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Proposed disposal of properties for an aggregate consideration of circa R700 million
BEE annual compliance report
REBOSIS PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2010/003468/06)
JSE share codes:
REA ISIN: ZAE000240552
REB ISIN: ZAE000201687
Alpha code: REBI
(Approved as a REIT by the JSE)
(“Rebosis” or the “Company”)
PROPOSED DISPOSAL OF PORTFOLIO OF PROPERTIES FOR AN AGGREGATE CONSIDERATION OF
CIRCA R700 MILLION
BEE ANNUAL COMPLIANCE REPORT
1. Introduction and rationale
Rebosis shareholders are hereby advised that the Company has, through its wholly-owned subsidiary
Ascension Properties Limited (the “Seller”), entered into a portfolio sale agreement dated 20 February
2019 (the “Sale Agreement”) to dispose of a portfolio of seven properties (the “Properties”) together
with the commercial enterprises which the Seller operates separately in respect of letting each
Property (“Rental Enterprises”), as an indivisible whole and as a going concern, in its office portfolio,
to Fortune Capital (Proprietary) Limited (company registration number 2014/094485/07)(the “Purchaser”)
(the “Disposal”).
The Purchaser is a 100% black owned diversified investment group of which Nhlanhla Magubane is the
sole shareholder and director.
The Disposal, comprising of office buildings, further demonstrates Rebosis’ commitment to
transformation in the property sector and forms part of the Company’s strategy to be a retail-focused
fund and to reduce the Company’s gearing in line with the road-map outlined in the results
announcement released on the Stock Exchange News Service on 12 November 2018. The proceeds of
the Disposal will be used to reduce the existing debt of the Company. The Disposal will become
effective on the date of registration of transfer of the Properties into the name of the Purchaser
(“Transfer Date” or “Transfer”).
2. The Disposal
In terms of the Sale Agreement, the Properties will be disposed of for an individual purchase
consideration (in respect of each Property, “Individual Purchase Consideration”) as follows:
Property Individual Purchase Consideration
Mishumo House R70 338 000
Swiss House R127 005 000
Prorom Building R54 232 000
Riverpark R63 015 000
Riverview R50 146 000
Schreiner Chambers R221 713 000
Medscheme Building R109 880 000
Total R696 329 000
The aggregate purchase consideration payable by the Purchaser to the Seller for the Properties in
terms of the Sale Agreement is R696 329 000, including value added tax (“VAT”) at the rate of 0% or
10.5% yield on 12 months forward income, whichever is the greater (the “Purchase Consideration”).
2.1 The consideration payable for the Disposal
2.1.1 The Purchase Consideration shall be paid by the Purchaser to the Seller as follows:
- R696 329 000, including VAT at 0% or 10.5% yield on 12 months forward income,
whichever is the greater on the Transfer Date, and will be discharged by the Purchaser
by means of payment to the conveyancers appointed by the Seller (the “Conveyancers”),
in cash, on the Transfer Date and against transfer of the Properties.
- The payment of the Individual Purchase Consideration in respect of each Property shall
be paid by the Purchaser to the Seller against registration of transfer of ownership of
the applicable Property into the name of the Purchaser.
2.1.2 The Individual Purchase Consideration in respect of each Property shall be increased by an
amount ("Additional Amount") determined by applying to such Individual Purchase
Consideration the percentage rate obtained by multiplying the rate of 10.5%, calculated and
expressed as an effective daily rate, by the number of days elapsed between 3 June 2019 and
the Transfer Date of that Property, excluding the first day and including the last day of that
period. The Seller and the Purchaser (the “Parties”) have agreed that in the event that there
is a delay in Transfer, which is caused by external factors beyond the control of both Parties,
then the date of 3 June 2019 shall be extended to 3 July 2019. If the delay still continues and
Transfer has not taken place, then the adjustment to the Purchase Consideration shall be
applicable with effect from 3 July 2019.
2.1.3 The Purchaser will procure a loan, mezzanine funding and equity for the Disposal and the Seller
shall be willing, but not obliged, to assist with equity in the form of a vendor loan at the
appropriate time.
2.2 Warranties
The Sale Agreement governing the Disposal contains representations and warranties by the Seller in
favour of the Purchaser which are standard for transactions of this nature.
3. The Properties and related financial information
3.1 Property information
Property Location Sector Lettable Single or Weighted Value of the
area multi- average Properties*
tenanted rental per
m2
(R) (R’m)
Mishumo Erven 2975, Office 6 154m² Multi 120.2 95
House 2976, Portion1 tenanted
and RE Erf
2977
Johannesburg
Swiss House Erf 1121 Office 8 008m² Multi 106.8 131
Marshalls tenanted
Town
Prorom Erf 1433 Office 6 431m² Multi 116.9 77
Building Nelspruit tenanted
Riverpark Portion 5 of Office 4 216m² Multi 112.9 68
Erf 40 tenanted
Riverside Park
Ext 6,
Nelspruit
Riverview Portion 6 of Office 4 303m² Single 103.2 68
Erf 40 tenanted
Riverside Park
Ext 6,
Nelspruit
Schreiner Erf 5243 Office 18 815m² Multi 116.7 233
Chambers Johannesburg tenanted
Medscheme Erf 330 Florida Office 6 729m² Single 113.5 115
Building Noord tenanted
Extension 7
*The value of the Properties has been extracted from the Company’s audited results for the year
ended 31 August 2018, which have been prepared in terms of International Financial Reporting
Standards (“IFRS”). The valuations were performed by LDM Valuation Solutions (Pty) Ltd, who is
independent from the Company and registered as a professional valuer in terms of the Property
Valuers Profession Act, No. 47 of 2000.
3.2 Value of and profits attributable to the net asset that are the subject of the Disposal
The value of the net assets that are the subject of the Disposal is R787 million as extracted from
the Company’s audited results for the year ended 31 August 2018 and prepared in terms of IFRS.
The profits attributable to the net assets that are subject of the Disposal is as follows:
Property Net profit after tax (R’m)
Mishumo House 11.1
Swiss House 12.6
Prorom Building 7.7
Riverpark 5.4
Riverview 4.9
Schreiner Chambers 25.9
Medscheme Building 10.0
The financial information provided above, which has been extracted from the Company’s audited
results for the year ended 31 August 2018 was prepared in terms of IFRS, is the responsibility of
the directors of Rebosis and has not been reported on or reviewed by a reporting accountant.
3.3 Related Financial Information
The Purchase Consideration is based on the aggregated 12 months forward net income of R73.297
million in respect of the Properties. The forecast financial information provided is the responsibility
of the directors of Rebosis and has not been reported on or reviewed by a reporting accountant in
terms of Section 8 of the JSE Listings Requirements.
4. Conditions precedent
The Disposal is subject to the fulfilment of the following outstanding conditions precedent:
4.1 by no later than 15 March 2019, the board of directors of the Seller shall have approved the
Disposal on the terms and conditions of the Sale Agreement;
4.2 by no later than 15 March 2019, the board of directors of the Purchaser shall have approved the
Disposal on the terms and conditions of the Sale Agreement
4.3 by no later than 15 March 2019, the Purchaser, at its own cost and expense, shall have completed
and have confirmed in writing to the Seller that it is satisfied with the outcome of a due diligence
investigation and wishes to proceed with the Disposal;
4.4 by no later than 15 March 2019, the Purchaser shall have furnished the Seller with confirmation of
funding from banks and/or financial institutions and confirmation of equity, in a form reasonably
acceptable to the Seller, for the payment to the Seller of the Purchase Consideration upon
registration of transfer of the Properties;
4.5 by no later than 1 April 2019, the Purchaser shall have furnished the Seller with guarantees from
banks and/or financial institutions, in a form reasonably acceptable to the Seller, for the payment
to the Seller of the Purchase Consideration upon registration of transfer of the Properties;
4.6 by no later than 15 April 2019, and only to the extent if legally required, the statutory body
constituted in terms of the Competition Act No 89 of 1998, approves the Disposal in writing, either
unconditionally or subject to such conditions as the Parties both agree are acceptable to them.
5. Categorisation
The Disposal constitutes a Category 2 transaction for Rebosis in terms of the JSE Listings Requirements,
which merely requires an announcement.
BEE ANNUAL COMPLIANCE REPORT
Shareholders are advised that the Company’s annual compliance certificate issued in terms of section
13G (2) of the Broad-based Black Economic Empowerment Amendment Act, No 46 of 2013, is available
on the Company’s website at
http://www.rebosis.co.za/wp-content/uploads/2015/06/Rebosis_Certificate_Final_.pdf.
Johannesburg
20 February 2019
Investment Bank, Corporate Advisor, and Equity and Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 20/02/2019 04:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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