| Fri 16 May 2008, 9:20 | | ORE - Orion Real Estate - Purchase Of Erven 542 An |
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ORE
ORE
ORE - Orion Real Estate - Purchase Of Erven 542 And 558 Gordon`s Bay,
Known As Mountain View Shopping Centre ("Mountain View")
ORION REAL ESTATE LIMITED
(formerly Alpina Investment Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE & ISIN: ZAE000075651
("Orion" or "the company")
PURCHASE OF ERVEN 542 AND 558 GORDON`S BAY, KNOWN AS MOUNTAIN VIEW
SHOPPING CENTRE ("Mountain View")
Introduction
Shareholders are advised that Orion has negotiated the conclusion of an
agreement dated 15 January 2008 in terms of which Orion will acquire,
Development & Investment Corporation Close Corporation, Registration
number 1985/012671/23) ("Sellers"), 100% of the property known as Erven
542 and 558 Gordon`s Bay, situated at 10 Somerlust Street, Gordon`s Bay,
Western Cape Province with improvements thereon, known as Mountain View
Shopping Centre ("Mountain View") for a purchase consideration of R10 000
000 (ten million rand). The various conditions precedent have now been
met, including a due diligence exercise, and accordingly the transaction
is now being announced.
Background to Mountain View
Mountain View is an established shopping centre in Gordon`s Bay and has
some top tenants currently renting space within the centre, namely First
National Bank, STAX, Friendly Grocer to name but a few. The property is
well positioned on a busy arterial road connecting Gordon`s Bay with the
Sir Lowry Pass and has substantial unused bulk available on the site
which can be utilised for future development opportunities.
Rationale
The purchase of Mountain View is in line with the Group`s strategy to
acquire properties through which to achieve its vision of positioning
Orion as a significant property owner and developer in the market. The
purchase of Mountain View will enhance Orion`s earnings and will provide
good opportunities for organic growth.
Terms of the Acquisition
The agreement was signed on 15 January 2008 but the purchase will only be
effective once the transfer of the property has been completed. The
transfer is currently in process. The purchase consideration price
payable to the Sellers for Mountain View, is R10 000 000 and is to be
discharged by Orion through a cash payment, together with VAT, if
applicable, of R8 000 000 in cash upon registration of transfer of the
property into the name of Orion and R2 000 000 which will be settled by
the issue of 3 333 333 new Orion linked units at 60 cents per linked unit
to the Sellers. All conditions precedent in terms of the agreement have
been met.
The purchase of Mountain View is subject to the normal terms and
warranties usual for a transaction of the nature contemplated.
The property is being acquired at a historic net rental income yield of
9.6 % and will accordingly enhance the earnings of Orion and complement
the Orion property portfolio.
Pro forma financial effects
Set out in the table below are the pro forma financial effects of the
purchase of Mountain View, which have been prepared for illustrative
purposes only. This is to provide information about how the purchase of
Mountain View might have affected the financial information had the
transfer of the property taken place at 1 July 2007. At this stage the
transfer of the property is in process and is not yet complete. The pro
forma financial effects, because of its nature, may not give a true
reflection of the financial position, the cash flow position, and the
results of operations or the changes in equity of Orion.
The pro forma financial effects have been prepared in compliance with
SAICA guidelines and IFRS and are as follows:
Fully diluted information Before After % change
Earnings per share (cents) 0.56 0.53 (6.80%)
Diluted earnings per share 0.56 0.53 (6.80%)
(cents)
Headline profit (loss) per (0.24) (0.25) (2.60%)
share (cents)
Diluted headline profit (0.24) (0.25) (2.60%)
(loss) per share (cents)
Net asset value per share at 43.52 43.80 0.64%
end of period (cents)
Tangible net asset value per 43.52 43.80 0.64%
linked unit at year-end
(cents)
Number of shares at end of 192,820,910 196,154,243 1.73%
period
Weighted number of shares 192,820,910 196,154,243 1.73%
Diluted number of shares 192,820,910 196,154,243 1.73%
Notes:
i) The earnings and headline earnings per Orion linked unit, as set out
in the "Before" column of the table, are based on the unaudited
financial results of Orion for the 6 months ended 31 December 2007
and 192 820 910 weighted average number of Orion linked units in
issue.
ii) The earnings and headline earnings per Orion linked unit, as set out
in the "After" column of the table, are based upon the unaudited
financial results of Orion for the 6 months ended 31 December 2007,
and 196 154 243 weighted average number of Orion linked units in
issue and the assumptions that:
- the purchase of Mountain View was effective from 1 July 2007
and the results from Mountain View were included from such
date;
- the cash portion of the purchase price of R8 000 000 was paid
in full in cash by the purchaser and the issue of 3 333 333 new
Orion linked units at 60 cents was undertaken as at 1 July
2007;
- the assumption of a notional taxation rate of 28%;
- there were no transfer duties on the transaction; and
- there were no other additional costs incurred relating to the
Mountain View purchase.
iii) The net asset value and tangible net asset value per Orion linked
unit, as set out in the "Before" column of the table, are based upon
the unaudited Balance Sheet of Orion at 31 December 2007 and 192 820
910 Orion linked units in issue.
iv) The net asset value and tangible net asset value per Orion linked
unit, as set out in the "After" column of the table, are based upon
the unaudited Balance Sheet of Orion at 31 December 2007 and 196 154
243 Orion linked units in issue and the assumptions that:
- the purchase of Mountain View was effective from 1 July 2007;
- the Purchase Price of R10 000 000 was settled on 1 July 2007
through a cash payment of R8 000 000 and the issue of 3 333 333
new Orion linked units at 60 cents; and
- any excess payment above net asset value would be attributed to
the underlying property.
Johannesburg
16 May 2008
Sponsors
Arcay Moela Sponsors
(Proprietary) Limited
Registration no. 2006/033725/07
Date: 16/05/2008 09:20:01 Produced by the JSE SENS Department.
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