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LAPSING OF PREVIOUS TRANSACTION AND DETAILED CAUTIONERY ANNOUNCEMENT - DISPOSAL OF THE PROMENADE SHOPPING CENTRE REN
ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000075651
("Orion " or “the Company” or “the Group”)
LAPSING OF PREVIOUS TRANSACTION AND DETAILED CAUTIONERY ANNOUNCEMENT - DISPOSAL
OF THE PROMENADE SHOPPING CENTRE RENTAL ENTERPRISE
DISPOSAL OF THE PROMENADE
1. Introduction
Shareholders are referred to an update announcement published on 5 February 2019 whereby
they were advised that the Orion Property Holding Trust (“the Seller”), a trust which holds the
properties managed by Orion Real Estate on behalf of the Company and for the benefit of the
Company had received a second, higher offer from Flameup Investments Proprietary Limited
(“Flameup” or the “Purchaser”) to purchase the property known as the Promenade Shopping
Centre, situate at Remaining Extent of Erf 404, Nelspruit (“the Property”) and the leases
managed by the Company in respect thereof (together the “Disposal”) for a consideration of
R185 million which offer was been accepted, subject to the Prinia Asset Management
Proprietary Limited (“Prinia”) Agreement lapsing on 6 February 2019.
Shareholders are advised that the Prinia Agreement has lapsed due to Prinia not having met
certain of the conditions precedent contained in the Prinia Agreement. In addition, the option
agreements to subscribe for shares for cash that were conditional on the Prinia agreement
becoming unconditional, as announced on 18 December 2018, have also lapsed.
Accordingly, the Seller has accepted Flameup’s Offer to purchase the Property for a
consideration of R185 million, inclusive of VAT at 0%. Flameup is not a related party to the Seller.
The details of the indirect beneficial shareholders of Flameup have been requested from the
Purchaser and will be published in due course once received.
2. Rationale for the Disposal and Application of Proceeds of the Disposal
Recent events as previously announced on SENS have led to the decision by Orion to dispose
of the Promenade Property, a portion of the proceeds which will be applied to settle Investec
in full and the cash balance remaining will be applied to the refurbishment of certain properties
owned by the group and working capital requirements. This will leave the group debt free as
the current gearing of the group is less than 20%.
3. Conditions Precedent
The disposal is subject to the following conditions precedent:
• Flameup being satisfied with the necessary due diligence within 14 days of date of signature
of the agreement or delivery of the last due diligence document, whichever date is the
latest;
• The board of directors of the Purchaser approving the transaction within 7 days of the
satisfactory completion of the due diligence;
• Flameup raising the necessary finance within 30 days of the above board approval, on
terms and at interest rates acceptable to the Purchaser; and
• Regulatory approvals, including unconditional approval in terms of the Competition Act No.
89 of 1998, as amended.
The disposal will also require shareholder approval in accordance with the JSE Listings
Requirements.
4. Terms of the Disposal
The purchase price of R185 000 000 and payment thereof is as follows:
4.1 R185 000 000 shall be settled by way of cash, which consideration will be secured by way
of a bank guarantee or letter of undertaking acceptable to the Seller (“Guarantee”).
4.2 The Guarantee shall be payable on transfer to the Purchaser or its nominee and against
registration of the cancellation of any existing bond and against registration of any new
bonds over the Property (if applicable.
4.2 On the date of transfer, the Seller will pay R1 000 000 into the Conveyancer trust account
for investment into an interest-bearing account, which amount plus interest shall be paid
to conveyancer on finalisation of the adjustment account.
If VAT becomes payable by the Seller, the consideration will be deemed to be exclusive of VAT
and the Purchaser shall, on written demand from the Seller, be obliged to pay the amount of
VAT to the Seller within 3 (three) days of delivery by the Seller to the Purchaser of an appropriate
tax invoice.
5 Description of the Property
The Property specific information is detailed below:
PROPERTY NAME ADDRESS LOCATION SECTOR
Promenade Shopping Cnr Samora Nelspruit, Retail, Offices &
Centre Machel Drive & Mpumalanga Hotel
Henshall Street,
Nelspruit, 1200
WEIGHTED AVERAGE
RENTABLE AREA NET RENTAL PER M2 TENANT PROFILE
14,500 sqm R98 per sqm 70 National tenants, including
Boxer, Mr Price, Old Mutual,
Orion Hotel
6. Financial Information
The disposal consideration of R185m is below the value of R212,5 million, attributed to the
Property by independent professional valuer, Peter Parfitt as at 30 June 2018.
The aggregate net rental received in respect of the aforementioned property amounts to
R1,5 million per month, excluding VAT.
It is expected that transaction fees of not more than 4% of the total disposal consideration will
be payable on the fulfilment of the suspensive conditions of the Disposal. Costs will also be
incurred in relation to the Category 1 circular.
7. Warranties
The normal warranties are in place for a disposal of this nature.
8. Classification of the Disposal and cautionary announcement
The Disposal is classified as a Category 1 transaction in terms of section 9 of the JSE Listings
Requirements and will accordingly require shareholder approval. The controlling shareholder
has advised that it will vote in favour of the Disposal.
The Company will make a further announcement once the due diligence and board approval
from the Purchaser have been obtained. Accordingly, shareholders are advised to exercise
caution until a further announcement is made. Shareholders are also advised to refer to the
announcement published on SENS on 5 February 2019, which advises of other negotiations.
JOHANNESBURG
7 February 2019
Sponsor
Arbor Capital Sponsors Proprietary Limited
Date: 07/02/2019 05:42:00 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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