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Abridged pre-listing statement - Opening of offer, the listing of EPP on the Main Board of the JSE
Echo Polska Properties N.V.
(Incorporated in the Netherlands)
(Company number 64965945)
JSE share code: EPP
ISIN: NL0011983374
(“EPP” or “the company”)
ABRIDGED PRE-LISTING STATEMENT – OPENING OF OFFER TO INVITED INVESTORS TO
SUBSCRIBE FOR SHARES AND THE PRIMARY LISTING OF EPP ON THE MAIN BOARD OF THE JSE
Abridged pre-listing statement relating to:
- a private placement to raise the Rand equivalent of approximately EUR 100 million, with the right to upscale
depending on demand, by way of an offer for subscription to invited investors only for approximately 71.5 million
ordinary shares in the share capital of the company, at an issue price, payable in Rand, to be determined by
demand and at a EUR:ZAR exchange rate to be hedged by the company and as notified by the company to
investors following the close of the offer for subscription on Tuesday, 6 September 2016, and for which an
indicative issue price of EUR1.45 per ordinary share has been used in this abridged pre-listing statement (the
“private placement”); and
- the subsequent listing of all the issued ordinary shares of the company by way of a primary listing in the “Real
Estate – Real Estate Holdings and Development” sector on the Main Board of the exchange operated by the JSE
Limited (the “JSE”) (the “JSE listing”).
This abridged pre-listing statement is not an invitation to the public to subscribe for shares in the company, but
is issued in compliance with the JSE Listings Requirements, for the purpose of giving information to the public
in relation to EPP and to invited investors in relation to the private placement.
Invited investors will be contacted by and will receive application forms to participate in the private placement
in the South African market from the bookrunner, Java Capital. Invited investors who wish to participate in
the private placement in the European market are advised to contact the bookrunner for further instructions.
This announcement contains the salient information in respect of EPP, which is more fully described in the pre-listing
statement which will be made available to invited investors from today (the “pre-listing statement”). For a full
appreciation and understanding of EPP, the private placement and the JSE listing, the pre-listing statement should be
read in its entirety.
Terms defined in the pre-listing statement bear the same meaning in this abridged pre-listing statement.
1. Incorporation and nature of business
EPP was registered and incorporated in The Netherlands as a private limited liability company on 4 January
2016 and converted to a public company on 12 August 2016. The company’s financial year end is 31
December.
EPP is a real estate company that indirectly owns a portfolio of prime retail and office assets throughout Poland,
a dynamic Central and Eastern European (“CEE”) economy with a highly attractive real estate market.
On 1 June 2016, and pursuant to the Redefine transaction, Redefine Properties Limited acquired a 75% stake in
EPP’s issued ordinary share capital, subsequently reducing its shareholding to just under 50% through the on-
sale of EPP ordinary shares to a consortium of selected co-investors. The remaining approximately 25% of
EPP’s issued ordinary shares is held by Echo Prime Assets B.V., a wholly owned subsidiary of Echo Investment
S.A (“Echo”), a recognised market leader in Polish commercial and residential property development and
investment.
EPP was listed on the Euro MTF market of the Luxembourg Stock Exchange (“LuxSE”) on Tuesday, 30
August 2016, which constitutes a primary listing.
2. Listing on the JSE
The JSE has granted EPP a primary listing of all of its issued shares in the “Real Estate- Real Estate Holdings
and Development” sector on the Main Board of the JSE, under the abbreviated name “PolskProp” and JSE share
code “EPP”, with effect from the commencement of trade on Tuesday, 13 September 2016. This will be a
foreign inward listing. Pursuant to the listing on the JSE, EPP will have a dual primary listing on the LuxSE
and the JSE.
The JSE listing is not conditional on raising a minimum amount in terms of the private placement, but is subject
to the company having satisfied the requirements of the JSE Listing Requirements regarding the spread of
shareholders, being public shareholders holding not less than 20% of the issued ordinary share capital of the
company at the point of listing on the JSE.
3. Prospects
EPP has a high quality portfolio of Polish commercial properties with attractive and secure yields, tenanted by a
diverse range of primarily blue-chip global clients. With the predominantly retail portfolio located in one of the
most dynamic and fastest growing economies in Europe, experienced management and well reputed strategic
partners, EPP represents a compelling investment.
Already the largest listed Polish yielding property company, EPP’s goal is to become the dominant retail
landlord in Poland while targeting sustainable double digit annual growth in dividends per share in the short and
medium term through a combination of organic and acquisitive growth.
Organic growth will be achieved through growth opportunities that are already built into the EPP portfolio
including (i) filling of vacancies in newly developed properties; (ii) 22,000m2 of retail extensions to two of the
company’s existing retail centres that are currently underway; (iii) a 25% stake in ten assets subject to a right of
first offer (“ROFO”) in favour of EPP acquired by EPP (which entitles EPP to a 25% share in development
proceeds as well as a first right of offer to acquire such assets); (iv) a 70% stake in an 110 000m2 retail
development in Warsaw.
There is also the potential to increase retail rentals through a combination of the current high levels of retail
sales growth in Poland and the active asset management of EPP’s portfolio of dominant regional shopping
centres by a strongly incentivised, dedicated and proven executive management team who intend leveraging
EPP’s platform with retail tenants to achieve higher rentals.
In addition to organic growth, EPP’s executive management team has access to numerous earnings accretive
acquisitive opportunities, including through its strategic relationships with Echo and Griffin Real Estate, a
leading, dynamically developing investor operating in the CEE real estate market. These relationships provide
the company with a significant advantage in the identification and sourcing of high quality real estate assets.
EPP’s acquisition strategy will be focused on acquiring retail assets in strategic locations, allowing the company
to further leverage its portfolio and platform with retail tenants. In the office sector, EPP may selectively
acquire high quality, well located office assets in major Polish cities, let to strong international and domestic
tenants where the management team believes there is scope for further value uplift. EPP will pro-actively trade
office assets to ensure that its portfolio remains balanced and competitive in the long term while maintaining a
weighted average unexpired lease term in excess of four years. EPP will also closely monitor the logistics and
fulfilment centre sectors for acquisition opportunities that meet its strategic criteria.
In addition to opportunities for growth in distributions per share, the company believes that there are significant
opportunities for growth in underlying net asset value per EPP share. The Warsaw retail development, the
ROFO assets and the extensions to certain existing retail assets all represent the potential for (in some cases
substantial) enhancements in underlying net asset value of EPP given the costs at which they are being acquired
and/or developed relative to the anticipated valuation yields. Given the strength and growth of the Polish
economy (as well as the potential upgrading of Poland by FTSE from advanced emerging to developed market
status in the near future) the company also believes that there is the potential for further compression in Polish
commercial property yields, which would in turn result in an increase in the value of the EPP portfolio.
EPP’s listing on the JSE and LuxSE is anticipated to provide it with significantly improved access to
expansionary capital and provide existing and future shareholders with an opportunity to invest in a highly-
attractive European economy.
4. Directors
Names, age and nationality Business address Qualification Capacity
Hadley James Tyzack Dean ul. Konstruktorska 12 BSc (University of Chief executive officer
44 02-673 Warszawa Newcastle-upon-
British Poland Tyne), Property
valuation and
management
(Sheffield Hallam
University)
Maciej Adam Drozd ul. Konstruktorska 12 Master’s degree in Chief financial officer
51 02-673 Warszawa Philosophy and
Polish Poland Management
(university of
Warsaw), MBA
(University of
Illinois)
Robert Weisz Rubensstraat 66 MBA, CA, Fellow of Chairman, independent
66 1077 MZ the RICS (Royal non-executive director
Dutch Amsterdam Institute of Chartered
Surveyors)
Marek Marian Belka 17 Ciechocinska Ph.D (Economics); Independent non-executive
64 93-459 Lodz Professor (scientific director
Polish Poland title conferred by the
President of the
Republic of Poland)
Marc Wainer Redefine Place Executive chairman Non-executive director
67 2 Arnold Road of Redefine
South African Rosebank Properties. Over 40
Johannesburg years’ experience in
all aspects of real
estate
Andrew Joseph König Redefine Place BCom, B Acc, Non-executive director
48 2 Arnold Road CA(SA)
South African Rosebank,
Johannesburg
Maciej Dyjas Al. Jana Christiana Degrees in Non-executive director
52 Szucha 6, 00-582 Mathematics, IT and
German Warszawa Management from
University of
Warsaw and
University of
Stuttgart
Nebil Senman Al. Jana Christiana Chartered Non-executive director
44 Szucha 6, 00-582 Surveyor(RICS),
German/Turkish Warszawa post-graduate
diploma in real estate
management from
EBS, Master's degree
in Civil Engineering
and Business
Administration from
TU Berlin, Master's
degree in
International
Management from
Names, age and nationality Business address Qualification Capacity
ESCP-EAP
Dionne Traci Hirschowitz 51 West Street BCom; LLB Independent non-executive
48 Houghton Estate director
South African Houghton
Johannesburg
Andrea Philippa Steer Dienmermere 25 B Com; LLB, Independent non-executive
45 1112 TC Diemen Attorney of the High director
South African/Irish The Netherlands Court of South
Africa, Solicitor of
England and Wales
Peter Joost Rudolf Driessen Niueweweg 2 MSc in Law Independent non-executive
69 1251 LJ Laren director
Dutch The Netherlands
5. Asset management
EPP’s asset and property management function is undertaken internally by a strongly incentivised, dedicated
and proven management team (EPP employs circa 100 employees), subject to strategic oversight by Echo. Each
management team member has 15-20 years’ experience in asset management covering all areas.
6. Summarised forecast information
Set out below are the summarised forecast statements of comprehensive income of the EPP group
(“summarised forecasts”) for the period from incorporation to 31 December 2016 and the year ending 31
December 2017 (“forecast periods”). The summarised estimate and forecast information is based on the
assumption that the private placement is fully subscribed and that EUR 100 million is raised through the issue
of approximately 71.5 million private placement shares in the company at an issue price of EUR1.45 per private
placement share.
The forecasts include actual figures from incorporation to 31 May 2016 and forecast figures for the duration
remainder of the forecast periods.
The forecasts have been prepared in compliance with IFRS and in accordance with EPP’s accounting policies.
Forecast for the
period from Forecast for the
incorporation to year ending
31 Dec 2016 31 Dec 2017
Number of shares in issue 585 999 168 585 999 168
Weighted average number of shares in issue and to be issued 468 298 631 585 999 168
Basic and diluted basic earnings per share (EUR cents) 14.37 10.33
Headline and diluted headline earnings per share (EUR cents) 13.26 10.89
Distributable income per share (before withholding tax) (EUR
cents) 5.85 10.84
Distributable income per share (after withholding tax of 5%)
(EUR cents) 5.56 10.30
The forecasts, including the assumptions on which they are based and the financial information from which they
are prepared, are the responsibility of the directors of EPP. The forecasts must be read in conjunction with the
independent reporting accountants’ limited assurance report, which is presented in Annexure 14 of the pre-
listing statement.
The figures set out above are extracted from the detailed estimate and forecast for the period from incorporation
to 31 December 2016 and the year ending 31 December 2017 and have been reported on by the independent
reporting accountant, Ernst & Young Inc., Registered Auditors. The detailed forecast, the independent reporting
accountants’ limited assurance report and the assumptions on which the detailed forecast are based, are set out
in the pre-listing statement.
7. Details of the private placement, underwriting and investor pre-commitments
A private placement to raise the Rand equivalent of approximately EUR 100 million, with the right to upscale
depending on demand, is being undertaken by way of an offer, to invited investors only, for subscription for
approximately 71.5 million ordinary shares in the share capital of the company, at an issue price, payable in
Rand, to be determined by demand and at a EUR:ZAR exchange rate to be hedged by the company and as
notified by the company to investors following the close of the offer for subscription on Tuesday, 6 September
2016, and for which an indicative issue price of EUR1.45 per ordinary share has been used in this abridged pre-
listing statement.
Applications must be for a minimum subscription of R1 000 000 per investor acting as principal.
The private placement has been underwritten by an underwriting consortium in an aggregate amount of
EUR 100 million.
Prior to the issue of this abridged pre-listing statement, EPP received binding commitments from new investors
to subscribe for circa R1 billion of EPP shares (circa €62 million) at an issue price of EUR1.45 per ordinary
share.
This abridged pre-listing statement primarily concerns invited investors who may apply to subscribe for private
placement shares that will be listed in the South African Market. Invited investors who wish to apply for private
placement for shares to be listed in the European market are advised to contact the bookrunner for further
instructions
8. Purposes of the private placement
It is considered that EPP will present an attractive opportunity to South African investors to invest in a foreign-
domiciled but local-listed alternative to South African property investments. It is the view of the board of
directors of EPP that South African property investors who have enjoyed strong and stable returns from the
South African real estate sector over the last few years now see comparatively attractive value in carefully
selected opportunities in real estate markets outside South Africa. Accordingly, EPP is seeking a listing on the
JSE to broaden its investor base, source additional capital to fund growth aspirations, and to:
- provide investors, both institutional and private, with an opportunity to participate over the long-term in
the income streams and future capital growth of the company;
- enhance potential investors’ awareness of the company;
- improve the depth and spread of the shareholder base of the company, thereby improving liquidity in
the trading of its securities;
- raise the Rand equivalent of approximately EUR 100 million, with the right to upscale depending on
demand; and
- provide invited investors with an additional market for trading the company’s ordinary shares.
The shares to be issued in terms of private placement will be allotted subject to the provisions of the company’s
articles of association and will rank pari passu in all respects, including dividends, with all existing issued
ordinary shares in the company.
There are no convertibility or redemption provisions relating to any private placement shares.
The private placement shares will not be issued in certificated form.
No fractions of private placement shares will be offered.
9. Salient dates and times
2016
Opening date of the private placement at 09:00 on Wednesday, 31 August
Closing date of the private placement at 12:00 on Tuesday, 6 September
Results of the private placement released on SENS and on the LuxSE Tuesday, 6 September
website on
Notification of allotments to successful invited investors from Wednesday, 7 September
Results of private placement published in the press on Thursday, 8 September
Listing of the private placement shares on the Euro-MTF market at the
commencement of trade on Tuesday, 13 September
Accounts at CSDP or broker updated and debited in respect of Tuesday, 13 September
dematerialised shareholders
Notes
1 All references are to local dates and times in South Africa. These dates and times are subject to amendment. Any such amendment
will be released on SENS and the LuxSE website and published in the press.
2 Invited investors must advise their CSDP or broker of their acceptance of the private placement shares in the manner and cut-off
time stipulated by their CSDP or broker.
3 CSDPs effect payment on a delivery-versus-payment basis.
10. Application of proceeds
The proceeds from the private placement will be used by EPP to settle the costs associated with the private
placement and the listings on the LuxSE and the JSE, as well as to pay advisory fees and partially fund the
purchase of five additional properties as more fully detailed in the pre-listing statement.
11. Availability of the pre-listing statement
Copies of the pre-listing statement may be obtained during normal business hours on business days from
Wednesday, 31 August 2016 to Tuesday, 13 September 2016 at the following addresses, as well as on the
company’s website at www.echo-pp.com :
• Echo Polska Properties N.V.
Prins Bernhardplein 200, 1097 JB Amsterdam, The Netherlands
• Java Capital Proprietary Limited
6A Sandown Valley Crescent, Sandown, Sandton, 2196
Attention: Kevin Joselowitz/Tamsyn de Beer
email: EPP@javacapital.co.za
• M Partners
56, rue Charles Martel L-2134, Luxembourg
• Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001.
31 August 2016
Corporate advisor, JSE sponsor and bookrunner in respect of the private placement
LuxSE listing agent
Independent reporting accountants and auditors
Date: 31/08/2016 07:26:00 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.