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Proposed disposal of leasehold rights in the Deloitte building and withdrawal of cautionary
ATTACQ LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/000543/06)
JSE share code: ATT ISIN: ZAE000177218
(Approved as a REIT by the JSE)
("Attacq")
PROPOSED DISPOSAL OF LEASEHOLD RIGHTS IN THE DELOITTE BUILDING AND WITHDRAWAL OF CAUTIONARY
INTRODUCTION
Shareholders are advised that Attacq Waterfall Investment Company Proprietary Limited ("AWIC"), a
wholly-owned subsidiary of Attacq, has entered into a sale agreement (the "Transaction Agreement") in
terms of which it will dispose of its 50% undivided share in the leasehold rights derived from and under the
notarial lease entered into between the landowner and AWIC (as the notarial lessee), registered under
registration number K292/2018L on 31 January 2018, and the written notarial deed of cession and
assignment executed between AWIC (the assignor) and Atterbury (the assignee) and registered under
registration number K18/293, dated 31 January 2020 (the "Leasehold Rights"), in respect of Erf 4525
Jukskei View Extension 89 Township, Registration Division I.R., Province of Gauteng, measuring 2,3695
hectares (the "Property"), together with the letting enterprise conducted on the Property, as a going concern,
which includes the commercial lease by Deloitte & Touche (the "Tenant") of the building (together with the
concomitant parking bays) on the Property (the "Building") conducted in relation thereto (the "Business"),
to the Government Employees Pension Fund, a fund established in terms of the Government Service Pension
Act, 1973 and renamed by the Government Employees Pension Law, 1996, represented by the Public
Investment Corporation SOC Limited (the "GEPF" or the "Purchaser"), subject to the terms of the
Transaction Agreement and the satisfaction or waiver of the conditions precedent set out below (the
"Transaction").
TERMS OF THE TRANSACTION
The GEPF wishes to become the sole holder of the Business and the Leasehold Rights and therefore has
acquired each of AWIC and Dale Creek Investments Proprietary Limited's ("Dale Creek") respective 50%
undivided shares in the Business and Leasehold Rights (the "Sale Asset") in one indivisible transaction. The
obligations and liabilities of the Sellers under the Transaction Agreement are provided in proportion to their
holdings.
The aggregate Purchase Consideration payable by the GEPF in respect of the Sale Asset is R1 700 000 000
inclusive of VAT at the rate of 0% (the "Purchase Consideration"). Attacq's 50% of the Purchase
Consideration amounts to R850 000 000. Each Seller’s share of the Purchase Consideration is payable by
the GEPF on the date of transfer.
The Transaction Agreement contains warranties standard for a transaction of its nature. Save for the
warranties provided by the Sellers in favour of the GEPF as contained in the Transaction Agreement, the
Sale Asset is purchased on the basis that it is taken voetstoots.
RATIONALE AND USE OF PROCEEDS
The disposal forms part of Attacq's stated strategy of reducing debt, improving its gearing and increasing its
investment capacity. The proceeds will be utilised to settle Rand-denominated debt, of which R580.0 million
relates specifically to the Property.
BACKGROUND TO THE TRANSACTION
The transaction is comprised of two parts, namely the Business and the Leasehold Rights.
The Business
The Building was developed as part of a 50/50 joint venture between Attacq (through AWIC) and Atterbury
(through Dale Creek) (the "Sellers") and was completed on 31 January 2020. In 2017, AWIC and Dale
Creek established a letting enterprise in respect of the Building, entering into a 12-year lease with the Tenant
with the lease coming into effect on completion of the Building (the "Tenant Lease").
The Business comprises the letting enterprise owned in equal 50% shares by the Sellers of the Property, as a
going concern, which includes:
i. the fixed and moveable assets (other than the Property);
ii. the goodwill pertaining to the Tenant Lease;
iii. the rights, title and interest in and to the Tenant Lease;
iv. the rights, title and interest in and to all service, maintenance and supply contracts concluded between
the Sellers (or their predecessors) and any third parties in respect of the conduct of the Business; and
v. the rights, title and interest in and to the property management agreement with ATTX Property Services
Proprietary Limited.
The Leasehold Rights
The Leasehold Rights includes all of the rights, title and interest and obligations of AWIC and Dale Creek
(as the notarial lessees) under and derived from the applicable notarial documents of transfer, including the
rights to use, lease and occupy the Property and erect improvements thereon. The Sellers each hold a 50%
undivided share in the leasehold rights which are contained in a notarial lease. The notarial lease is registered
at the applicable deeds office and is perpetually renewed to a period of 99 years.
CONDITIONS PRECEDENT
The fulfilment of the Transaction remains subject to the fulfilment or waiver of the following conditions
precedent:
a) the Sellers having formally waived their respective pre-emptive rights, tag-along rights or other similar
rights, if any, contained in the Co-ownership Agreement entered into between the Sellers on or about
4 December 2017 in terms of which, inter alia, the Sellers govern their relationship as co-owners of the
Leasehold Rights, in respect of the disposal by the Sellers of their share of the Sale Asset;
b) the Sellers providing to the Purchaser written consent from the landowner consenting to the cession and
assignment of the Sale Asset in accordance with the relevant terms of the notarial lease by no later than
35 days from the last party signing the Transaction Agreement;
c) the Competition Authorities approving the implementation of this Agreement in terms of the
Competition Act, evidenced by the issue of a merger clearance certificate within 120 days from the last
party signing the Transaction Agreement;
d) the Tenant confirms in writing that it is satisfied with the impact of the Transaction (if any) on its
procurement spend, by no later than 31 May 2021;
e) written confirmation from the notary appointed for the transaction or the Sellers' financiers by no later
than 31 May 2021 that all consents and permission are in place for the simultaneous cancellation of the
Sellers' respective mortgage bonds on registration against payment of the settlement amounts on the
transfer date; and
f) the Sellers providing the Purchaser with written confirmation that the Tenant partner equivalents are
bound jointly and severally with the Tenant partners in favour of the landlord by no later than 31 May
2021.
PROPERTY SPECIFIC INFORMATION
Net loss Attacq share
for the six of estimated Attacq
Weighted months Attacq total carrying
average ended 31 share of development value at 31
Name and Occupied rental per December valuation cost on December
geographical GLA m2 2020 Valuation (50%) completion 2020
location Sector (m2) (R/m2) (R'000) (R'000) (R'000) (R'000) (R'000)
Deloitte
Building: 5
Magwa
Crescent
(north-east of Office 44 265 207.0 8 423 1 711 700 855 850 675 756 834 074
the Mall of
Africa)
Waterfall
City
Notes:
1. The valuation as per a director's valuation at 31 December 2020, supported by an external desktop valuation
performed by Steven Wolffs of Mills Fitchet, an independent external valuer registered in terms of the Property
Valuers Profession Act 47 of 2000.
2. The "Attacq carrying value" reflects Attacq's share of the valuation adjusted for estimated cost to complete at
31 December 2020.
3. Weighted average rental per m2 is the weighted average rental for all single tenanted office and mixed use
properties as extracted from the annual financial statements of Attacq for the year ended 30 June 2020.
CATEGORISATION OF THE TRANSACTION
In terms of the JSE Listings Requirements, the disposal is classified as a Category 2 transaction for Attacq
and is not subject to the approval of shareholders.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement released on SENS on 15 February 2021 and the
subsequent renewal thereof on 31 March 2021, and are advised that as a result of the publication of this
announcement, the cautionary is withdrawn.
6 May 2021
Sponsor
Java Capital
Date: 06-05-2021 12:08:00
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