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Acquisition Of Uk-Based Property Portfolio And Placement Of 44 227 648 Atlantic Leaf Shares
Atlantic Leaf Properties Limited
(Incorporated in the Republic of Mauritius on 11 November 2013)
(Registration number 119492 C1/GBL)
SEM share code: ALPL.N0000
JSE share code: ALP
ISIN: MU0422N00009
(“Atlantic Leaf” or the “Company”)
ACQUISITION OF UK-BASED PROPERTY PORTFOLIO AND PLACEMENT OF 44 227 648 ATLANTIC LEAF SHARES
Further to the announcement released on the Stock Exchange of Mauritius Ltd (“SEM”) and the Stock Exchange
News Service (“SENS”) of the JSE Limited (“JSE”) on Tuesday, 19 January 2016, the directors of Atlantic Leaf are
pleased to announce that the Company has exchanged contracts to acquire a portfolio of 6 UK-based property assets,
for a gross purchase consideration of GBP107.8 million (the “Transaction”), and has successfully raised GBP49.6
million (ZAR1.14 billion) of new equity capital pursuant to a private placement of 44 227 648 Atlantic Leaf shares to
invited investors (the “Private Placement”).
The Transaction is in line with the Company’s primary objective of investing in quality investment grade real estate
assets which deliver returns for investors through both secure long term income and capital growth. The Company’s
ability to secure a strong acquisition pipeline remains a competitive advantage and management will continue to
identify suitable opportunities for the ongoing growth of Atlantic Leaf.
HIGHLIGHTS OF THE TRANSACTION AND PRIVATE PLACEMENT
The Transaction broadens the Company’s existing underlying property portfolio and has a number of other notable
highlights, inter alia:
– the Transaction has been structured to allow swift deployment of capital raised into a direct property portfolio;
– it provides an opportunity to efficiently scale and diversify Atlantic Leaf’s property portfolio with 6 additional
quality assets;
– Atlantic Leaf has secured attractive debt funding terms, enhancing the returns to shareholders;
– the Private Placement results in further deepening and diversification of the shareholder base; and
– it is the catalyst for a planned migration to the Main Board of the JSE from the Alternative Exchange of the
JSE (the “AltX”).
SUMMARY OF THE TERMS OF THE TRANSACTION
The Company has entered into definitive agreements to acquire a portfolio of 6 UK-based property assets for a gross
purchase consideration of GBP107.8 million including all transaction costs. The Transaction provides for the separate
and individual purchase of each property and therefore the effective date of each property acquisition will be the date
of transfer of that specific property. The Transaction includes conditions of sale, undertakings and warranties which
are normal for an acquisition of this nature.
The purchase consideration will be funded by a combination of debt and new equity capital raised through the private
placement of Atlantic Leaf shares. New debt of between 55% - 60% LTV has been negotiated on attractive terms. At
least 75% of the debt will be hedged. The average yield on the Transaction portfolio is 6.6% pre-debt and, based on
indicative funding terms, the Company is targeting a post-debt forward distribution yield of 7.9%.
PRIVATE PLACEMENT
Through the Private Placement, the Company has successfully raised GBP49.6 million (ZAR1.14 billion) through the
placement of 44 227 648 Atlantic Leaf shares (the “Atlantic Leaf Shares”) as follows:
- 24 623 138 Atlantic Leaf shares at an issue price of GBP1.12 per share, raising approximately GBP27.6
million (ZAR636.6 million) through the company’s Mauritian share register; and
- 19 604 510 Atlantic Leaf shares at an issue price of ZAR25.85 per share, raising approximately GBP22.0
million (ZAR506.8 million) through the company’s South African share register.
The Atlantic Leaf Shares are expected to list and trade on the SEM and the AltX from Tuesday, 16 February 2016.
Investors will have their CSDP and CDS accounts credited with the new Atlantic Leaf shares on or before Tuesday, 16
February 2016.
TRANSACTION PORTFOLIO DETAILS
The Transaction portfolio consists of 6 UK-based property assets, including 3 industrial properties and 3 commercial
office properties. The Transaction portfolio has an ungeared average initial yield of 6.6% and a Weighted Average
Unexpired Lease Term (WAULT) of 12.1 years, and all properties are single-tenanted by blue chip or national
occupiers.
Key property specific information regarding the Transaction Portfolio is set out below:
1.
Property location St. Helens, Merseyside
Sector Industrial
Tenant Palmer & Harvey McLane Ltd
Rentable area 13,564 sq. m (145,966 sq. ft.)
Rental income (p.a.) GBP688,085
Lease expiry (years) 16.2
Net initial yield 6.0%
2.
Property location Nuneaton, Warwickshire
Sector Industrial
Tenant Booker Ltd
Rentable area 8,423 sq. m (90,669 sq. ft.)
Rental income (p.a.) GBP676,128
Lease expiry(years) 11.3
Net initial yield 6.2%
3.
Property location Redditch, Worcestershire
Sector Industrial
Tenant Halfords Ltd
Rentable area 33,576 sq. m (361,407 sq. ft.)
Rental income (p.a.) GBP1,889,441
Lease expiry (years) 13.2
Net initial yield 6.2%
4.
Property location Coventry, West Midlands
Sector Commercial Office
Tenant E.On UK Plc
Rentable area 4,322 sq. m (46,525 sq. ft.)
Rental income (p.a.) GBP1,039,868
Lease expiry (years) 7.2
Net initial yield 6.5%
5.
Property location Greenock, Renfrewshire (SCT)
Sector Commercial Office
Tenant EE Ltd
Rentable area 5,736 sq. m (61,740 sq. ft.)
Rental income (p.a.) GBP725,000
Lease expiry (years) 13.4
Net initial yield 7.0%
6.
Property location Newcastle, Tyne and Wear
Sector Commercial Office
Tenant Santander Cards UK Ltd
Rentable area 9,536 sq. m (102,650 sq. ft.)
Rental income (p.a.) GBP2,112,257
Lease expiry (years) 12.1
Net initial yield 7.2%
CLASSIFICATION OF THE TRANSACTION
The Transaction constitutes an undertaking in the ordinary course of business of Atlantic Leaf and therefore did not
fall under the scope of Chapter 13 of the Stock Exchange of Mauritius Limited (SEM) Listing Rules.
Atlantic Leaf has its primary listing on the SEM and a secondary listing on the AltX of the JSE.
By Order of the Board.
For further information please contact:
Sole bookrunner and South African corporate advisor
Leaf Capital +27 21 657 1180
Corporate secretary
Intercontinental Trust Limited +230 403 0800
JSE sponsor
Java Capital +27 11 722 3050
9 February 2016
This notice is issued pursuant to SEM Listing Rule 11.3 and Securities Act 2005. The Board of Directors of Atlantic Leaf Properties Limited
accepts full responsibility for the accuracy of the information contained in this announcement.
Date: 09/02/2016 10:30:00 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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