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ABT
ABT
ABT - Ambit - Press Release
Ambit Properties Limited
(Registration number: 2001/007003/06)
Share code: ABT
ISIN code: ZAE000051645
("Ambit" or "the Company")
PRESS RELEASE
Ambit Properties Limited ("Ambit") and Cape Empowerment Trust Limited ("CET")
today released details of a transaction involving the acquisition by Ambit of a
portfolio of 5 office buildings from a number of sellers in which CET and other
BEE parties have a substantial stake.
The purchase price of the 5 properties is R690m payable entirely by way of the
issue of Ambit linked units. This will take Ambits` market capitalization
(currently about R1 billion) to R1.7 billion and total assets (currently R1.2
billion) to R1.9 billion.
The property portfolio comprises 5 buildings having a total rentable area of
83,611m2 which is substantially let to the Department of Public Works on 10 and
7 year leases (38,633m2) and ABSA (19,103m2) on leases the largest of which runs
to 2015. Annual rental escalations are between 8 - 10%. The forecast total
yield of the portfolio is 9%
Nick Harris, Chief Executive Officer of Ambit says this transaction is in line
with the Board strategy of growing assets to in excess of R1,5bn during the
year. He also said that for some while the Board has been seriously and
responsibly addressing the objectives and requirements of the Property Charter.
This transaction will ensure that 23.8% of Ambits listed units will be held by
CET and the total BEE unitholding will be 36%. CET is an empowered company and
has a broad based shareholding.
The units will be issued at a price of R3.70 per unit on the date of transfer of
each of the properties. This issue price was derived from the volume weighted
average price on the 20th April 2007 on which date certain key issues of the
transaction were established but which were still subject to the proposal being
presented to the Ambit and CET Boards and others for approval. From the price
was deducted an allowance half year distribution paid on 4th June 2007 and in
view of the BEE benefits to Ambit and its unitholders into the future a discount
of 7.5% was provided. Subsequently the Ambit price increased in line with the
Listed Property Sector as a whole and the vendors have agreed to 75% of the
units to be issued to be locked in from disposal for a period of 3 years.
In addition the intention is that CET will acquire a 22% equity stake in Ambit
Management Services Proprietary Limited ("AMS") which is currently 100% owned by
ABSA and provides the asset management, property management, accounting and
company secretarial services to Ambit. CET will have an option to acquire an
additional 4% in AMS taking its total holding to 26%.
CET will have representation on both the Ambit and AMS Boards.
Attached is a schedule of the properties and pictures of Mineralia, Hollard,
Foretrust and Trust Bank.
According to CET Chief Executive Officer, Shaun Rai, after the transaction AMBIT
will have a debt equity ratio of less than 24%. " CET views the stock as being
an interest rate defensive stock, compared to other Property Loan Stock
companies which traditionally have around 50% borrowings and therefore more
susceptible to interest rate hikes," said Rai.
Rai continued to say that the much publicized move to a REIT environment should
see further compression of yields and a corresponding rise in AMBIT`s price.
Ambit is currently trading at the
R4.40 level which gives them a market capitalisation of just on R 1bn. Because
of the proposed gearing for every R1 that AMBIT`s price rises, CET will enjoy +-
R98 million to its bottom line.
The transaction is subject to the approval of the Competition Authorities; JSE
Limited and to the extent necessary the Securities Regulation Panel approvals.
In view of the size of the portfolio and the number of units to be issued the
transaction is designated a Category 1 transaction which will require Ambit
unitholder approval at a meeting to be called in July 2007.
A detailed announcement will follow together with a circular to unitholders.
Johannesburg
11 June 2007
Sponsor
Exchange Sponsors (Pty) Limited
Date: 11/06/2007 14:22:39 Produced by the JSE SENS Department.
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