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Rights offer finalisation announcement
SA Corporate Real Estate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2015/015578/06)
(Approved as a REIT by the JSE)
Share Code: SAC
ISIN: ZAE000203238
(“SA Corporate” or the “Company”)
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN RESPECT OF WHICH THE PUBLICATION, DISTRIBUTION OR
RELEASE, DIRECTLY OR INDIRECTLY, OF THIS ANNOUNCEMENT WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS
OF SUCH JURISDICTION OR IN RESPECT OF WHICH THE OFFERING CONTEMPLATED BY THIS ANNOUNCEMENT IS
UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE,
OTHERWISE ACQUIRE, SUBSCRIBE FOR, SELL, OTHERWISE DISPOSE OF OR PURCHASE ANY SECURITY IN ANY JURISDICTION.
RIGHTS OFFER FINALISATION ANNOUNCEMENT
1. INTRODUCTION
SA Corporate shareholders (“Shareholders”) are referred to the declaration announcement released on the
Stock Exchange News Service of the JSE Limited (“JSE”) on Friday, 13 November 2015 relating to a
renounceable rights offer to its shareholders (“Rights Offer”) to raise up to ZAR1.2 billion.
All conditions precedent to the Rights Offer have now been fulfilled, being:
- The JSE granting their approval of the circular containing full details of the terms of the Rights Offer and
a form of instruction; and
- The JSE granting a listing of the letters of allocation on the JSE in respect of the Rights Offer.
2. USE OF PROCEEDS
As advised in the SENS announcement released on Friday, 9 October 2015, SA Corporate concluded an
agreement for the acquisition of a 50% interest in a property portfolio located in Zambia for a purchase
consideration of USD46.7 million (approximately R653.8 million) (“the Acquisition”). It was announced that
the purchase consideration would be funded by way of a rights offer to existing Shareholders and through USD
debt facilities of USD27 million. As announced on SENS on Thursday, 5 November 2015, the Acquisition was in
the process of being implemented. Shareholders are advised that the Acquisition was effected and the
purchase consideration was settled through ZAR debt bridge facilities.
In addition to the Acquisition, the Company continues to pursue acquisitions in respect of the Afhco inner city
and residential property business (“Afhco Acquisitions”) and has acquired a portfolio of attractively priced
properties that complement the strength of the Company’s existing portfolio’s real estate fundamentals. The
purchase consideration in respect of the Afhco Acquisitions is ZAR 280 million, and has been funded by utilising
debt facilities.
Upon completion of the Acquisition and Afhco Acquisitions, and accounting for debt facilities utilised to fund
capital expenditure in respect of developments (“Development Costs”), the loan to value of the Company has
increased from 30.2% at 30 June 2015 to approximately 38.3% at 12 November 2015. This level of gearing is
marginally in excess of the gearing levels targeted by the Board (being a loan to value ratio of between 33%
and 37% (“Target Gearing”), and hence restrictive of further debt issuance to fund the strategic priorities of
the Company.
The net proceeds of the Rights Offer (after estimated expenses and prepaid dividend amounts) will be utilised
for the following:
- to repay banking facilities utilised since 30 June 2015 in respect of the Acquisition, the Afhco
Acquisitions and Development Costs;
- to increase funds available to pursue pipeline acquisitions primarily in respect of SA Corporate’s Afhco
inner city and residential property business (“Pipeline”) which are attractively priced and
complement the strength of the existing portfolio’s real estate fundamentals;
- to contribute to the funding of the Company’s redevelopment pipeline (“Redevelopments”); and
- to establish an optimal gearing and capital structure and bring SA Corporate’s loan to value ratio in
line with the Company’s Target Gearing post the Acquisition, Afhco Acquisitions and Redevelopments.
Immediately following the Rights Offer, it is expected that the loan to value of the Company will be
approximately 29%. It is the intention of the Company to maintain its Target Gearing level of between 33%
and 37% after execution of the Pipeline and Redevelopments in 2016.
3. THE RIGHTS OFFER
3.1 SALIENT TERMS
In terms of the Rights Offer, 263,141,113 new Shares (“Rights Offer Shares”) will be offered to
Shareholders recorded in the share register at the close of business on Friday, 27 November 2015
(“Record Date”), at a subscription price (“Subscription Price”) of 457 cents per Rights Offer Share, in
the ratio of 13.00 Rights Offer Shares for every 100 Shares held.
The Subscription Price per Rights Offer Share represents a 10% discount to the 30 day volume
weighted average price of the Shares listed on the JSE as at the close of business on Thursday, 12
November 2015, being the date on which the Rights Offer was priced.
The Rights Offer Shares issued will rank pari passu with the existing issued Shares.
3.2 SALIENT DATES AND TIMES
2015
Last day to trade in SA Corporate Shares in order to participate in the Rights Offer
Friday, 20 November
(cum entitlement)
SA Corporate Shares commence trading ex-entitlement at 09:00 Monday, 23 November
Listing of and trading in the letters of allocation on the JSE commences at 09:00 Monday, 23 November
Rights Offer circular and form of instruction posted to certificated Shareholders Tuesday, 24 November
Record date for the Rights Offer Friday, 27 November
Rights Offer opens at 09:00 Monday, 30 November
Letters of allocation credited to an electronic account created by the transfer Monday, 30 November
secretaries in respect of holders of certificated Shares
CSDP or broker accounts credited with entitlements in respect of holders of Monday, 30 November
dematerialised Shares
Rights Offer circular posted to dematerialised Shareholders who have elected to Tuesday, 01 December
receive such documents
Last day for trading letters of allocation on the JSE Friday, 04 December
Listing of Rights Offer Shares and trading therein on the JSE commences at 09:00 Monday, 07 December
Rights Offer closes at 12:00 Friday, 11 December
Record date for the letters of allocation Friday, 11 December
Rights Offer Shares issued on or about Monday, 14 December
CSDP or broker accounts in respect of holders of dematerialised Shares debited Monday, 14 December
and updated with Rights Offer Shares and Share certificates posted to certificated
Shareholders by registered post on or about
Results of the Rights Offer released on SENS Monday, 14 December
Results of the Rights Offer published in the press Tuesday, 15 December
CSDP or broker accounts in respect of holders of dematerialised Shares debited Thursday, 17 December
and updated with any excess Shares allocated and share certificates posted to
certificated Shareholders by registered post on or about
Refund cheques posted to holders of certificated Shares in respect of Thursday, 17 December
unsuccessful applications
Notes:
1. All times shown in this circular are South African local times.
2. Share certificates may not be dematerialised or rematerialised between Monday, 23 November 2015
and Friday, 27 November 2015, both days inclusive.
3.3 COMMITTED PARTICIPANTS
SA Corporate has concluded agreements with six of its ten largest Shareholders (“Committed
Participants”) in terms of which the Committed Participants have elected to irrevocably subscribe
for approximately 164,192,397 Shares pursuant to the Rights Offer, representing approximately 62%
of the aggregate Rights Offer proceeds.
3.5 EXCESS APPLICATIONS
Shareholders will have the right to apply for any excess Rights Offer Shares not taken up by other
Shareholders subject to such rights being transferable upon renunciation of the letters of allocation,
and any such excess Shares will be attributed equitably, taking cognisance of the number of Shares
and rights held by the Shareholder just prior to such allocation, including those taken up as a result
of the Rights Offer, and the number of excess Rights Offer Shares applied for by such Shareholder.
3.6 FOREIGN SHAREHOLDERS
Introduction
Foreign Shareholders may be affected by the Rights Offer, having regard to prevailing laws in their
relevant jurisdictions. Such foreign Shareholders should inform themselves about and observe any
applicable legal requirements of such jurisdiction in relation to all aspects of the Rights Offer circular
that may affect them, including the Rights Offer. It is the responsibility of each foreign Shareholder
to satisfy himself as to the full observation of the laws and regulatory requirements of the relevant
foreign jurisdiction in connection with the Rights Offer, including the obtaining of any governmental,
exchange or other consents or the making of any filing which may be required, the compliance with
other necessary formalities and the payment of any issue, transfer or other taxes or other requisite
payments due in such jurisdiction. The Rights Offer is governed by the laws of South Africa and is
subject to applicable laws and regulations, including the Exchange Control Regulations.
Any non-resident Shareholder will be responsible for any transfer or other taxes or other requisite
payments by whomsoever payable. SA Corporate and any other person acting on its behalf shall be
fully indemnified and held harmless by non-resident shareholders for any such transfer or other
taxes as such person may be required to pay.
Affected foreign shareholders
Any Shareholder who is in doubt as to his position with respect to the Rights Offer in any
jurisdiction, including, without limitation, his tax status, should consult an appropriate independent
professional advisor in the relevant jurisdiction without delay. Foreign Shareholders are reminded
that they may dispose of their Shares on or prior to the last day to trade, in which case they will not
participate in the Rights Offer.
Foreign Shareholders accordingly must take their own advice on whether they are entitled, after the
Rights Offer, to continue beneficially to hold any Shares distributed to them and take the
appropriate action in accordance with that advice.
Note to U.S. Shareholders
The Rights Offer Shares will not be registered with the U.S. Securities and Exchange Commission
(“SEC”) under the U.S. Securities Act of 1933, as amended, or any U.S. state securities laws. Neither
the SEC nor any U.S. federal or state securities commission has registered, approved or disapproved
the Rights Offer Shares or passed comment or opinion upon the accuracy or adequacy of the circular
to be issued by SA Corporate in respect of the Rights Offer. Any representation to the contrary is a
criminal offence in the U.S.
Shareholders who are citizens or residents of the U.S. are advised that the Rights Offer Shares have
not been and will not be registered under the U.S. Securities Exchange Act of 1934, as amended.
Sale of letters of allocation
It is the responsibility of any person outside the common monetary area (including, without
limitation, nominees, agents and trustees for such persons) wishing to take up Rights Offer Shares
under the Rights Offer, to satisfy themselves as to full observance of the applicable laws of any
relevant territory, including obtaining any requisite governmental or other consents, observing any
other requisite formalities and paying any issue, transfer or other taxes due in such territories.
If a premium can be obtained over the expenses of the sale, the rights of Shareholders in the
jurisdictions in which it is illegal to make an offer will be sold by the transfer secretaries on the JSE
for the benefit of such Shareholders, in accordance with this section. Any premium over the
expenses of the sale of the rights of Shareholders in these jurisdictions (including applicable taxes,
brokerage fees and commissions) shall be remitted to such Shareholders.
None of SA Corporate, the transfer secretaries or any broker appointed by them or SA Corporate,
will have any obligation or be responsible or liable for any loss or damage whatsoever in relation to,
or arising out of, the timing of such sales or the remittance of the net proceeds of such sales.
3.7 DISTRIBUTION OF CIRCULAR
Shareholders are advised that a circular containing full details of the Rights Offer will be posted to
them on the dates set out in paragraph 3.2 above.
Johannesburg
17 November 2015
Joint bookrunner, financial advisor and transaction sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
Joint bookrunner, financial advisor and transaction sponsor
The Corporate Finance division of Investec Bank Limited
Legal adviser
Cliff Dekker Hofmeyr Inc.
Sponsor
Nedbank Corporate and Investment Banking
Date: 17/11/2015 01:11:00 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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