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EPP N.V. - Disposal of portion of EPP office portfolio

Release Date: 25/06/2019 07:05
Code(s): EPP     PDF:  
 
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Disposal of portion of EPP office portfolio

EPP N.V.
(Incorporated in The Netherlands)
(Company number 64965945)
JSE share code: EPP
ISIN: NL0011983374
LEI Code: 7245003P7O9N5BN8C098
("EPP")


DISPOSAL OF PORTION OF EPP OFFICE PORTFOLIO


INTRODUCTION

Shareholders are advised that EPP has, through its wholly-owned subsidiary, EPP (Cyprus) – 1 PLC ("the
seller"), concluded a share sale agreement (the "share sale agreement") with HPREF 1 EPP Holdings S.a.r.l.
("the purchaser") for the disposal by the seller to the purchaser of 70% of all the shares in the share capital of
HP-EPP Office Venture B.V (the "JV Company") which owns 100% of Polish limited liability companies
("SPVs"), which SPVs own the properties known as "Malta Office Park", "Symetris Business Park",
"O3 Business Campus A/B" (collectively, the "properties") (the "disposal" or the "transaction").

Post the disposal EPP will hold 30% of all the shares in the share capital of the JV Company with the purchaser
holding the remaining 70%. EPP will remain the asset and property manager of the properties. JV Company also
has a right to acquire the property known as O3 Business Campus Building C.

The purchaser is a wholly-owned subsidiary of the Henderson Park Private Equity Fund, a pan-European private
equity real estate fund based in London. The fund has invested over $5 billion in building a portfolio of real estate
assets across Europe, primarily targeting Europe's gateway and capital cities.

RATIONALE AND USE OF PROCEEDS

The disposal is in line with EPP's strategy to recycle office assets to enable EPP to focus on EPP's positioning
as the leading Polish retail real estate company. The proceeds from the disposal will be used to fund future retail
opportunities and to reduce EPP's leverage.

SALIENT TERMS OF THE DISPOSAL

The share sale agreement was concluded on Monday, 24 June 2019 and the transaction closed on the same date
(the "closing date").

The aggregate purchase consideration of EUR60 million, which is based on the estimated net asset value of
JV Company, ("purchase consideration") for the disposal was paid in cash by the purchaser to EPP on the
closing date. The purchase consideration was determined on the basis of the preliminary accounts prepared by
EPP for the purposes of the share sale agreement. The final purchase consideration is subject to a post-closing
date adjustment (upwards or downward) based on closing accounts to be prepared after closing to take into
account any difference between the preliminary accounts and the closing accounts. Any adjustment is not
expected to result in any material change to the purchase price.

The disposal is unconditional.

The share sale agreement includes warranties, indemnities and undertakings which are normal for a transaction
of this nature.

The relationship between the seller and the purchaser as shareholders in the JV Company is regulated in terms of
a comprehensive shareholders agreements. This agreement includes terms usual for an agreement of the nature
contemplated including reciprocal pre-emptive rights, tag along and drag along provisions, rights to board
representation and appropriate minority protections in favour of the seller.

DETAILS OF THE PROPERTIES

The property specific information required in terms of the JSE Listings Requirements in relation to the properties
includes property name and address, geographical location, rentable area, weighted average rental per square
metre and value attributable to each property is set out below:


                                                                                                             Value
                                                                                                     attributed to
                                                                                          Weighted    the property
                                                                                           average        as at 31
                                                                                        rental per        December
                                      Geographic                                      square metre            2018
     Property name and address        location          Sector           GLA (m2)         (EUR/m2)           (EUR)
 1   Malta Office Park                Poznan, Poland    Office             29 100            13.37      57 600 000
     88. 88A, 88B, 88C, 88D, 88E
     Baraniaka Street, Poznan
 2   Symetris Business Park           Lodz, Poland      Office             19 300            13.01      40 300 000
     86 Pilsudskiego Avenue, Lodz
 3   O3 Business Properties           Krakow, Poland    Office             37 900            13.30      87 500 000
     114 Opolska Street, Krakow
     (Buildings A and B)

The properties were valued by Kamil Kowa and Tomasz Paszkowski of Savills Advisory Services Limited, who are
independent external registered property valuers and a members of the Royal Institution of Chartered Surveyors,
a recognised property valuers regulatory body.

The aggregate net operating income attributable to the properties amounted to EUR14.3 million. This information
is has been extracted from the audited financial statements of EPP, prepared in terms of IFRS, for the 12 months
ended 31 December 2018.

CATEGORISATION OF THE DISPOSAL

The disposal is classified as a category 2 transaction in terms of paragraph 9.5(a) of the JSE Listing Requirements
of the JSE Limited and accordingly, is not subject to approval by EPP shareholders.

25 June 2019


JSE sponsor
Java Capital

Luxembourg Stock Exchange Listing Agent
Harneys Luxembourg

For more information:

Curwin Rittles, Investor Relations, EPP
Mobile: +48 885 982 310
Curwin.rittles@epp-poland.com

Java Capital, JSE Sponsor
Phone: +27 11 722 3050

Harneys Luxembourg, Luxembourg Stock Exchange Listing Agent
Phone: +352 27 86 71 02

Singular Systems IR, Investor Relations South Africa
Michèle Mackey / Jacques de Bie
+27 (0)10 003 0700 / +27 (0)82 497 9827
michele@singular.co.za / Jdebie@singular.co.za

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