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Update on the Acquisition of Waterfall Node Development Rights
BALWIN PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/028851/06)
Share code: BWN
ISIN: ZAE000209532
("Balwin" or "the Company")
UPDATE ON THE ACQUISITION OF WATERFALL NODE DEVELOPMENT RIGHTS
1. Introduction
Shareholders are referred to the announcement dated 14 December 2015, in which Balwin announced that it had
concluded a non-binding conditional agreement with Portimix Proprietary Limited (“Portimix”) for the acquisition of
development rights in Johannesburg’s Kyalami / Waterfall node, on which an approximate 15,000 residential sectional
title units may be developed (the “Announcement”) (collectively, the “Acquisition”).
The board of directors of Balwin is pleased to announce that the Company has successfully concluded a formal
acquisition agreement (the “Agreement”), on the terms outlined in the Announcement, save for those outlined in
paragraphs 2 and 3, below.
2. Consideration payable
The consideration payable by Balwin in respect of the Acquisition is outlined in the table below:
Waterfall
Ridge
(previously
Waterfall “Waterfall
Notes Polo Fields Fields Village”) Total
Maximum total Acquisition price (subject to
early redemption discounts per note a) a R 469,328,077 R 465,558,048 R 565,658,997 R 1,500,545,122
Payable as:
- Up-front payments b R 80,000,000 R 90,000,000 R20,000,000 R 190,000,000
1 June 2016 R 80,000,000 - - R 80,000,000
1 September 2016 - R 30,000,000 - R 30,000,000
1 November 2016 - R 30,000,000 - R 30,000,000
22 February 2017 - R 30,000,000 - R 30,000,000
release by City of Johannesburg (“COJ”) c - - R 20,000,000 R 20,000,000
- Ongoing payments d R 389,328,077 R 375,558,048 R 545,658,998 R 1,310,545,123
by 1 June 2018 a further R 86,400,000 R 35,308,000 - R 121,708,000
by 1 June 2019 a further - - R 51,300,000 R 51,300,000
from 1 June 2018 to 1 June 2019 a further R 93,312,000 R 38,132,640 - R 131,444,640
from 1 June 2019 to 1 June 2020 a further R 100,776,960 R 41,183,251 R 55,404,000 R 197,364,211
from 1 June 2020 to 1 June 2021 a further R 108,839,117 R 44,477,911 R 59,836,320 R 213,153,348
from 1 June 2021 to 1 June 2022 a further - R 48,036,144 R 64,623,226 R 112,659,370
from 1 June 2022 to 1 June 2023 a further - R 51,879,036 R 69,793,084 R 121,672,120
from 1 June 2023 to 1 June 2024 a further - R 56,029,359 R 75,376,530 R 131,405,889
from 1 June 2024 to 1 June 2025 a further - R 60,511,707 R 81,406,653 R 141,918,360
from 1 June 2025 to 1 June 2026 a further - - R 87,919,185 R 87,919,185
Notes:
a) The total Acquisition price is subject to an early redemption discount, in terms of which the total consideration
payable by Balwin in respect of any or all development/s shall be reduced to the following aggregate
amounts:
– Balwin elects to make full payment for any or all development/s on or before 15 December 2018:
Waterfall Waterfall Total
Polo Fields Fields Ridge
Total Acquisition price R 400,000,000 R 350,000,000 R 400,000,000 R1,150,000,000
– Balwin elects to make full payment for any or all development/s after 15 December 2018:
Total Acquisition price = total amounts paid + (outstanding balance – (outstanding balance * 6.5%))
b) Balwin intends to fund the up-front payments out of existing cash reserves.
c) The Waterfall Ridge property is subject to an institute lease in favour of Johannesburg City Parks (governed
by the COJ). The acquisition of the Waterfall Ridge development rights is subject to the cancellation of this
lease by Johannesburg City Parks by no later than 28 February 2017, failing which the provisions of the
Agreement are severable and shall cease to apply in respect of the Waterfall Ridge property only.
d) Ongoing payments are payable as 15% of the selling price of each unit developed and sold, subject to the
15% payments being equal to at least the amounts specified in the table above.
Balwin intends to fund the ongoing payments out of cash generated through the development and sale of
units, pursuant to the Company’s phased development model.
3. Outstanding Acquisition conditions precedent
The outstanding conditions precedent to the Acquisition are as follows:
- the approval of the board of directors of Balwin;
- the approval of Balwin shareholders;
- to the extent required, the approval of the South African competition authorities;
- the conclusion of an agreement between Balwin and Yaetsho Investments Proprietary Limited (“Yaetsho”),
recording the terms of Yaetsho’s participation in the proceeds derived by Balwin from the sale of units; and
- the approval by Balwin and the Waterval Management and Operating Company Proprietary Limited of the
standard township lease, the leasehold title in favour of unit purchasers and the memorandum of incorporation
of the residents’ associations to be formed.
4. Categorisation of the Acquisition
In terms of the JSE Listings Requirements, the Acquisition is classified as a Category 1 transaction and will require
Balwin shareholder approval. Accordingly, a circular will be posted to shareholders by no later than 31 May 2016
containing, inter alia, a notice of general meeting.
6 April 2016
Bedfordview
Sponsor
Investec Bank Limited
Date: 06/04/2016 11:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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