress scheme to be granted
     leave by a Court to apply for a review of the Fortress scheme in terms of section
     115(3)(b) of the Companies Act if the Fortress scheme is approved by Capital
     shareholders at the Capital scheme meeting                                                         Wednesday, 11 November
     Last date for Fortress shareholders who voted against the B share specific repurchase to
     be granted leave by a Court to apply for a review of the B share specific repurchase in
     terms of section 115(3)(b) of the Companies Act if the B share specific repurchase is
     approved by Fortress shareholders at the Fortress general meeting                                  Wednesday, 11 November
                                                                                                                                                            2015
     Last date for Capital to give notice of adoption of the special resolution/s approving the
     Fortress scheme in terms of section 164(4) of the Companies Act to Capital shareholders
     objecting to the special resolution on                                                             Wednesday, 11 November
     Last date for Fortress to give notice of adoption of the special resolution/s approving the
     B share specific repurchase in terms of section 164(4) of the Companies Act to Fortress
     shareholders objecting to the special resolution on                                                Wednesday, 11 November
     If no Capital shareholders exercise their rights in terms of section 115(3)(a) or section
     115(3)(b) of the Companies Act:
     Finalisation date expected to be on                                                                   Friday, 13 November
     Finalisation date announcement expected to be released on SENS on                                     Friday, 13 November
     Finalisation date announcement expected to be published in the press on                               Monday, 16 November
     Expected last day to trade in order to participate in the Fortress scheme and receive the
     Fortress scheme consideration                                                                         Friday, 20 November
     Suspension of listing of Capital shares on the JSE expected to take place at the
     commencement of trade on                                                                              Monday, 23 November
     Commencement of trade in Fortress A ordinary consideration shares and Fortress B
     ordinary consideration shares expected to take place at the commencement of trade on or
     about                                                                                                 Monday, 23 November
     Expected scheme consideration record date by close of trade on                                        Friday, 27 November
     Expected operative date of the Fortress scheme on                                                     Monday, 30 November
     Fortress scheme consideration expected to be posted to certificated Fortress scheme
     participants (provided their form of surrender and transfer (blue) and documents of title
     are received on or prior to 12:00 on the scheme consideration record date) on or about                Monday, 30 November
     Dematerialised scheme participants expected to have their accounts (held at their CSDP
     or broker) credited with the Fortress scheme consideration on or about                                Monday, 30 November
     Termination of listing of Capital shares on the JSE expected to take place at the
     commencement of trade on or about                                                                     Monday, 30 November

     Notes:
     1. All dates and times may be changed by mutual agreement between Capital and Fortress (subject to the approval of the JSE and/or the TRP, if
        required). The dates have been determined based on certain assumptions regarding the date by which certain shareholder and regulatory approvals
        will be obtained and that no Court approval or review of the special resolutions will be required. Any change in the dates and times will be released
        on SENS and published in the press.
     2. Shareholders of Fortress and Capital should note that as transactions in shares are settled in the electronic settlement system used by Strate, settlement
        of trades takes place five business days after such trade. Therefore, Capital shareholders who acquire Capital shares after close of trade on Friday,
        16 October 2015 will not be eligible to vote at the Capital scheme meeting and Fortress shareholders who acquire Fortress shares after close of trade
        on Friday, 16 October 2015 will not be eligible to vote at the Fortress general meeting.
     3. All times given in this announcement are local times in South Africa.
     4. No dematerialisation or rematerialisation of Capital shares may take place after Friday, 20 November 2015.
     5. If the Fortress scheme is approved by an insufficient number of Capital shareholders at the Capital scheme meeting so that a Capital shareholder may
        require Capital to obtain Court approval of the Fortress scheme as contemplated in section 115(3)(a) of the Companies Act, and a Capital shareholder
        in fact delivers such a request, the dates and times set out above will not be relevant. Capital shareholders will be notified separately of the applicable
        dates and times under this process.
     6. If any Capital shareholder who votes against the Fortress scheme exercises its rights in terms of section 115(3)(b) of the Companies Act and applies
        to Court for a review of the transaction, the dates and times set out above will not be relevant. Capital shareholders will be notified separately of the
        applicable dates and times under this process.

3.   History and nature of the business of Fortress

     Fortress is an internally asset managed REIT with a capital structure consisting of separately listed A and B shares. Fortress
     was incorporated as a public company on 25 August 2009. Fortress listed as a hybrid fund in 2009 and has holdings of
     direct property investments and listed real estate securities. These securities comprise both local listed REITs and offshore-
     based listed property companies. The direct property portfolio of 97 investment properties comprises 87.0% retail centres,
     9.9% industrial properties and 3.1% offices and residential.

4.   Strategy of Fortress

     Fortress is a hybrid fund investing in listed property securities, both local and foreign, and direct property. Direct property
     investment focuses on logistics parks and retail properties, in particular retail centres close to transport nodes with high
     footfalls. Fortress will continue to reduce its investment in industrial properties as well as its exposure to offices. In
     addition to acquisitions, Fortress will expand and redevelop its existing properties to accommodate tenant demand. Where
     opportunities arise, Fortress will increase its investments in listed property securities, particularly those with hard currency
     exposure.

5.    Share capital of Fortress

      At the date of the revised listing particulars:

      -        the authorised share capital of Fortress comprises 2 000 000 000 A ordinary shares of no par value and
               2 000 000 000 B ordinary shares of no par value;
      -        the issued share capital of Fortress comprises 466 251 105 A ordinary shares of no par value and 466 251 105 B
               ordinary shares of no par value; and
      -        there are no A and B ordinary shares held in treasury.

      Pursuant to the implementation of the Fortress scheme, 592 196 680 Fortress A ordinary shares will be issued and
      592 196 680 Fortress B ordinary shares will be issued. Pursuant to the B share specific repurchase and the A share
      repurchase, Fortress will repurchase 105 482 144 Fortress B ordinary shares at the market price, not greater than the
      weighted average traded price measured over the 30 business days prior to the date the B share specific repurchase was
      announced, being R25.25669 per share, on the date of the repurchase and will have the authority to repurchase up to
      105 482 144 Fortress A ordinary shares at a price not greater than 10% above the weighted average market value for the
      Fortress A shares for the five business days immediately preceding the date on which the transaction is effected.

      Pursuant to the implementation of the Fortress scheme and the B share specific repurchase but before the A share
      repurchase:

      -        the authorised share capital of Fortress will comprise 2 000 000 000 A ordinary shares of no par value and
               2 000 000 000 B ordinary shares of no par value;
      -        the issued share capital of Fortress will comprise 1 058 447 785 A ordinary shares of no par value and 952 965 641
               B ordinary shares of no par value; and
      -        105 482 144 Fortress B shares, owned by Capital will be held in treasury.

6.    Directors of Fortress

      Fortress intends to constitute a new board of directors after the implementation of the Fortress scheme. The full names of
      the directors of Fortress after the implementation of the Fortress scheme are set out below. Each of the directors of
      Fortress will have their business address at 3rd Floor, Rivonia Village, Rivonia Boulevard, Rivonia, 2191.

          Proposed directors
          Iraj Abedian (Independent non-executive chairman)
          Jeffrey (Jeff) Nathan Zidel (Independent non-executive deputy chairman)
          Mark Walter Stevens (Managing director and chief executive officer)
          Abraham Albertus (Rual) Bornman (Financial director)
          Andrew Edward Teixeira (Executive director)
          Willem Jakob (Wiko) Serfontein (Executive director)
          Kurauwone (Kura) Ndakashaya Francis Chihota (Independent non-executive director)
          Tshiamo Daphne Vilakazi (Independent non-executive director)
          Nontando Thelma Mahlati (Independent non-executive director)
          Djurk Peter Claudius Venter (Independent non-executive director)
          Jan Naude Potgieter (Independent non-executive director)
          Urbanus (Banus) Johannes van der Walt (Independent non-executive director)

28 September 2015

Corporate advisor and sponsor      
Java Capital 
                                   
Independent reporting accountants Competition law advisors and legal advisors
Deloitte & Touche

Independent expert to Capital in respect of the Fortress scheme       
and Fortress in respect of the B share specific repurchase            
Grant Thornton Advisory Services                                     

Independent expert to Fortress in respect of the Fortress scheme
Mazars Corporate Finance  

Date: 28/09/2015 04:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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