| Thu 30 Aug 2007, 16:15 | | RDF/MDN - Redefine/Madison - A further BEE initiat |
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MDN RDF
MDN RDF
RDF/MDN - Redefine/Madison - A further BEE initiative by Redefine and Madison
Redefine Income Fund Limited
(Registration No. 1999/018591/06)
Share Code: RDF & ISIN Code: ZAE000023503
("Redefine")
Madison Property Fund Managers Holdings Limited
Registration number 2003/021772/06
Madison Property Fund Managers Limited
Registration number 2005/021874/06
("Madison")
Share Code: MDN & ISIN Code: ZAE000080560
A FURTHER BLACK ECONOMIC EMPOWERMENT ("BEE") INITIATIVE BY REDEFINE AND MADISON
INTRODUCTION AND RATIONALE
Redefine, via its wholly-owned subsidiary, Outward Investments (Proprietary)
Limited has reached agreement with black owned Mergence Africa Holdings
(Proprietary) Limited ("MAH"), via its subsidiary Mergence Africa Properties
(Proprietary) Limited ("Mergence") to facilitate the establishment of another
BEE property fund known as Mergence Africa Property Fund (Proprietary) Limited
("MAPF"). This transaction is part of Redefine`s overall BEE strategy and
transformation initiative and is driven by Redefine`s desire to contribute to
enterprise and skills development in line with the Codes of Good Practice on
Broad-Based Black Economic Empowerment published by the Department of Trade and
Industry and the Property Sector Transformation Charter (collectively, the
"Codes").
In addition to real estate, MAH is involved in asset management via its
subsidiary, Mergence Africa Investments (Proprietary) Limited, which is an
alternative investment boutique that has approximately R3 billion in assets
under management. MAH is also involved in advisory services, derivative
structuring and execution through its subsidiary Mergence Africa Capital
(Proprietary) Limited. MAH is owned and operated by its founders who are
predominantly black.
OBJECTIVES OF MAPF
Redefine and Mergence (in the ratio 49/51) intend to increase MAPF`s property
portfolio both in size and value in accordance with sound investment principles
and consistent with the provisions of the Codes, with a view to MAPF ultimately
listing on the JSE Limited.
ESTABLISHMENT OF MAPF
MAPF has secured an initial property portfolio valued at approximately R230
million. MAPF is in the process of negotiating for the acquisition of additional
property portfolios.
The purchase price of the initial property portfolio shall be funded partially
by way of third party senior debt financing. Redefine has agreed to provide
credit enhancement in respect of this funding, in consideration for which MAPF
will pay a market related fee. The balance of the purchase price is to be funded
by the subscription by each of Redefine and Mergence for linked units (each
comprising a share linked to a debenture) in the ratio 49/51. Redefine has
further agreed, for a market related fee, to provide credit enhancement in
respect of the third party senior debt financing provided to Mergence in respect
of Mergence`s subscription for linked units.
ESTABLISHMENT OF A BEE ASSET MANAGER
The asset management of MAPF shall be conducted by a new asset management entity
to be known as The Mergence Africa Property Fund Management Trust, the
beneficial interests in which will be held 50% by a BEE consortium lead by
Mergence and 50% by JSE listed asset manager (and Redefine`s asset manager),
Madison Property Fund Managers Limited. The Mergence Africa Property Fund
Management Trust will provide property asset management services to MAPF on
arms-length terms, which will include performance criteria standard for
agreements of this nature.
BEE NATURE OF THE FUND
In recognition of the fact that the establishment of the fund comprises a BEE
initiative, Mergence has undertaken that it will retain its BEE status and
credentials for a period of at least 7 years.
BOARD REPRESENTATION
The MAPF board will initially comprise Izak Petersen, Masimo-a-Badimo Magerman,
Luis Levy, Peter Penny, Brian Azizollahoff and Grant Abrahams.
Rosebank
30 August 2007
Corporate advisor, legal advisor and sponsor to Redefine and Madison
Java Capital (Proprietary) Limited
Date: 30/08/2007 16:15:51 Produced by the JSE SENS Department.
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