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MAS PLC - Acquisition of properties from a related party, amendments to the development joint venture agreement, cautionary

Release Date: 22/04/2022 07:16
Code(s): MSP     PDF:  
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Acquisition of properties from a related party,  amendments to the development joint venture agreement, cautionary

Registered in Malta
Registration number C99355
JSE share code: MSP
ISIN: VGG5884M1041
LEI code: 213800T1TZPGQ7HS4Q13
(‘MAS’, the ‘Group’ or the ‘Company’)


Shareholders are advised that MAS has entered into negotiations to acquire 100% of the share capital and
shareholder loans of six subsidiaries of PKM Development Limited (‘PKM Development’), owning six commercial
retail centres in Romania (the ‘Properties’) (the ‘Proposed Acquisition’). MAS owns 40% of PKM Development’s
ordinary share capital.

PKM Development is the development joint venture established in March 2016 (the ‘DJV’) in terms of the
Amended and Restated Framework Investment Agreement relating to PKM Development Limited, dated 28 July
2017, between Prime Kapital Holdings Limited (‘Prime Kapital’), PKM Development, MAS and MAS CEE
Developments Limited (the ‘DJV Agreement’).

Contemporaneously with the Proposed Acquisition, MAS proposes to execute certain amendments to the DJV
Agreement to extend the duration of the DJV Agreement and increase MAS’ funding commitment to the DJV
(‘DJV Amendment Agreement’).

The Proposed Acquisition and DJV Amendment Agreement (the ‘Transactions’) remain subject to the agreement
of terms and the conclusion, execution and implementation of formal agreements. When agreements have been
executed, a further announcement will be published, detailing the terms of the Transactions.

The Transactions are classified as related party transactions as PKM Development is an associate of Martin
Slabbert (former CEO and current Non-Executive Director of MAS) and of Victor Semionov (former Executive
Director of MAS) via Prime Kapital which holds 60% of the common equity in PKM Development. PKM
Development holds 70 998 476 shares in MAS and Prime Kapital holds 60 650 000 shares in MAS. Prime Kapital
and associates (including shareholdings of DJV, Martin Slabbert, Victor Semionov and other associates) hold 153
628 167 MAS shares, representing 21.5% of MAS’ ordinary shares.

The Transactions are consistent with MAS’ strategic objectives, published with the Group’s financial results for
the period to 30 June 2021, set to be achieved by the end of the 2026 financial year, being:

-    annual like-for-like net rental growth of at least 4% on CEE retail assets from a normalised post Covid-19
     base, in addition to specific asset management initiatives to improve occupancy rates for the current CEE
     retail assets to 99% over this period;

-    completion of commercial developments to the cost of approximately €600 million at a weighted initial net
     yield of more than 9% by the DJV over this period;

-    residential sales and deliveries by the DJV of approximately €200 million per annum by the 2026 financial
     year at net after tax margins of approximately 20%, and

-    direct acquisitions of high-quality CEE based commercial assets to the value of at least €150 million during
     the 2022 financial year and a further €50 million by the end of the 2023 financial year.

Achieving these strategic objectives is expected to lead to substantial improvements in total returns per share and
implies an increase in scale that will position MAS well for an investment-grade credit rating, which will enable
further flexible access to debt finance at optimal cost. The Transactions, if concluded, provide MAS the opportunity
to add additional scale to its operations in CEE via attractive direct acquisitions, and to significantly extend the
benefits expected to be derived from ongoing commercial and residential development activities housed in the

Shareholders are advised to exercise caution when dealing in the Company’s securities until a further
announcement is made in relation to the Transactions.

22 April 2022

For further information please contact:
Leon Allison, MAS P.L.C.                  + 27 82 307 3667
Dan Petrisor, MAS P.L.C.                  + 40 741 184 921
Java Capital, JSE Sponsor                 + 27 11 722 3050

Date: 22-04-2022 07:16:00
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