| Thu 30 Aug 2007, 11:05 | | HPA/HPB - Hospitality Property Fund Limited - Sali |
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HPA HPB
HPA
HPA/HPB - Hospitality Property Fund Limited - Salient terms of the proposed
rights offer
Hospitality Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A linked units: HPA
ISIN for A linked units: ZAE000076790
Share code of B linked units: HPB
ISIN for B linked units: ZAE000076808
("Hospitality" or "the Fund")
SALIENT TERMS OF THE PROPOSED RIGHTS OFFER ("THE RIGHTS OFFER")
1. Introduction
The Board of Directors of Hospitality ("the Board") wishes to advise A- and B-
linked unitholders ("linked unitholders") that Hospitality proposes to proceed
with a rights offer, subject to the fulfillment of the conditions precedent
referred to in paragraph 4 below.
2. Terms
Offer volume: R500 million
15 903 352 A- linked units
15 903 352 B- linked units
Issue price: A- linked unit: 1 286 cents
B- linked unit: 1 858 cents
Rights entitlement: 17,4044 A- linked unit rights and 17,4044 B- linked
unit rights for every 100 A- linked units;
17,4044 A- linked unit rights and 17,4044 B- linked unit rights for every 100 B-
linked units;
(In terms of Hospitality`s Memorandum and Articles of Association, it is
obligated to issue A- and B- linked units in equal numbers. Accordingly, the
rights entitlement will be a right to combined units, each combined unit
comprising one A-linked unit and one B- linked unit.)
Excess subscriptions: invited
Minimum subscription: none
Underwriting: none
Further details: in circular to be posted to linked unitholders
3. Rationale
The primary consideration in proposing a rights offer at this time is the
requirement for funds which are to be utilised for various property acquisitions
as well as the expansion and refurbishment of certain existing properties over
the course of the next 18 months. The estimated total funding required in
respect of these projects is approximately R750 million.
The Fund will, in the short term, be utilising debt facilities to fund the
announced acquisitions of The Hazyview Hotel, Hluhluwe Hotel & Safaris, the
extension to the Birchwood Hotel, the additional shares in 90 sectional title
units at the Radisson Hotel Waterfront and the remaining share in the Park Inn
Greenmarket Square. The proceeds from the rights offer will be applied to
reducing these short term borrowings. The purchase consideration required for
all of the secured acquisitions will total approximately R235 million.
Market and financial analyses are currently being finalised in respect of the
redevelopment, expansion, refurbishment and repositioning of a number of
properties within the Fund`s current portfolio. The total estimated funding
required for these projects amounts to approximately R500 million. The two
largest projects are: the refurbishment of the Rosebank Hotel, estimated at R254
million; and the expansion and refurbishment of the Mount Grace Country House
and Spa, estimated at R110 million.
The projects under review are as follows:
The Rosebank Hotel: refurbishment;
The Rosebank Hotel: development of spa and wellness centre;
Mount Grace Country House & Spa: expansion and refurbishment;
Champagne Sports Resort: expansion and refurbishment;
The Imperial Hotel: expansion and refurbishment;
The Winkler Hotel: expansion and refurbishment;
The Bayshore Inn: refurbishment;
The Richards Hotel: refurbishment; and
Protea Hotel Richards Bay: refurbishment.
The rights offer will not fully satisfy the anticipated funding requirement,
with an anticipated shortfall of approximately R250 million. This will be
financed with debt by increasing the Fund`s borrowing facilities in the short
term.
The effects of the rights issue coupled with the envisaged return from the
various acquisitions and expansion and refurbishment projects under review are
forecast to have a positive impact on the Fund`s earnings. Projections indicate
that the Fund`s earnings should be enhanced by the rights issue when compared to
debt funding.
4. Conditions precedent
Sufficient authorised but unissued Hospitality linked units being placed under
the control of the Board at the general meeting to be held on 14 September 2007,
notice of which has been posted today;
approval of the rights offer circular by the JSE Limited; and
registration of the rights offer circular by the Companies and Intellectual
Property Registration Office of South Africa.
5. Salient dates and times
2007
General meeting circular posted to linked Thursday 30 August
unitholders on
Record date to determine those Hospitality Tuesday 11 September
linked unitholders entitled to vote at the
general meeting on
Last day to lodge form of proxy for the Wednesday 12 September
general meeting, by 09h00 on
General meeting to approve additional linked Friday 14 September
units issuance held at 09h00 on
Results of the general meeting released on Friday 14 September
SENS on
Results of the general meeting published in Monday 17 September
the South African press on
If the Rights Offer becomes unconditional
Last day to trade in linked units in order to Thursday 20 September
qualify to participate in the Rights Offer
(cum rights)
Linked units commence trading ex-rights on the Friday 21 September
JSE at 09h00 on
Record date for the Rights Offer for purposes Friday 28 September
of determining linked unitholders entitled to
participate in the Rights Offer at the close
of business on
Rights Offer circular posted to linked Monday 1 October
unitholders on
Rights Offer opens at 09h00 on Monday 1 October
Dematerialised linked unitholders will have Monday 1 October
their accounts at their CSDP or broker
automatically credited with their letters of
allocation
Certificated linked unitholders will have Monday 1 October
their letters of allocation credited to an
electronic register at the transfer
secretaries
Last day to trade in letters of allocation in Friday 12 October
order to settle trades by the close of the
Rights Offer and participate in the Rights
Offer at the close of business
Listing and trading of rights offer linked Monday 15 October
units on the JSE commences at 09h00 on
Record date for letters of allocation Friday 19 October
Rights Offer closes at 12h00 and payment to be Friday 19 October
made and form of instruction lodged by
certificated linked unitholders with the
transfer secretaries by 12h00 on
CSDP/Broker accounts credited with rights Monday 22 October
offer linked units and debited with any
payments due in respect of dematerialised
rights offer linked units
Refund cheques (if applicable) posted to of Monday 22 October
certificated linked unitholders
Rights Offer linked unit certificates in terms Monday 22 October
of the Rights Offer posted to certificated
linked unitholders
Results of Rights Offer released on SENS Tuesday 23 October
Adjustment of number of listed rights offer Tuesday 23 October
linked units on or about
Results of Rights Offer published in the press Wednesday 24 October
Notes:
Dematerialised linked unitholders are required to inform their CSDP or broker of
their instructions in terms of the rights offer in the manner and time
stipulated in the agreement governing the relationship between the linked
unitholder and their CSDP or broker.
Linked unit certificates may not be dematerialised or rematerialised between
Friday 21 September and Friday 28 September, both days inclusive.
Dematerialised linked unitholders will have their accounts at their CSDP
automatically credited with their rights and certificated linked unitholders
will have their rights credited to an account at Computershare Nominees.
CSDPs effect payment in respect of dematerialised linked unitholders on a
delivery versus payment method.
Sandton
30 August 2007
Merchant bank and sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited
Date: 30/08/2007 11:05:32 Produced by the JSE SENS Department.
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