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Acquisition of Property Portfolio and Renewal of Cautionary
TREMATON CAPITAL INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/008691/06)
JSE share code: TMT
ISIN: ZAE000013991
(“Trematon” or the “Company”)
ACQUISITION OF PROPERTY PORTFOLIO FROM REDEFINE PROPERTIES LIMITED
RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Trematon shareholders are referred to the cautionary announcements released on SENS on 14 July, 29
August and 17 October 2016 and are advised that Trematon has, via Arbitrage Property Fund Proprietary
Limited, trading as Aria Property Fund, its 67% held subsidiary (“Aria”), entered into agreements
(“Acquisition Agreements”) with Redefine Properties Limited (“Redefine” or “the Vendor”) for the acquisition
of a total of 7 property letting enterprises together with their related immovable properties (“the Properties”)
for an aggregate purchase consideration of R614 100 000 (“the Acquisition”). The Properties are acquired in
one indivisible transaction. Redefine is a property entity and is listed on the JSE Limited (“JSE”)
2. Rationale for the Acquisition
Trematon is a diversified investment holding company with various investments in property, the West Coast
casino licence, a schools business and minority shares in various listed and unlisted companies. The
Acquisition is in line with Trematon’s strategy of actively pursuing yield enhancing investment opportunities
and leveraging its expertise in the property field.
After implementation of the Acquisition, Aria’s assets will increase to 21 assets with an approximate marketvalue
of R1.18 billion. The Aria portfolio, post implementation, will have a 90% geographical weighting
towards the Western Cape in terms of asset value and it is the intention of Aria to retain this geographical
bias moving forward in its strategy of building an institutional quality, Western Cape based property fund.
The Acquisition will provide Aria with a well balanced mix of income producing assets with positive income
growth potential and the opportunity to add value through ad hoc redevelopment projects and active hands
on asset management.
3. Consideration for the Acquisition
The aggregate purchase consideration for the Acquisition of the Properties is R614 100 000 (the “Purchase
Consideration”) and is allocated as set out in paragraph 4 below. The Purchase Consideration is payable in
cash and will be satisfied as follows:
3.1 Trematon will pay Redefine R514 100 000, which will be funded by a bank loan from a reputable
bank or financial institution (“Bank Loan”); and
3.2 Trematon will obtain a vendor loan from Redefine in the aggregate amount of R100 000 000
(“Vendor Loan”) on the following terms:
3.2.1 The Vendor Loan will be divided and allocated on a per Property basis;
3.2.2 The Vendor Loan will bear interest at the prime rate of interest plus1% from time to time;
3.2.3 The term of the Vendor Loan will, in respect of the amount allocated to a Property, be 12
months from the date of transfer of such Property; and
3.2.4 The term of the Vendor Loan can be extended at the request of Arbitrage for a further 12
month period at an interest rate of the prime rate of interest plus 3%.
4. Details of the Properties
The Properties comprise the immovable properties, the buildings and fixed assets thereon, the lease
agreements and service contracts in respect thereof and the movable assets, owned by the Vendor, therein.
Details of each Property, including inter alia the location, sector, gross lettable area (“GLA”), gross average
rental per square metre and purchase price attributed to the Properties, are set out below. The parties have
agreed that the Vendor will reimburse Trematon the amount of R7 800 000 for capital expenditure costs in
respect of three of the Properties, which capital expenditure costs are detailed below and will be payable by
the Vendor upon registration of transfer of each of the relevant Properties.
Building Property Title Deed Allocated Sector GLA Average Reimbursed
2
Description Number Purchase m Rental Capital
2
Consideration /m Expenditure
Costs
Pier Place Erf 170 T13106/2011 R170 000 000 Office 14 746 Vacant
Roggebaai,
City of Cape
Town
Berg River The T53659/2010 R100 000 000 Industrial 35 664 33.67 3 800 000
Park Remaining
Extent (“RE”)
of Erf 21279
Paarl
12 Nourse Erf 99971 T55386/2010 R34 000 000 Industrial 10 581 34.34 1 000 000
Avenue Cape Town
at Epping
Edgars The RE of R16 500 000 Retail 2 606 55.39
Wynberg Erf 91503 T53598/2010
Cape Town
at Wynberg
Standard The RE of T55240/2010 R15 100 000 Retail 1 199 148.10
Bank Erf 1549 &
George RE of Erf
1552 George
Glenashley Erf 527 T28444/2010 R27 000 000 Mixed 2 805 138.35
Views Glenashley use
Maynard The RE of T58415/2010 R251 500 000 Retail 23 178 124.39 3 000 000
Mall Erven
67925,
67947,
67949,
67957,
67959,
67960,
67958, and
92089 and
Erf 67948 &
Erf 92087
Cape Town
at Wynberg
Total R614 100 000
5. Effective Date
The effective date of the Acquisition is the first business day after the date of fulfilment of all of the conditions
precedent as detailed in paragraph 6 below (“Effective Date”). The parties to the Acquisition Agreements will
procure that the dates of transfer of the Properties will be as soon as practicably possible after the Effective
Date and transfer, in respect of all of the Properties other than Pier Place, is expected to take place on or
before 1 January 2017 (“Properties Escalation Date”). The escalation date for Pier Place is 1 March 2017
(“Pier Place Escalation Date”) Should transfer of any Property not take place by the Properties Escalation
Date or the Pier Place Escalation Date, as the case may be, the purchase consideration in respect of that
Property shall escalate monthly by 0.667% until transfer is effected.
6. Conditions precedent
The Acquisition is subject to, inter alia, the fulfilment or waiver of the conditions precedent that:
6.1 the parties shall have concluded a loan agreement in respect of the Vendor Loan;
6.2 regulatory approvals necessary for a transaction of this nature, including but not limited to, the
approval by the JSE and South African Competition authorities shall have been obtained; and
6.3 Trematon shareholders in general meeting shall have approved the Acquisition Agreements.
7. Value of and the profits attributable to the net assets
The value of the net assets that are the subject of the Acquisition is R614 100 000.
The annual property net income attributable to the assets that are the subject of the Acquisition was R42 869
493 for the year ended September 2016 and excludes Pier Place which will be predominantly vacant. The
Acquisition will initially have a negative impact on earnings as Pier Place is vacant on acquisition, however
once Pier Place is fully tenanted it is expected to enhance earnings. The Acquisition will have no initial
impact on net asset value, but is expected to have a positive impact in future.
8. Warranties
The parties have given each other the warranties and indemnities that are usual in property transactions of
this nature.
9. Categorisation
The Acquisition is categorised as a Category 1 transaction in terms of the Listings Requirements of the JSE
and requires the approval of Trematon shareholders in general meeting. A circular incorporating a notice
convening the general meeting and setting out information regarding the Acquisition is being prepared and
will be despatched to Trematon shareholders in due course.
10. Renewal of the Cautionary Announcement
Shareholders are advised that, following this announcement, Trematon is still involved in further discussions
which may have a material effect on the price of the Company’s securities and shareholders are accordingly
advised to continue to exercise caution when dealing in the Company’s securities.
Cape Town
31 October 2016
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Legal Advisor:
Bernadt Vukic Potash & Getz
Date: 31/10/2016 08:00:00 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
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