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ATTACQ LIMITED - An update on the COVID-19 impact on business

Release Date: 15/04/2020 17:40
Code(s): ATT     PDF:  
 
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An update on the COVID-19 impact on business

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” or “the company”)


AN UPDATE ON THE COVID-19 IMPACT ON BUSINESS

Liquidity and contingent liabilities
At 31 December 2019, the group's gearing was 39.1%, measured against the maximum gearing covenant of 60.0%. The
weighted average maturity at that date across the group’s debt facilities was 3.1 years. The group’s debt facilities are spread
between five South African banks and four South African institutions with no exposure to the bond markets. For the period
ending 31 December 2020, total debt facilities of R1.2 billion or 10.2% of the total group interest-bearing debt is due for
maturity on 7 December 2020. Attacq is in the process of refinancing the maturing tranche.

Immediately available resources, after settling the interim dividend paid in March 2020, are in excess of R1.0 billion
comprising R712.4 million of cash and R310.0 million of undrawn committed liquidity facilities with banks.

Attacq has not implemented any share-based transactions which are either funded with debt or are with any recourse to
Attacq.

Retail rental relief and assistance package
The Property Industry Group, which is a collective of representatives from the SA REIT Association, South African
Property Owners Association and South African Council of Shopping Centres, announced a recommended relief and
assistance package (“package") for retail tenants affected by the lockdown. The proposed package includes support for all
qualifying retail tenants during the months April and May with a primary focus on the most vulnerable retail sector
comprising Small, Medium and Micro-sized Enterprises (“SMME’s”). Attacq supports these measures which are designed
to assist our tenants during the lockdown when many businesses are experiencing cashflow challenges.

The property and asset management teams are actively engaging with individual tenants across the entire portfolio
(including retail, offices, industrial and hotels) in assessing the requests for assistance. Any additional relief to retail tenants
over and above the recommended relief package will be determined on a case by case basis.

Rental collection
Rentals are invoiced monthly in advance with rentals typically due on the first day of the month. A total rental collection
rate of 61.7%, based on rental invoiced, was achieved by the close of business on 14 April 2020. The rental invoiced for
the month of April 2020 excludes the impact of the package.

Cost savings
Cost saving measures were implemented by reducing non-essential expenditure. We expect to save a minimum of 6.0% of
operating expenses, excluding property expenses, for the full financial year when compared to the budget and we are looking
at further cost savings. In addition, uncommitted non-essential capital expenditure has been substantially reduced.
Committed capital project feasibilities are also being re-assessed.

Melt Hamman, Chief Executive Officer, has decided to reduce his monthly fixed remuneration by 33.3% for the period
1 April 2020 to 30 June 2020. Melt has also sacrificed any potential increases and annual bonus payments for the 2020
calendar year.
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Developments at Waterfall
With regard to our development portfolio, we are actively collaborating with our contractors and joint venture developers,
to ensure effective management of the operations during the lockdown period. At present, there is no construction activity
at any of our sites.

Distributable earnings
Given the fluidity of the situation, it is not currently possible to quantify the impact that COVID-19 will have on Attacq’s
distributable earnings.

Attacq continues to focus on the health and safety of its employees, its quality asset portfolio and capital allocation and
liquidity priorities. Further updates will be provided to shareholders as the situation evolves.

The information contained in this announcement has not been reviewed or reported on by Attacq’s external auditors.

15 April 2020


Sponsor

Java Capital

Date: 15-04-2020 05:40:00
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