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Update, appointment of joint sponsor and withdrawal of cautionary
FORTRESS REIT LIMITED
(previously Fortress Income Fund Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes: FFA ISIN: ZAE000248498
FFB ISIN: ZAE000248506
Bond Company code: FORI
(Approved as a REIT by the JSE)
(“Fortress”)
UPDATE, APPOINTMENT OF JOINT SPONSOR AND WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Shareholders are referred to prior announcements on 7 March 2018 and 23 April 2018, in respect of which this
announcement includes an update. In addition, the management of Fortress will be engaging with shareholders
prior to the closed period commencing from its year ending 30 June 2018.
For shareholders visiting the offices of Fortress, its new address is Block C, Cullinan Office Park, Cullinan Close,
Morningside, 2196.
2. UPDATE REGARDING SIYAKHA TRUSTS
The Siyakha Education Trust and The Siyakha 2 Education Trust (the “Siyakha 2 Trust”) (collectively the
“Siyakha Trusts”) have informed Fortress that they have realised and will continue to realise assets in order to
settle all liabilities to institutional lenders. As announced on 7 March 2018, subject to all required regulatory,
third-party and shareholder consents, Fortress envisages that the Siyakha 2 Trust will be repositioned as a BEE
ownership vehicle with a relationship only with Fortress and which owns only Fortress shares and is funded only
by Fortress. Once this repositioning has been implemented, the Siyakha 2 Trust will be renamed the Fortress
Empowerment Trust.
On the assumption of a Resilient REIT Limited (“Resilient”) share price of R54.20 and a Fortress B share price
of R13.58, being the closing prices of Resilient and Fortress B shares respectively on 28 May 2018, the fair value
of Fortress’ claim on loan account against each of the Siyakha Trusts will be impaired by approximately
R1,86 billion. The full amount of each loan will remain due to Fortress and will continue to accrue interest at the
agreed rates. For purposes of determining distributable earnings, for so long as the Siyakha Trusts’ liabilities
exceed the value of the Siyakha Trusts’ assets, Fortress will recognise interest accrued on the loans advanced only
to the extent that the accrued interest is matched by dividends declared for the same period in respect of the shares
held by the Siyakha Trusts less operating costs.
3. DISTRIBUTION GUIDANCE
Based on the assumption that the Fortress A distributions will increase by 5% in the 2018 and 2019 financial
years, Fortress confirms the distribution guidance per Fortress B share it provided in the SENS announcement of
7 March 2018, of approximately 179 cents for the 2018 financial year and growing by approximately 5% for the
2019 financial year. This is based on the further assumptions that there will be no deterioration of the macro-
economic environment, that no major corporate failures will occur and that tenants will be able to absorb the
recovery of rising utility costs and municipal rates. Budgeted rental income is based on contractual escalations
and market-related renewals. As regards dividends to be received by Fortress on its investments, the assumptions
are in line with current guidance provided by the companies in which Fortress has investments. The forecast has
not been audited, reviewed or reported on by Fortress’ auditors.
4. SHAREHOLDING IN RESILIENT
Fortress notes that Resilient has distributed substantially all of its holding of Fortress B shares. It can therefore
no longer be said that there is a cross-shareholding between Fortress and Resilient. Fortress is considering all
options regarding its holding of Resilient shares (currently 41 060 000 Resilient shares representing c.9.66% of
Resilient shares in issue), which at present it regards as strategic.
5. APPOINTMENT OF JOINT SPONSOR
While retaining Java Capital as its lead sponsor, Fortress has appointed Nedbank Limited, acting through its
Corporate and Investment Banking Division, as joint sponsor with effect from 1 June 2018.
6. WITHDRAWAL OF CAUTIONARY
As Fortress is currently not aware of any unpublished price sensitive information, it advises that shareholders no
longer need to continue to exercise caution when dealing in Fortress securities and the cautionary announcement
first published on 7 March 2018 is hereby withdrawn.
29 May 2018
Lead sponsor
Java Capital
Joint sponsor
Nedbank Corporate and Investment Banking
Date: 29/05/2018 04:55:00 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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