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Disposal by Pivotal of shares in Setso Property Fund
THE PIVOTAL FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/030215/06)
JSE share code: PIV ISIN: ZAE000196440
(“Pivotal” or “the company”)
ACQUISITION BY SETSO HOLDCO PROPRIETARY LIMITED OF SHARES IN SETSO PROPERTY FUND
INTRODUCTION AND RATIONALE
Pivotal shareholders are referred to the announcement released on the Stock Exchange News Services (“SENS”) of
the JSE Limited (“JSE”) on 30 August 2016 relating to the proposed acquisition by Redefine Properties Limited
(“Redefine”) of the entire issued share capital of Pivotal by way of a scheme of arrangement in terms of section 114 of
the Companies Act, No. 71 of 2008, as amended (“Companies Act”), to be proposed by the board of directors of
Pivotal between Pivotal and the Pivotal shareholders (“scheme”) and the posting of the circular incorporating the
notice of the general meeting announcement (“the circular”) released on SENS on 31 October 2016.
Pivotal had previously resolved to implement a broad-based black economic empowerment (“B-BBEE”) transaction in
respect of the properties described in the property portfolio details below (“the Setso portfolio”), with a view to
facilitating the establishment of a substantial B-BBEE-owned property fund (“the Setso B-BBEE transaction”).
Consequently, it was agreed with Redefine that the conclusion of the Setso B-BBEE transaction would be a condition
precedent to the scheme.
Pivotal shareholders are advised that Pivotal has concluded a transaction with Setso Holdco Proprietary Limited
(“Setso Holdco”) in terms of which Setso Holdco has acquired 100% of the issued share capital of Setso Property
Fund Proprietary Limited (“Setso”), a subsidiary of Pivotal (“the Setso transaction”).
ARC REAL ESTATE
Setso Holdco is being acquired by African Rainbow Capital Proprietary Limited and Signature Investment Holdings
Proprietary Limited whom have recently entered into a joint venture, ARC Real Estate, with a specific investment
mandate relating to empowerment linked property transactions.
SALIENT TERMS OF THE SETSO TRANSACTION
In terms of the Setso transaction, Setso Holdco has acquired 100% of Setso’s issued share capital with effect from
1 December 2016 (the “effective date”).
Setso Holdco has secured capital of approximately R1.207 billion (“Setso capital”), which includes R410 million of
long-term debt funding from Pivotal (“Pivotal loan”). Setso Holdco will utilise the Setso capital to capitalise Setso
through a combination of subscribing for new equity in Setso as well as advancing debt funding to Setso. Setso will
utilise the Setso capital to discharge its obligations to Pivotal and Pivotal group entities of approximately R1.207 billion
in cash. The cash proceeds of R1.207 billion received by Pivotal will be used to advance the Pivotal loan and the
balance, being approximately R797 million, will be used by Pivotal to pay down existing debt facilities.
The Setso transaction remains conditional upon the conclusion of administrative arrangements and procedural
statutory requirements necessary to give effect to the Setso transaction.
The Setso transaction includes warranties, undertakings and indemnities which are normal for an acquisition of this
nature.
DETAILS OF THE SETSO PORTFOLIO
Details of the properties in the Setso portfolio, including property name, address, geographical location, sector, gross
lettable area, weighted average rental per square metre, the net property income for the period 1 September 2015 to
31 August 2016 and the Setso transaction values as at 1 December 2016 attributed to the properties are as follows:
Property name Address and geographical Total Gross Attributable Setso
(% ownership) location GLA (m2) rental net property transaction
per m2 income (R) values (R)
OFFICES
55 Hyde Park (100%) 55 Sixth Road, Hyde Park, 2 191 125 2 872 490 40 879 941
Gauteng
Avanti Office (100%) 35 Carl Cronje Drive, Tyger 8 600 170 12 011 446 152 336 714
Valley, Cape Town
Carnation Place (100%) Constantia Boulevard, 4 541 143 8 818 952 78 954 618
Roodepoort, Gauteng
Detnet (66%) Centenary Road, 2 074 135 2 714 760 30 179 357
Modderfontein, Gauteng
GM Hatfield (25%) Cnr Francis, Baard and Jan 2 958 204 1 021 499 12 991 834
Shoba Street, Hatfield
Hertford (A – E) (33%) Bekker Road, Vorna Valley, 28 852 117 5 886 450 59 661 883
Midrand, Gauteng
Monte Circle (18%) Monte Circle Office Park, 5 095 150 1 764 430 18 925 342
Fourways, Gauteng
Valley View Office Park 680 Joseph Lister Street, 6 943 111 9 280 560 65 779 032
(100%) Roodepoort, Gauteng
Wanderers Office Park, 52 Corlett Drive, Illovo, 7 771 123 12 483 208 140 656 917
The Oval (100%) Gauteng
Wanderers Office Park, 52 Corlett Drive, Illovo, 4 444 146 8 880 504 102 224 032
The Pavillion (100%) Gauteng
Total Office 73 469 - 65 734 299 702 589 671
RETAIL
Chilli Lane Shopping Cnr Rivonia and Leeuwkop 13 318 138 20 397 699 183 103 711
Centre (100%) Roads, Sunninghill, Gauteng
Chilli on Top Shopping Cnr Rivonia and Leeuwkop 5 140 112 4 505 942 74 251 068
Centre (100%) Roads, Sunninghill, Gauteng
The Square @ Cnr Klei & Klip Roads, 6 521 158 10 596 242 116 273 694
Farrarmere (100%) Farrarmere, Benoni, Gauteng
Total Retail 11 661 - 35 499 883 373 628 474
DEVELOPMENTS
Hertford Office Park Bekkers Road, Vorna Valley, 12 606 - - 41 681 346
(33%) Buildings F & G Midrand
Monte Circle Office Park Montecasino Boulevard, 4 435 - - 10 461 860
(18%) – Building B Fourways
Total Developments 17 041 - - 52 143 206
VACANT LAND
Constantia Corner William Nicol Road North, - - - 7 100 000
(100%) Constantia Kloof, Roodepoort
Hertford Office Park Bekkers Road, Vorna Valley, - - - 21 473 833
(33%) Midrand
Monte Circle Office Park Montecasino Boulevard, - - - 24 965 669
(18%) Fourways
Monte Place (Signature Cnr Montecasino Boulevard, - - - 25 384 233
Square) (20%) William Nicol Road, Fourways
Total Vacant Land - - - 78 923 735
Total 102 171 - 101 234 182 1 207 285 086
VALUATION
The board of directors of Pivotal is satisfied that the aggregate value attributed to the Setso portfolio, and the
individual values attributed to each of the properties forming part of the Setso portfolio, for purposes of the
determination of the amounts payable in terms of the Setso B-BBEE transaction, as summarised above, are in line
with the directors own assessment of the aggregate value of the Setso portfolio and the individual values of each of
the properties forming part of the Setso portfolio. The directors of the company are not independent and are not
registered as professional valuers or as professional associate valuers in terms of the Property Valuers Profession
Act, No 47 of 2000.
CATEGORISATION
The Setso transaction is classified as a category 2 transaction in terms of the JSE Listings Requirements and
accordingly does not require the approval of Pivotal shareholders.
22 December 2016
Sponsor
Java Capital
Legal advisor
Cliffe Dekker Hofmeyr
Date: 22/12/2016 11:08:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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