Wrap Text
Proposed Placing of New Ordinary Shares
Growthpoint Properties Limited
(Registration number: 1987/004988/06)
Incorporated in the Republic of South Africa
ISIN: ZAE000179420
(Approved as a REIT by the JSE)
(“Growthpoint” or the “Company”)
THIS ANNOUNCEMENT (“ANNOUNCEMENT”) IS FOR INFORMATION PURPOSES ONLY AND SHALL
NOT CONSTITUTE OR FORM A PART OF ANY OFFER OR SOLICITATION TO PURCHASE OR SUBSCRIBE
FOR SECURITIES IN THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OF AMERICA, OR IN
ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD REQUIRE APPROVAL
OF LOCAL AUTHORITIES OR OTHERWISE BE UNLAWFUL (EACH, A “RESTRICTED JURISDICTION”). THIS
ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA OR JAPAN, OR IN ANY RESTRICTED JURISDICTION. PLEASE SEE
THE “IMPORTANT NOTICE” SECTION AT THE END OF THIS ANNOUNCEMENT.
PROPOSED PLACING OF NEW ORDINARY SHARES
Growthpoint Properties Limited (“Growthpoint” or the “Company”) announces its intention to
conduct a cash placing of authorised but unissued ordinary shares in the Company (the “Placing
Shares”) to qualifying institutional investors to raise approximately ZAR 4 billion of gross subscription
proceeds, (the “Placing”) which represents approximately 10% (ten per cent) of the Company’s
existing issued ordinary share capital. The Placing will be executed in line with the terms of the
authorities granted at the annual general meeting of the shareholders of the Company held on 12
November 2019 (the “2019 Annual General Meeting”). The Placing is being conducted through an
accelerated bookbuild (the “Bookbuild”) which will be launched immediately following the release of
this announcement.
USE OF PROCEEDS, CAPITAL PLAN AND LIQUIDITY
In recent years Growthpoint has been able to maintain dividend payout ratios close to 100% of
Distributable Income Per Share and funded its property development and investment activity
principally with proceeds from debt and proceeds from its dividend reinvestment programme.
In light of the ongoing impact of the COVID-19 pandemic combined with a weaker macroeconomic
outlook, we believe it is prudent to reduce leverage and maintain a strong balance sheet proactively
in order to retain operating flexibility and undertake certain development and investment activities.
In addition to the proposed Placing, Growthpoint’s capital plan includes:
• Cost & capex savings: Certain non-essential development activities have been postponed with
further organic cost savings across the group
• Dividends: Partial retention of earnings through a reduction in our dividend payout ratio;
alongside our dividend reinvestment plan (further details of which will be contained in the
circular to be posted to shareholders on Monday 16 November 2020)
• Disposals: Disposals of ZAR1.0 – 1.5 billion of non-core assets within the South African
portfolio in the current financial year with further opportunities for asset disposals being
reviewed;
Growthpoint’s dividend policy will be to pay out at least 75% of distributable income thereby
complying with current REIT legislation in South Africa. In determining the final payout ratio,
Growthpoint will take into account any ongoing capital and funding requirements.
It is expected that following the Placing, the 30 June 2020 LTV will decrease from 43.9% to
approximately 41.5% on a pro forma basis. Growthpoint’s debt covenant headroom remains strong,
with its strictest LTV covenant being 55%.
As of 31 October 2020, Growthpoint had ZAR5.4bn of liquidity available in the form of committed
undrawn facilities and cash.
With the successful conclusion of the subscription and partial cash offer for shares in Capital &
Regional Plc in December 2019, Growthpoint entered into a facility agreement with Absa Bank Limited
in order to pay the consideration for the acquisition. Proceeds raised from the Bookbuild will in part
be used to repay the debt arising from the acquisition and for general corporate purposes.
DETAILS OF THE PLACING
The Placing will be conducted through the Bookbuild and the book will open with immediate effect
following the release of this announcement. Absa Bank Limited (acting through its Corporate and
Investment Banking division), Goldman Sachs International, J.P. Morgan Securities Plc, Morgan Stanley
& Co International Plc and Rand Merchant Bank, a division of FirstRand Bank Limited, will be acting as
Joint Bookrunners (the “Joint Bookrunners”) in connection with the Placing.
The Placing will be carried out under a combination of:
1. A general authority to issue ordinary shares for cash, as approved by shareholders under
Resolution 1.9 in the 2019 Annual General Meeting. The authority permits the issuance of up
to 148 549 064 ordinary shares being 5% (five percent) of the Company’s ordinary shares in
issue (excluding treasury shares) as at 12 November 2019 and in determining the price at
which the ordinary shares may be issued, permits a maximum discount of 5% of the weighted
average trade price (adjusted for any cum distribution portion) for the 30 business days prior
to the issuance date. The utilisation of this authority is further subject to the restrictions set
out in the JSE Limited’s (“JSE”) Listings Requirements, including that only public shareholders
(as defined therein) may participate;
2. The authority granted to directors as per Resolution 1.7 in the 2019 Annual General Meeting,
to allot and issue, at their discretion, up to 297 098 128 ordinary shares being 10% (ten
percent) of the shares in issue as at 12 November 2019, for purposes of financing the
acquisition of property assets and property investments or at any time to settle debt in respect
of Growthpoint's property assets. Shares issued under this authority can be issued at a
maximum discount of 5% of the weighted average trade price (adjusted for any cum
distribution portion) for the 30 business days prior to the issuance date;
3. The vendor consideration placing rules in terms of paragraph 5.62 of the JSE’s Listing
Requirements; and
4. The general authority and the specific authority above are additive, as per the authorities
approved by the shareholders during the 2019 Annual General Meeting.
The Placing Shares are being offered to qualifying institutional investors only (as set out under
“Important Notice” below) and the Placing is not an offer to the public in any jurisdiction.
The price per ordinary share at which the Placing Shares are to be placed (the “Placing Price”) will be
determined at the close of the Bookbuild. The timing of the closing of the Bookbuild, the Placing Price
and allocations are at the discretion of Growthpoint and the Joint Bookrunners. Details of the number
of Placing Shares and the Placing Price will be announced as soon as practicable on the Stock Exchange
News Service of the JSE following the closing of the Bookbuild. It is expected that listing and trading
(the "Admission") of the Placing Shares on the JSE will commence on or around 17 November 2020
(or such later date as may be agreed between the Company and the Joint Bookrunners) and that
dealings in the Placing Shares will commence at the same time. The Placing is conditional upon,
amongst other things, the Admission becoming effective and the agreement between the Company
and the Joint Bookrunners in respect of the Placing not being terminated in accordance with its terms
prior to the Admission.
The Placing Shares, when issued, will rank pari passu in all respects with the existing Growthpoint
ordinary shares, including the right to receive all dividends and other distributions declared, made or
paid after the date of issue of the Placing Shares.
Of note, investors purchasing the Placing Shares as part of this transaction will be eligible to receive
the dividend of ZAR0.40 declared on 5 October 2020 and payable on 7 December 2020.
Pursuant to the terms of the placing agreement entered into between the Company and the Joint
Bookrunners, the Company has, subject to certain exclusions agreed to between the Company and
the Joint Bookrunners, agreed to customary lock-up arrangements for a period of 90 days from the
closing date of the Placing.
Johannesburg
11 November 2020
For further information, please contact:
Lauren Turner, Head of Investor Relations
Tel: +27 (0) 11 944 6346
JSE Sponsor: Investec Bank Limited
Joint Bookrunners:
Absa Bank Limited (acting through its Corporate and Investment Banking division)
Goldman Sachs International
J.P. Morgan Securities Plc
Morgan Stanley & Co International Plc
Rand Merchant Bank, a division of FirstRand Bank Limited
South African legal counsel to the Company: Glyn Marais Inc
U.S and U.K. legal counsel to the Company: Simmons & Simmons LLP
South African legal counsel to the Joint Bookrunners: Bowman Gilfillan Inc.
U.S. and U.K. legal counsel to the Joint Bookrunners: Shearman & Sterling (London) LLP
Important Notice
This Announcement is for information purposes only and shall not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in the Republic of South Africa, the United
States or any Restricted Jurisdiction. This Announcement and the information contained herein is
restricted and is not for publication or distribution, directly or indirectly, in whole or in part, in or into
the United States, Canada, Australia or Japan, or in any other Restricted Jurisdiction. Any failure to
comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.
The Placing Shares have not been and will not be registered under the U.S. Securities Act of 1933, as
amended (“Securities Act”), or with any securities regulatory authority of any state or other
jurisdiction of the United States and may not be offered, sold, resold, delivered or otherwise
distributed absent registration, except in reliance on an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in compliance with any applicable
securities laws of any state or other jurisdiction of the United States. Accordingly, the Placing Shares
are being offered and sold only (i) in “offshore transactions” meeting the requirements of Regulation
S under the Securities Act and (ii) within the United States, only to a limited number of persons
reasonably believed to be “qualified institutional buyers” as defined in Rule 144A under the Securities
Act that execute and return a U.S. investor representation letter. There will be no public offering of
the Placing Shares in the United States or in any other Restricted Jurisdiction.
In South Africa, the Placing will only be made by way of private placement to: (i) selected persons
falling within one of the specified categories listed in section 96(1)(a) of the South African Companies
Act); and (ii) selected persons, acting as principal, acquiring Placing Shares for a total contemplated
acquisition cost of ZAR1,000,000 or more, as contemplated in section 96(1)(b) of the South African
Companies Act ("South African Qualifying Investors"). This Announcement is only being made
available to such South African Qualifying Investors. Accordingly: (i) the Placing is not an “offer to the
public” as contemplated in the South African Companies Act; (ii) this Announcement does not, nor
does it intend to, constitute a “registered prospectus” or an “advertisement”, as contemplated by the
South African Companies Act; and (iii) no prospectus has been filed with the South African Companies
and Intellectual Property Commission ("CIPC") in respect of the Placing. As a result, this
Announcement does not comply with the substance and form requirements for a prospectus set out
in the South African Companies Act and the South African Companies Regulations of 2011, and has
not been approved by, and/or registered with, the CIPC, or any other South African authority.
The information contained in this Announcement constitutes factual information as contemplated in
section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act, 37 of 2002, as
amended ("FAIS Act") and should not be construed as an express or implied recommendation, guide
or proposal that any particular transaction in respect of the Placing Shares or in relation to the business
or future investments of the Company, is appropriate to the particular investment objectives, financial
situations or needs of a prospective investor, and nothing in this Announcement should be construed
as constituting the canvassing for, or marketing or advertising of, financial services in South Africa. The
Company is not a financial services provider licensed as such under the FAIS Act.
This Announcement is for information purposes only and is directed only at, and communicated to,
persons (a) in Member States of the European Economic Area who are qualified investors (“Qualified
Investors”) within the meaning of article 2(1)(e) of the EU Prospectus Regulation (which means
Regulation (EU) 2017/1129, as amended) (the “Prospectus Regulation”) and (b) in the United Kingdom
who are Qualified Investors and (i) investment professionals falling within Article 19(5) of the UK
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), (ii) high net
worth entities falling within Article 49(2)(a) to (d) of the Order or (iii) other persons to whom it may
lawfully be communicated (each such persons being referred to as “Relevant Persons”). In Member
States of the European Economic Area and the United Kingdom, this Announcement must not be acted
on or relied on by persons who are not Relevant Persons. Persons distributing this Announcement
must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this
Announcement relates is available only in a Member State of the European Economic Area or the
United Kingdom to Relevant Persons and will be engaged in only with Relevant Persons.
No public offering of the Placing Shares is being made in the United Kingdom. In the United Kingdom,
all offers of the Placing Shares will be made pursuant to an exemption under the Prospectus
Regulation (as defined above) from the requirement to produce a prospectus. No prospectus will be
made available in connection with the Placing and no such prospectus is required to be published in
accordance with the Prospectus Regulation.
This Announcement has been issued by, and is the sole responsibility of, the Company. No
representation or warranty, express or implied, is or will be made as to, or in relation to, and no
responsibility or liability is or will be accepted by the Joint Bookrunners, or by any of their respective
affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any
other written or oral information made available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
Each Joint Bookrunner and its respective affiliates are acting solely for the Company and no one else
in connection with the Placing and will not be responsible to anyone other than the Company for
providing the protections afforded to its clients nor for providing advice in relation to the Placing
and/or any other matter referred to in this Announcement. Apart from the responsibilities and
liabilities, if any, which may be imposed on each Joint Bookrunner or its affiliates by its respective
regulatory regimes, neither any Joint Bookrunner nor any of its respective affiliates accepts any
responsibility whatsoever for the contents of the information contained in this Announcement or for
any other statement made or purported to be made by or on behalf of any Joint Bookrunner or any of
its respective affiliates in connection with the Company, the Placing Shares or the Placing. Each Joint
Bookrunner and each of its respective affiliates accordingly disclaim all and any responsibility and
liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) in
respect of any statements or other information contained in this Announcement and no
representation or warranty, express or implied, is made by each Joint Bookrunner or any of its
respective affiliates as to the accuracy, completeness or sufficiency of the information contained in
this Announcement.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions
may be restricted by law. No action has been taken by the Company or any Joint Bookrunner that
would permit an offering of such shares or possession or distribution of this Announcement or any
other offering or publicity material relating to such shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this Announcement comes are required by the
Company and the Joint Bookrunners to inform themselves about, and to observe, such restrictions.
This Announcement contains forward-looking statements within the meaning of the safe harbour
provided by Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of
the Securities Act with respect to the Company’s financial condition, results of operations, business
strategies, operating efficiencies, competitive positions, growth opportunities for existing services,
plans and objectives of management, markets for stock and other matters. These include all
statements other than statements of historical fact, including, without limitation, any statements
preceded by, followed by, or that include the words “targets”, “believes”, “expects”, “aims”, “intends”,
“will”, “may”, “anticipates”, “would”, “should”, “could”, “estimates”, “forecast”, “predict”, “continue”
or similar expressions or the negative thereof.
Any forward-looking statements, including, among others, those relating to the Company’s future
business prospects, revenues and income, wherever they may occur in this Announcement, are
necessarily estimates reflecting the best judgment of the Company’s senior management and involve
a number of risks and uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements. As a consequence, undue reliance should not be placed
on forward-looking statements as a prediction of actual results. Statements contained in this
Announcement regarding past trends or activities should not be taken as a representation that such
trends or activities will continue in the future. No statement in this Announcement is or is intended to
be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or
future financial years will necessarily match or exceed the historical or published earnings of the
Company.
The information contained in this Announcement is subject to change without notice and, except as
required by applicable law, the Company and each Joint Bookrunner do not assume any responsibility
or obligation to update publicly or review any of the forward-looking statements contained in it and
nor do they intend to.
This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or
indirect) that may be associated with an investment in the Placing Shares. Any investment decision to
acquire Placing Shares in the Placing must be made solely on the basis of publicly available information,
which has not been independently verified by any Joint Bookrunner.
The information in this Announcement may not be forwarded or distributed to any other person and
may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or
disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive
may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
This Announcement does not represent the announcement of a definitive agreement to proceed with
the Placing and, accordingly, there can be no certainty that the Placing will proceed. Growthpoint
reserves the right not to proceed with the Placing or to vary any terms of the Placing in any way.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock
exchange other than the Johannesburg Stock Exchange.
Persons who are invited to and who choose to participate in the Placing by making an offer to take
up Placing Shares, will be deemed to have read and understood this Announcement in its entirety
and to be making such offer on the terms and conditions, and to be providing the representations,
warranties, acknowledgements and undertakings, contained herein. Each such placee represents,
warrants and acknowledges that it is a person eligible to purchase or subscribe for the Placing Shares
in compliance with the restrictions set forth herein and applicable laws and regulations in its home
jurisdiction and in the jurisdiction (if different) in which it is physically resident. Unless otherwise
agreed in writing, each placee represents, warrants and acknowledges that it is (a) not located in, a
resident of, or physically present in, the United States, Canada, Australia, Japan or any Restricted
Jurisdiction and it is not acting on behalf of someone who is located in, a resident of, or physically
present in, the United States, Canada, Australia, Japan or any Restricted Jurisdiction and (b) not a
U.S. person (as that term is defined in Regulation S under the Securities Act).
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive
2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of
Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing
measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of
the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has determined that such securities
are: (i) compatible with an end target market of retail investors and investors who meet the criteria
of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II (the “Target Market
Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the
price of the Placing Shares may decline and investors could lose all or part of their investment; the
Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing
Shares is compatible only with investors who do not need a guaranteed income or capital protection,
who (either alone or in conjunction with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.
Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Bookrunners
will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or
group of investors to invest in, or purchase, or take any other action whatsoever with respect to the
Placing Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the
Placing Shares and determining appropriate distribution channels.
NOTWITHSTANDING ANYTHING IN THE FOREGOING, NO PUBLIC OFFERING OF THE PLACING SHARES
IS BEING MADE BY ANY PERSON ANYWHERE AND THE COMPANY HAS NOT AUTHORISED OR
CONSENTED TO ANY SUCH OFFERING IN RELATION TO THE PLACING SHARES.
Date: 11-11-2020 05:12:00
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