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SAFARI INVESTMENTS (RSA) LIMITED - Subscription by way of both a General and Specific Issue of Shares for Cash by Various Parties

Release Date: 19/10/2016 16:00
Code(s): SAR     PDF:  
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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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