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Declaration announcement in respect of a renounceable rights offer
ACCELERATE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2005/015057/06
Share Code: APF ISIN: ZAE000185815
("the Company" or "APF")
(Approved as a REIT by the JSE)
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY,
IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN OR
ANY OTHER JURISDICTION WHERE EXTENSION OR MAKING THE RIGHTS OFFER
WOULD BE UNLAWFUL OR IN CONTRAVENTION OF APPLICABLE LAW. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN
THE UNITED STATES OR ANY OTHER JURISDICTION
DECLARATION ANNOUNCEMENT AND TERMS OF THE APF RENOUNCEABLE RIGHTS
OFFER
1. INTRODUCTION
1.1 Rebuilt Claim
The Company refers to the SENS announcement released on the
17th of September 2021 where it was communicated that APF will
settle the rebuilt claim by way of a rebuilt settlement
agreement, (“Rebuilt Settlement Agreement”) by making a
payment of R300 million (“the Claim”) to Azrapart Proprietary
Limited (“Azrapart”). It was further detailed that the Company
has current liquidity constraints and will therefore explore
the possibility of settling the Claim via the allocation of APF
shares to Azrapart.
1.2 Related Party Transactions
The Company refers to the extract from the APF interim
financial results for the 6 months ended 30 September 2022
where the following potential related party transactions
(“Proposed Related Party Transactions”) were disclosed:
- Acquisition of additional 1 414 parking bays at Fourways
Mall for R235,188,129
- Acquisition of additional 9,325.5 m2 of additional bulk
at Fourways Mall for R60,354,252
- Acquisition of 1,911 m2 of additional GLA at Fourways
Mall for R60,000,000
- Acquisition of the business of Accelerate Property
Management Company for R47,900,000
- Acquisition of 50% of the Fourways Mall property
management function for R40,600,000
The Proposed Related Party Transactions will result in the
continued alignment between the 2 Fourways Mall shareholders to
each hold 50% of the asset. It will further result in the set-
off of outstanding amounts owned by Mr. Michael Georgiou and
his associated entities to APF.
1.3 Corporate Actions
The APF board, Azrapart and Mr. Michael Georgiou remain in
negotiations on the implementation of the Rebuilt Settlement
Agreement, the Proposed Related Party Transactions and the
payment of the Fourways Mall headlease and will communicate to
shareholders as soon as the negotiations have been finalised.
The APF board remain committed to settling all historic related
party matters and balances in an attempt to clean up the
Company’s balance sheet.
1.4 In the interim, APF has liquidity constraints that hinder the
objective of right-sizing the business of APF, referred to in
clause 2.1 below.
1.5 The APF board have resolved to proceed with a R50,000,000 fully
underwritten renounceable rights offer (“Rights Offer”) to
raise the required working capital.
2. RATIONALE FOR THE RIGHTS OFFER
2.1 The proceeds of the Rights Offer will be utilised to fund APF’s
working capital requirements as part of a continuing focus on
right-sizing the business. The Rights Offer is seen as an
important step in strengthening the financial position of APF
and in particular, enabling the repositioning of Fourways Mall.
2.2 While the APF board has been provided with an authority by
shareholders at the last annual general meeting to issue shares
for cash, such issuances will have the effect of diluting
shareholders’ interests in the Company, and substantially
decrease the net asset value per share of APF.
2.3 The APF board therefore resolved, rather than issuing APF
shares to a single person, to give the shareholders an equal
opportunity to subscribe for APF shares, thereby providing the
shareholders with an opportunity to avoid their dilution. The
working capital injection into APF will therefore be
facilitated by way of a Rights Offer, allowing all shareholders
an equal opportunity to follow their pro-rata portion of the
issuance.
3. TERMS OF THE RIGHTS OFFER
3.1 The Company will proceed with a Rights Offer in terms of which
it will issue 71,248,571 ordinary shares in the authorised
share capital of APF ("Rights Offer Shares") for a subscription
price of 70 cents per Rights Offer Share in the ratio of 6
Rights Offer Shares for every 100 APF shares held at the close
of trade on the record date, upon the terms and conditions set
out in the announcement below and the rights offer circular
(“the Rights Offer Circular”)to follow.
3.2 The subscription price represents a discount of 31.14% to the
30-day volume weighted average price of the trading price of
APF shares on 9 December 2022, being the date, the Board
resolved to pursue the Rights Offer.
3.3 Application will be made to the JSE for the listing of the
letters of allocation in respect of the Rights Offer (“Letters
of Allocation” or “LA’s”) and the Rights Shares on the
securities exchange operated by the JSE as follows:
- LA’s will be listed from the commencement of business on
Wednesday, 8 February 2023 to the close of business on
Tuesday, 21 February 2023 under the JSE code: APFN and
ISIN: ZAE000317392; and
- The Rights Offer Shares will be listed with effect from
the commencement of business on Wednesday, 22 February
2023.
3.4 The Rights Offer Shares will, upon allotment and issue, rank
pari passu with all other APF Shares of the same class.
3.5 The Rights Offer will not include the right for shareholders to
apply for excess allocation.
3.6 The requisite board approvals have been granted for the Company
to proceed with the Rights Offer.
3.7 The Company will provide shareholders with further information
on SENS and by way of a finalisation announcement and Rights
Offer Circular, in due course.
4. UNDERWRITING AGREEMENT
4.1 In terms of the Underwriting Agreement, the Company has
received a commitment from U Big Investments Proprietary
Limited (“the Underwriter”) to fully underwrite the Rights
Offer in respect of all Rights Offer Shares not taken up by
other Shareholders in terms of the Rights Offer.
4.2 The Underwriter’s fee will be R2 500 000 (VAT exclusive) which
equates to 5% of the Subscription amount. In addition, the
Underwriter will recover from APF all reasonable costs properly
incurred by the Underwriter in respect of the Underwriting
Agreement, up to a maximum amount of R400,000.
5. FRACTIONAL ENTITLEMENT
5.1 The allocation of the Rights Offer Shares will be such that
Shareholders will not be allocated a fraction of a Rights Offer
Share and as such any right to receive a fraction of a Rights
Offer Share which:
- is less than one-half of a Rights Offer Share, will be
rounded down to the nearest whole number; and
- is equal to or greater than one-half of a Rights Offer
Share but less than a whole Rights Offer Share, will be
rounded up to the nearest whole number.
6. FOREIGN SHAREHOLDERS
6.1 Foreign shareholders may be affected by the prevailing laws in
their relevant jurisdictions in relation to the Rights Offer.
Such foreign shareholders should inform themselves about and
observe any applicable legal requirements of such jurisdiction
in relation to all aspects of this announcement that may affect
them, including the Rights Offer. It is the responsibility of
each foreign shareholder to satisfy itself as to the full
observation of the laws and regulatory requirements of the
relevant foreign jurisdiction in connection with the Rights
Offer, including the obtaining of any governmental, exchange or
other consents or the making of any filing which may be
required, the compliance with other necessary formalities and
the payment of any issue, transfer or other taxes or other
requisite payments due in such jurisdiction. The Rights Offer
is governed by the laws of South Africa and is subject to
applicable laws and regulations, including South African
exchange control regulations.
7. IMPORTANT DATES AND TIMES
The salient dates and times of the Rights Offer are as follows:
2023
Publication of declaration date Tuesday, 31
announcement on SENS and press January
Publication of finalisation Thursday, 2
information by 11:00 February
Publication of the Rights Offer Monday, 6
Circular on the website of APF February
Last day to trade in APF shares to Tuesday, 7
participate in the Rights Offer February
Listing and trading of Letters of Wednesday, 8
Allocation on the JSE under JSE February
code: APFN and ISIN: ZAE000317392
APF Shares trade ‘ex’ the Rights Wednesday, 8
Offer entitlement February
Circular and form of instruction
Thursday, 9
distributed to certificated
February
shareholders
Record date for determination of
Friday, 10
shareholders entitled to
February
participate in the Rights Offer
Monday, 13
Rights Offer opens at 09:00
February
Dematerialised shareholders will
have their accounts at their CSDP,
Monday, 13
or broker automatically credited
February
with their Letters of Allocation
at 09:00
Rights Offer Circular distributed Monday, 13
to dematerialised shareholders February
Tuesday, 21
Last day to trade LAs on the JSE
February
Certificated shareholders wanting
to sell all or some of their LA’s, Tuesday, 21
to lodge form of instruction with February
the Transfer Secretaries by 12:00
Listing of new Rights Offer Shares
Wednesday, 22
and trading therein on the JSE
February
commences
Record date for LA’s. Rights Offer Friday, 24
closes February
Certificated shareholders wishing Friday, 24
to exercise all or some of their February
Rights Offer rights to lodge
payment and Forms of Instruction
with the transfer secretaries by
12:00
Dematerialised Shareholders’ Monday, 27
accounts updated and debited by February
CSDP or broker (in respect of
payment for Rights Offer Shares)
Certificates distributed to Monday, 27
dematerialised shareholders (in February
respect of the Rights Offer
Shares)
Publication of results Monday, 27
announcement February
Notes:
1. The dates and times set out in this announcement are subject to
change with the approval of the JSE, if required. Any such change
will be published on SENS.
2. All times given in this announcement are in South African Standard
Time, unless otherwise stated.
3. Shares may not be dematerialised or rematerialised between
Wednesday, 8 February 2023 and Friday, 10 February 2023, both days
inclusive.
4. Qualifying dematerialised shareholders are required to notify
their duly appointed broker or CSDP of their acceptance of the
Rights Offer in the manner and within the time stipulated in the
custody agreement governing the relationship between the
qualifying dematerialised shareholder and his/her broker or CSDP.
5. The broker or CSDP accounts of qualifying dematerialised
shareholders (or their renouncees or the purchasers of their
Letters of Allocation) will be automatically credited with new
shares to the extent to which they have accepted the Rights Offer.
CSDPs effect payment in respect of qualifying dematerialised
shareholders (or their renouncees or the purchasers of their
Letters of Allocation) on a “delivery versus payment basis”.
6. The Rights Offer Shares may only be issued in dematerialised form.
Accordingly, qualifying certificated shareholders (or their
renouncees or the purchasers of their Letters of Allocation) will
be required to open an account with a broker or CSDP (if they do
not already have one). Alternatively, qualifying certificated
shareholders (or their renouncees or the purchasers of their
Letters of Allocation) will be afforded the option to
“rematerialise” their Rights Offer Shares and replace them with a
physical Document of Title, provided that such persons have
elected as such on their form of instruction and lodged same with
the transfer secretaries on or before 12:00 on Friday, 24 February
2023. The Documents of Title in respect of the Rights Offer Shares
(if applicable) will be posted to such persons, at their own risk,
as soon as possible following implementation of the Rights Offer.
8. TAX CONSEQUENCES
8.1 APF shareholders are advised to consult their professional
advisors regarding the tax consequences of the Rights Offer.
9. FINALISATION ANNOUNCEMENT
9.1 It is anticipated that the finalisation announcement for the
Rights Offer will be released on SENS on Thursday, 2 February
2023, by 11:00.
10. RIGHTS OFFER CIRCULAR
10.1 The Rights Offer Circular, setting out the full terms of the
Rights Offer and including the form of instruction in respect
of the Letters of Allocation, for use by certificated
qualifying shareholders, will be made available on APF’s
website (www.acceleratepf.co.za) on Monday, 6 February 2023 and
distributed to certificated shareholders on Thursday, 9
February 2023.
Fourways
31 January 2023
Corporate Advisor and Transaction Sponsor: Bravura Capital (Pty)
Limited
Legal Advisors: Glyn Marais Inc.
Sponsor: The Standard Bank of South Africa Limited
Date: 31-01-2023 02:48:00
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