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Posting of Circular, Notice of General Meeting, Disclosure of Forecast Financial Information & Renewal of Cautionary
Stor-Age Property REIT Limited
Incorporated in the Republic of South Africa
Registration number 2015/168454/06
Share code: SSS ISIN ZAE000208963
(Approved as a REIT by the JSE)
(“Stor-Age” or “the Company”)
POSTING OF CIRCULAR, NOTICE OF GENERAL MEETING, DISCLOSURE OF FORECAST FINANCIAL
INFORMATION AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcement released by the Company on SENS on Tuesday, 5
September 2017 relating to the proposed acquisition by Stor-Age of 97.3% of the issued share capital of
Betterstore Self Storage Holdings Limited (“Storage King” or, together with its subsidiaries “the Storage
King Group”) from CS Capital Partners III, LP, a fund managed by Cabot Square Capital LLP, and the
management of the Storage King Group, (“the Proposed Transaction”).
2. POSTING OF CIRCULAR AND NOTICE OF GENERAL MEETING
Shareholders are hereby advised that Stor-Age has today, Monday, 18 September 2017, posted a circular
(“the Circular”) to Stor-Age shareholders, containing full details of the Proposed Transaction, including, inter
alia, forecast financial information in respect of the Storage King Group and a notice of the general meeting.
Notice is hereby given that a general meeting of shareholders of Stor-Age (the “General Meeting”) will be
held at 09h00 on Tuesday, 17 October 2017 at Investec Bank Limited (36 Hans Strijdom Avenue Lane, Cape
Town City Centre, Cape Town, 8001) for the purposes of considering and, if deemed fit, passing, with or
without modification, the following resolutions, which are set out in the notice:
- the approval of the Proposed Transaction as a category one transaction;
- authority to issue shares as required in terms of section 41(3) of the Companies Act; and
- authority of the directors of Stor-Age to do all such things and sign all such documentation as is
necessary to give effect to the Proposed Transaction.
3. IMPORTANT DATES AND TIMES
2017
Last day to trade to be eligible to vote at the General Meeting Tuesday, 3 October
Record date to be eligible to attend and vote at the General Meeting Friday, 6 October
Last day and time to lodge forms of proxy with the Transfer Secretaries by
09h00 on (note 2) Friday, 13 October
General Meeting to be held at 09h00 on Tuesday, 17 October
Results of General Meeting published on SENS on Tuesday, 17 October
Notes:
1. All times referred to in this announcement are local times in South Africa and are subject to amendment. Any such
amendment will be released on SENS.
2. If you have elected to be represented by a proxy at the General Meeting, you are requested to complete and return
the form of proxy (attached to the Circular) in accordance with the instructions contained therein and lodge it with, or
post it to, the Transfer Secretaries so as to be received by them no later than 09h00 on Friday, 13 October 2017 for
administrative purposes or thereafter to the Chairman of the General Meeting by hand by no later than the time at
which voting at the General Meeting is due to commence.
4. FORECAST FINANCIAL INFORMATION IN RESPECT OF THE STORAGE KING GROUP
Set out below are the forecast statements of comprehensive income of the Storage King Group and the
Crewe property (“the Forecasts”) on a standalone basis for the five months ending 31 March 2018 and the
12 months ending 31 March 2019 (“the Forecast period”). The Forecasts have been prepared on the
assumption that the effective date of the acquisition of the Storage King Group is 31 October 2017 and that
the effective date for the purchase of the Crewe property is 1 December 2017.
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 Stor-Age (“the Directors”). The Forecasts have
been reviewed and reported on by the independent reporting accountants, KPMG Inc., and their unmodified
report thereon is available for inspection at the registered office of Stor-Age and the transaction sponsor
and has been reproduced in the Circular.
The Forecasts presented in the table below have been prepared in accordance with Stor-Age’s accounting
policies and in compliance with International Financial Reporting Standards.
Summarised notes and assumptions in relation to the Forecasts are set out below. Full notes and
assumptions have been included in the Circular.
Forecast statements of comprehensive income in respect of the Storage King Group and the Crewe property
Crewe Forecast for Crewe Forecast for
Forecast for Forecast for
property for the 12 property for the 12
the five the period
the four months the 12 months
months ending (incl.
months ending (excl. months ending (incl.
ending Crewe)
ending Crewe) ending Crewe)
R'000 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-19 31-Mar-19 31-Mar-19
Property revenue
- Rental income 59 529 3 292 62 821 155 314 11 514 166 828
- Other income 12 187 139 12 326 31 127 420 31 547
Direct property costs (24 819) (1 338) (26 157) (62 406) (4 196) (66 602)
Net property operating income 46 897 2 093 48 990 124 035 7 738 131 773
Other revenue 559 - 559 1 374 - 1 374
Administration expenses (13 041) - (13 041) (32 371) - (32 371)
Operating profit 34 415 2 093 36 508 93 038 7 738 100 776
Fair value adjustments - financial
(8 750) - (8 750) (21 688) - (21 688)
instruments
Interest income 10 459 2 003 12 462 24 905 4 760 29 665
Interest expense (6 690) (3 986) (10 676) (17 335) (9 668) (27 003)
Profit before taxation 29 433 110 29 543 78 920 2 830 81 750
Taxation expense - - - - - -
Profit for the period 29 433 110 29 543 78 920 2 830 81 750
Profit for the period attributable to:
- Shareholders of the parent 28 620 107 28 727 76 738 2 752 79 490
- Non-controlling interests 814 3 817 2 182 78 2 260
Distributable earnings 37 370 107 37 477 98 426 2 752 101 178
Summarised notes and assumptions
1. The Forecasts are based on analysis of historical information, contracts and information provided by the
directors and management of the Storage King Group and independent property valuers (Cushman &
Wakefield LLP).
2. The properties underlying the Forecasts comprise eight freehold properties and five leasehold properties
situated throughout England (“the Core Portfolio”) and the Crewe property.
3. The Forecasts do not include any adjustments to the fair values of the Core Portfolio and the Crewe
property that may occur during the Forecast period.
4. Uncontracted revenue comprises 14.5% and 48.7% of basic rental revenue for the five months ending
31 March 2018 and 12 months ending 31 March 2019.
5. Current vacant space has been forecast on a property-by-property basis and has been assumed to
remain vacant unless it is deemed probable that such space will be let, in which case rental is forecast at
prevailing market rates. The maximum forecast occupied space per property, assuming full fit-out of
gross lettable area (GLA), ranges between 71% and 90% (average of 85% for the Core Portfolio and the
Crewe property).
The forecast occupancy for the Core Portfolio is 78.3% and 80.2% at 31 March 2018 and 31 March 2019
respectively. The forecast occupancy for the Crewe property is 62.3% and 71.7% at 31 March 2018 and
31 March 2019 respectively.
6. An assumed average exchange rate of ZAR:GBP of R17.25:£1.00 for the five months ending 31 March
2018 and R17.68:£1.00 for the 12 months ending 31 March 2019 has been used.
7. The conditions precedent specified in the agreement in respect of the Crewe property are assumed to
be met by on 30 November 2017, and therefore, the income and expenditure from the Crewe property
has been included in the Forecasts from this date.
8. No unforeseen market and economic factors will affect the tenant’s ability to meet their commitments in
terms of lease agreements that have been included in the Forecasts.
9. The conditions precedent specified in the share purchase agreement (“SPA”) in respect of the Core
Portfolio will have been met by the effective date, and therefore, the risks and rewards of ownership will
have transferred to Stor-Age by this date. As a result, Stor-Age will be able to consolidate 100% of the
income and expenditure from the Storage King Group from the effective date.
The conditions precedent specified in the SPA in respect of the Crewe property are assumed to be met
by on or about 30 November 2017, and therefore, Stor-Age will be able to consolidate 100% of the
income and expenditure from the Crewe property from this date.
10. 78.079 million new Stor-Age Shares are assumed to be issued at an assumed issue price per share of
R11.60, together with other available internal cash resources to the extent required, for the purpose of
funding the initial purchase consideration. A further 0.841 million new Stor-Age shares are assumed to
be issued for the purchase of the Crewe property.
11. The Forecasts assume that the Company will enter into interest rate swap to fix up to 80% of Storage
King’s GBP-denominated debt for a period of 5 years. The all-in cost of the debt facility of £25 million is
assumed to be 3.75% per annum.
5. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement released by the Company on SENS on 8 June
2017 and the subsequent renewals of the cautionary dated 21 July 2017 and 5 September 2017 regarding
the proposed acquisition by Stor-Age of DanCor Properties Proprietary Limited (“the DanCor Acquisition”),
unrelated to the Proposed Transaction.
Shareholders are advised that, notwithstanding the fact that Forecasts in respect of the Storage King Group
has now been released on SENS, given that discussions remain ongoing in respect of the DanCor
Acquisition, shareholders are advised to continue to exercise caution when dealing in their Stor-Age shares
until a further announcement is made in this regard.
Johannesburg
18 September 2017
Financial Advisor and Transaction Sponsor
Investec Bank Limited
Sponsor
Questco Corporate Advisory Proprietary Limited
Independent Reporting Accountants
KPMG Inc.
Date: 18/09/2017 03:08:00 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.
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