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DELTA AFRICA PROPERTY HOLDINGS LIMITED - Delta Africa/Pivotal Fund - Transaction Update and Withdrawal of Delta Africa Cautionary

Release Date: 01/04/2016 09:30
Code(s): DLA PIV     PDF:  
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Delta Africa/Pivotal Fund - Transaction Update and Withdrawal of Delta Africa Cautionary

DELTA AFRICA PROPERTY HOLDINGS LIMITED                               THE PIVOTAL FUND LIMITED
(Registered by continuation in the Republic of Mauritius)            (Incorporated in the Republic of South Africa)
(Registration number 128881 C1/GBL)                                  (Registration number 2005/030215/06)
JSE share code: DLA                                                  JSE share code: PIV
SEM share code: DEL.N0000                                            ISIN: ZAE000196440
ISIN: MU0473N00010                                                   (“Pivotal”)
(“Delta Africa” or “the Company”)



TRANSACTION UPDATE AND WITHDRAWAL OF DELTA AFRICA CAUTIONARY


1.       INTRODUCTION

1.1.        Shareholders of Delta Africa and Pivotal are referred to the companies’ joint announcement dated 17 November 2015
            (“Transaction Announcement”), regarding the companies’ intention to join forces to leverage opportunities on the
            African continent (“Transaction”), and which sets out details of the Transaction, as well as to the update announcement
            on 7 December 2015.

1.2.        Delta Africa and Pivotal wish to advise their shareholders of certain amendments to the Framework Agreement and
            other agreements concluded in respect of the Transaction and to provide their shareholders with an additional update
            on their progress with the Transaction.

1.3.        Terms appearing in title case in this announcement and that are not otherwise defined herein, shall bear the meanings
            assigned to them in the Transaction Announcement.

1.4.        For purposes of this announcement the Naivasha Acquisition, the Wings Acquisition, the termination of the Asset
            Management Agreement (as set out in the Transaction Announcement), the changes to the Board (as set out in the
            Transaction Announcement) and the conclusion of the Promoters Agreement (as set out in the Transaction
            Announcement), as well as the change of the Company’s name to Mara Delta Property Holdings Limited (as set out in
            the Transaction Announcement) shall be referred to as the “Pivotal Transaction”.

1.5.        As indicated in paragraph 3.2 below, pursuant to the vendor consideration placings undertaken by Delta Africa in
            February and March 2016, Pivotal subscribed for 10 827 721 Delta Africa shares towards the total US Dollar equivalent
            of R300 million.

1.6.        A Delta Africa circular, incorporating listing particulars, (collectively, “the Circular”) will be sent to Delta Africa
            shareholders in the next few days with further information regarding the Pivotal Transaction and in order to convene a
            general meeting of Delta Africa shareholders at which those aspects of the Pivotal Transaction requiring shareholder
            approval will be presented to shareholders for approval.

2.       AMENDMENT TO FRAMEWORK AGREEMENT AND OTHER AGREEMENTS

2.1.        Framework Agreement

2.1.1.          Shareholders are advised that pursuant to certain addendums to the Framework Agreement, the Framework
                Agreement has been amended, as summarised below:
2.1.1.1.         the condition detailed in paragraph 3.1.4 of the Transaction Announcement, relating to the waiver of the
                 mandatory offer has been deleted and the date for the fulfilment or waiver of the outstanding Framework
                 Conditions Precedent has been extended; and

2.1.1.2.         the Framework Agreement is no longer conditional on the Wings Sale Agreement becoming unconditional
                 (accordingly the Naivasha Acquisition and the Wings Acquisition are no longer interconditional).

2.1.2.        The Framework Agreement, as amended, will be detailed in the Circular.

2.2.       Naivasha Sale Agreement

2.2.1.        Shareholders are advised that the Naivasha Conditions Precedent detailed in paragraphs 5.1.1 and 5.1.3 of the
              Transaction Announcement have been fulfilled and the date for fulfilment or waiver of the final Naivasha Condition
              Precedent has been extended.

2.2.2.        Shareholders are advised that pursuant to an addendum to the Naivasha Sale Agreement, the Naivasha Sale
              Agreement has been amended, as summarised below:

2.2.2.1.         the Naivasha asset will be acquired from Pivotal Global Proprietary Limited (“Pivotal Global”), a wholly owned
                 subsidiary of Pivotal; and

2.2.2.2.         the effective date of the Naivasha Acquisition shall be 1 March 2016, notwithstanding the signature date and
                 the closing date.

2.2.3.        The Naivasha Sale Agreement, as amended, will be detailed in the Circular.

2.3.       Wings Sale Agreement

              Summary

2.3.1.        Delta Africa will acquire 100% of Pivotal’s shareholding in SB Wings through a combination of a subscription for
              shares in SB Wings for cash and the purchase of the remaining shares in SB Wings for cash from Pivotal on the later
              of –

             2.3.1.1. the first day of the month immediately following the month in which the last of the Wings Conditions
                      Precedent is fulfilled;

             2.3.1.2. 1 September 2016; and

             2.3.1.3. the first day of the month immediately following the month in which the practical completion date for the
                      property development currently being undertaken by Oando Wings on the land owned by it, to be known as
                      "Oando Wings” (“Wings Development”) occurs,

              (“Delta Subscription Date”).

2.3.2.        It is anticipated that the aggregate consideration for the Wings Asset, under the subscription and the purchase
              referred to in paragraph 2.3.1 above, will amount to approximately USD73 236 000, as detailed in the Transaction
              Announcement.

2.3.3.        The date for the fulfilment or waiver of the final outstanding Wings Conditions Precedent has been extended.

2.3.4.        The number of Delta Africa shares held by Pivotal and its subsidiaries will be capped at 29.9% of the issued shares
              of Delta Africa in order to ensure that Pivotal does not trigger a mandatory offer to Delta Africa shareholders.

2.3.5.        Pivotal has provided Delta Africa with an income guarantee for all vacant space intended to form part of the Wings
              Development once completed, such income guarantee to extend for a period of two years from the Delta
              Subscription Date for rental income in line with certain agreed projections.

2.3.6.        Any party to the Wings Sale Agreement will be entitled to cancel the agreement by written notice during the 30 day
              period immediately following 31 August 2017, should practical completion of the Wings Development not have been
              achieved prior to that date.

2.3.7.        The Wings Sale Agreement, as amended, will be detailed in the Circular.

3.       SPECIFIC ISSUE

3.1.        In terms of the Framework Agreement, Pivotal agreed that it will, during the period up to 30 September 2016, subscribe
            for Delta Africa shares, whenever called upon by Delta Africa to do so on a draw-down basis, for an aggregate maximum
            amount equal to the US Dollar equivalent of R300 million, less the aggregate US Dollar subscription price of any Delta
            Africa shares subscribed for by Pivotal in terms of a vendor placing conducted by Delta Africa between the signature
            date and the closing date of the Naivasha Acquisition, to enable Delta Africa to acquire approved pipeline acquisitions
            (“Specific Issue”).

3.2.        Pursuant to the vendor consideration placings undertaken by Delta Africa in February and March 2016, Pivotal
            subscribed for 10 827 721 shares in Delta Africa equal to the US Dollar equivalent of R284 266 668.

4.       TERMINATION OF THE ASSET MANAGEMENT AGREEMENT

         Shareholders are advised that pursuant to an addendum to the Freedom Termination Agreement, the date for the
         fulfilment or waiver of the final outstanding Freedom Termination CPs has been extended.

5.       PRO FORMA FINANCIAL EFFECTS

         The consolidated pro forma financial effects of the Pivotal Transaction and the category 2 acquisitions announced to the
         market but not incorporated in the unaudited financial statements of Delta for the 6 month period ended 31 December
         2015 (being the Barclays House acquisition, the Bollore acquisition and the VDE Tete acquisition, all announced to the
         market) (“Cat 2 Acquisitions”), as set out below, are the responsibility of the directors of Delta Africa. The consolidated pro
         forma financial effects are presented in a manner consistent with the basis on which the historical financial information
         has been prepared and in terms of the Company’s accounting policies. The pro forma financial effects have been presented
         for illustrative purposes only and, because of their nature, may not give a fair reflection of the Company’s financial position
         and results of operations post the adjustments set out below.

         The table below summarises –

            -    the consolidated pro forma financial effects of the Pivotal Transaction and the Cat 2 Acquisitions on the statement
                 of financial position of the Company; and

            -    the consolidated pro forma financial effects of the shares to be issued in respect of the termination of the Asset
                 Management Agreement (“Termination Issue”) on the statement of comprehensive income of the Company,

            based on the unaudited financial statements of Delta for the 6 month period ended 31 December 2015.

            For purposes of calculating –

            -    the net asset value (“NAV”) per Share and tangible net asset value (“TNAV”) per Share, it is assumed that the Pivotal
                 Transaction and the Cat 2 Acquisitions were effected on 31 December 2015; and

            -    the earnings per Share and headline earnings per Share, it is assumed that the Termination Issue was effected on
                 1 July 2015.
                                                           Before the
                                                               Pivotal             After the Pivotal
                                                      Transaction and     Transaction and the Cat 2                       % Change
                                                            the Cat 2                  Acquisitions
                                                         Acquisitions
 NAV per share (excluding deferred tax) (USD)                   161.78                         161.87                         0.06%
 (cents)
 TNAV per share (excluding deferred tax) (USD)                  159.47                         160.64                         0.73%
 (cents)

                                                               Before
                                                                                               After
                                                          Termination                                                     % Change
                                                                                   Termination Issue
                                                                Issue
 Earnings per share (cents)                                      16.48                          16.18                        (1.82%)
 Headline Earnings per share (cents)                           (18.71)                        (19.00)                        (1.55%)


           The pro forma financial information, as summarised above, is provided to Shareholders in accordance with the JSE
           Listings Requirements. The Company will, in accordance with the requirements of the SEM Rules, also include, the
           pro forma financial information of Delta, based on the audited annual financial statements of the Company for the
           financial year ended 30 June 2015 in the listing particulars that will be distributed to shareholders with the Circular in
           relation to the Pivotal Transaction.

6.    WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

      Shareholders are referred to the cautionary contained in the Transaction Announcement and to the various renewals of
      same and are hereby advised that, as Delta Africa has announced all relevant information in relation to the Transaction
      caution is no longer required to be exercised by shareholders when dealing in Delta Africa securities.

7.    GENERAL

      Shareholders are reminded that the Pivotal Transaction constitutes an undertaking in the ordinary course of business of
      Delta Africa and therefore does not fall under the scope of Chapter 13 of the SEM Listing Rules.

1 April 2016

PSG Capital Proprietary Limited: JSE sponsor and corporate advisor to Delta Africa                     

Java Capital: JSE sponsor and corporate advisor to Pivotal

Cliffe Dekker Hofmeyr : Attorneys                                          

Intercontinental Fund Services Limited: Company Secretary to Delta Africa
                  
Capital Markets Sponsor: SEM sponsor to Delta Africa

Disclosure of Delta Africa information required under the SEM Listing Rules

Delta Africa directors: Sandile Nomvete (chairman), Greg Pearson*, Bronwyn Anne Corbett*, Peter Todd (lead independent),
Maheshwar Doorgakant, Chandra Kumar Gujadhur, Ian Macleod and Leon van de Moortele*
(*executive director)
Company secretary of Delta Africa: Intercontinental Fund Services Limited
Registered address of Delta Africa: Level 5, Alexander House, 35 Cybercity, Ebene, 72201, Mauritius
Transfer secretary (South Africa) of Delta Africa: Computershare Investor Services Proprietary Limited
Registrar and transfer agent (Mauritius) of Delta Africa: Intercontinental Secretarial Services Limited
Corporate advisor and JSE Sponsor of Delta Africa: PSG Capital Proprietary Limited
SEM sponsor of Delta Africa: Capital Markets Brokers Limited

This Notice is issued pursuant to the JSE Listings Requirements, SEM Listing Rule 11.3 and the Securities Act of Mauritius 2005.

The boards of directors of Delta Africa Property Holdings Limited and The Pivotal Fund Limited accept full responsibility for the
accuracy of the information contained in this communiqué, insofar as such information relates to, respectively, Delta Africa and
Pivotal.

Date: 01/04/2016 09:30:00 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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