OCTODEC INVESTMENTS LIMITED - Response to COVID-19 and withdrawal of distribution guidance

Response to COVID-19 and withdrawal of distribution guidance

OCTODEC INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1956/002868/06)
JSE share code: OCT ISIN: ZAE000192258
(Approved as a REIT by the JSE)
(“Octodec” or “the Company”)


RESPONSE TO COVID-19 AND WITHDRAWAL OF DISTRIBUTION GUIDANCE


This announcement serves to provide context to Octodec’s positioning and response to COVID-19 which has
created an extremely uncertain, fluid and challenging environment.

Octodec is supportive of the South African government’s response to the COVID-19 outbreak and has
implemented the necessary measures to align with the various directives across its portfolio, including the
21-day national lockdown.

In doing so, Octodec has prioritised the health and wellbeing of employees, tenants, business partners and
visitors to our premises and is taking guidance from the government, the World Health Organisation (WHO)
and the National Institute for Communicable Diseases (NICD).

Octodec’s management is also actively engaging with various stakeholders, to implement business continuity
measures that attempt to mitigate the effects of COVID-19 on the business and the industry’s value chain in
general.

Operational update

The business continuity and safety measures put in place in collaboration with City Property Administration
Proprietary Limited, Octodec’s property and asset manager, are delivering as planned. Essential services to
tenants have been maintained across the portfolio whilst non-essential functions continue to be carried out,
albeit, remotely.

In accordance with the lockdown regulations, all commercial premises where tenants are classified as trading
in non-essential goods and services have closed. Tenants classified as trading in essential goods or services,
in line with the gazetted exemption, remain open and strict hygiene and safety protocols are being followed.

While the full extent of the impact is uncertain, there is an immediate bearing on tenants trading in non-
essential goods and services which will affect affordability and their ability to honour rent payments. Within
reason, Octodec is committed to assisting its tenants to navigate through this challenging period and is dealing
with requests for rental relief on a case-by-case basis, as a tenant retention strategy.

Capital management

The current COVID-19 pandemic, local economic conditions and unprecedented global financial market
uncertainty requires prudent balance sheet management and greater focus on liquidity planning. Octodec has
already put in place the following measures with regards to capital management:

-   halted incurring costs on any new projects and curtailing of expenditure on existing upgrades;
-   diversification of our source of funders by recently securing a 3 and 4-year term loan facility in the amount
    of R225 million each with ABSA;
-   cash resources and undrawn banking facilities currently available are in excess of R600 million; and
-   extending the interest rate hedging maturity profile and increasing overall swaps as a percentage of debt
    at favourable interest rates.

Octodec remains well within all its debt covenants and management is closely monitoring the impact on our
covenants in this uncertain environment.

Withdrawal of distribution guidance

Given the current lack of predictability and ability to estimate the overall impact of COVID-19 on future
performance, the Octodec board of directors has taken the decision to withdraw its distribution guidance as
previously communicated for the full financial year ending 31 August 2020. The pay-out ratio for distributions
will be evaluated in the lead up to the announcement of the interim results.

Shareholders are advised that the interim results will be announced on 22 April 2020, at which time a further
update will be provided. The information contained in this announcement has not been reviewed or reported
on by Octodec’s external auditors.


7 April 2020


Sponsor
Java Capital

Date: 07-04-2020 12:32:00
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