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Subscription by way of both a General and Specific Issue of Shares for Cash by Various Parties
SAFARI INVESTMENTS RSA LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2000/015002/06
Approved as a REIT by the JSE Limited
Share code: SAR
ISIN number: ZAE000188280
(“Safari” or “the Company”)
SUBSCRIPTION BY WAY OF BOTH A GENERAL AND SPECIFIC ISSUE OF
SHARES FOR CASH BY VARIOUS PARTIES
1. Introduction
1.1. Shareholders are advised that the Company has
entered into various subscription agreements
whereby the Company will issue in aggregate 96 381
576 ordinary shares for cash for a total amount of
R 726 500 000 (“the Subscription”).
1.2. The Subscription will be executed in two tranches,
whereby the first tranche of 27 327 347 shares will
be issued at a price of R7.50 per share for a total
amount of R204 955 103 (“General Issue”) in terms
of the Company’s general authority to issue shares
for cash which was approved by shareholders at the
Company’s annual general meeting which was held on
27 July 2016.
1.3. The second tranche of the Subscription will consist
of a total number of 69 054 229 shares, of which
32 672 653 are to be issued at a price of R7.50 per
share and the remainder of 36 381 576 shares are to
be issued at a price of R7.60. The total
subscription price will be for an amount of R521 544
898 (“Specific Issue”). The Specific Issue will be
subject to regulatory approvals including, inter
alia, those required in terms of the Listings
Requirements of the JSE Limited and the Companies
Act, 2008, No. 71 of 2008, as amended, having been
obtained.
1.4. As part of the Specific Issue, WDH Investment
Holdings Proprietary Limited (“WDBH”) will
subscribe for 9 210 526 shares at a price of R7.60
for an amount of R70 000 000. In terms of the
subscription agreement between the Company and WDBH,
the Company will provide a loan to WDBH for
R50 000 000 under by the following terms and
conditions:
1.4.1 The interest rate applicable will be the Prime
Interest Rate of Absa Bank + 0.5% compounded
monthly in arrears;
1.4.2 The loan with interest will be service by
installments equal to the full dividend of
WDBH’s total shareholding in Safari, being
13 923 313 shares;
1.4.3 The total shareholding of WDBH in Safari,
being 13 923 313 shares, will be held as
surety for the fulfilment of WDBH’s repayment
obligations; and
1.4.4 The duration of the loan will be 7 years from
date of issuing the new shares in terms of the
subscription agreement with WDBH and any
outstanding balance at the end of the duration
will be settled in full.
2. Rationale
The Rationale for the Subscription is:
2.1 enable Safari to settle most of its existing debt
which will result in lower gearing and a
significant saving on interest expense;
2.2 to provide access to additional sources of capital
in order to support continued expansion into
existing and new markets as well as to fund
Safari’s current development pipeline;
2.3 enable Safari to preserve its cash reserves which
may be used for organic growth or further
acquisition purposes;
2.4 enhance the liquidity and tradability of ordinary
Safari shares on the JSE through greater spread
and diversity of investors through the expansion
of its share capital;
2.5 enhance Safari’s public profile in the southern
African markets; and
2.6 enable Safari to accelerate its expansion on
existing centres in order to capture the regional
markets.
3. Subscribing Parties
3.1 The subscriber for the shares to be issued in terms
of the General Issue is K2016426774 (South Africa)
Proprietary Limited, trading as U-REIT Holdings (“U-
REIT”).
3.2 The subscribers for the shares to be issued in terms
of the Specific Issue are U-REIT, Stanlib Asset
Management Limited, Grindrod Asset Management
Proprietary Limited, WDBH, the BMJ Trust and
Safarihold Proprietary Limited.
4. Pro forma financial effects
4.1. The pro forma financial effects set out below have
been prepared for purposes of assisting the
Company’s shareholders to assess the impact of the
Subscription on the earnings per share (“EPS”),
diluted EPS, headline earnings per share (“HEPS”),
diluted HEPS, net asset value per share (“NAV”) and
tangible net asset value per share (“TNAV”).
4.2. It is assumed for purposes of the pro forma financial
effects that the Subscription took place with effect
from 1 April 2015 for purpose of EPS, diluted EPS,
HEPS and dilution HEPS and at 31 March 2016 for
purposes of NAV and TNAV.
4.3. The pro forma financial effects have been prepared
for illustrative purposes only and, because of their
nature, may not fairly present the Company’s
financial position, results of its operations,
changes in equity or cash flows.
4.4. The pro forma financial effects are the
responsibility of the Board and have not been
reviewed by the auditors of the Company.
Unadjusted Pro forma Pro forma Percen
financial adjustments financial tage
information (2) information change
(1) R R
R
EPS 46.0 (3.5) 42.5 -8%
Diluted EPS 44.8 (2.3) 42.5 -5%
HEPS 47.3 (4.0) 43.3 -8%
Diluted HEPS 46.1 (2.8) 43.3 -6%
NAV (cents) 854.1 (40.5) 813.6 -5%
TNAV (cents) 854.1 (40.5) 813.6 -5%
Ordinary shares 182,182,319 96,381,576 278,563,895 53%
in issue
Weighted average 177,386,298 101,177,597 278,563,895 57%
number of shares
in issue
1. The "unadjusted financial information" column is extracted
from the Safari audited consolidated annual financial
statements for the year ended 31 March 2016.
2. The "Pro forma adjustments" column represents the
Subscription, assuming that 96,381,576 new Safari shares are
issued.
The effect of the Subscription is based on the terms as set
out in this announcement whereby a total of R710,293,307
will be used for the repayment of interest bearing
liabilities.
It is assumed that once-off transaction costs of R16,2
million will be paid and set off against the Subscription.
The "Pro forma adjustments" column represents the interest
reduction assuming an interest rate of 9,45% (prime lending
rate less 1.05%).
In terms of the share subscription agreement with WDBH
Safari will be entitled to interest income which will incur
at an interest rate of 11% (prime lending rate plus 0.05%)
3. There are no other post balance sheet events which
necessitate adjustment to the pro forma financial
information.
4. All the adjustments are of a continuing nature except for
once-off transaction costs.
5. Safari General Meeting
5.1. A circular, including a notice convening the Safari
General Meeting, detailing the terms of the Specific
Issue as well as the action required of the Company's
shareholders will be posted to shareholders in due
course.
5.2. Further announcements concerning the relevant dates,
including the date of the Safari General Meeting,
pertaining to the Specific Issue will be released
in due course.
Pretoria
19 October 2016
Corporate Advisor and Sponsor
PSG Capital Proprietary Limited
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