| Thu 26 Mar 2009, 10:30 | | ORE - Orion Real Estate - Purchase of property - Stand 962 Ferndale (Pty) Ltd |
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ORE
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ORE - Orion Real Estate - Purchase of property - Stand 962 Ferndale (Pty) Ltd
ORION REAL ESTATE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/021085/06)
Share Code: ORE ISIN: ZAE000075651
("Orion" or "the company")
PURCHASE OF PROPERTY - STAND 962 FERNDALE (PTY) LTD
Introduction
Shareholders are advised of the purchase of a property Stand 962 Ferndale (Pty)
Ltd ("the Seller") which is held under Deed of Transfer No. T39229/1997,
situated at 296 Kent Street, Ferndale, Randburg, for the purchase price of R30
000 000 by Orion ("the purchaser"), subject to the conditions precedent noted
below. The effective date of the transaction will be the date of transfer of the
property into the name of the purchaser. The seller is a related party to Orion.
The property measures 6 772 m2 and is fully let. The property derives rental
income from one tenant in terms of a 5 year lease, of which 2 years remain. The
weighted average rental per square metre is R33.96 per square metre with a 5
year renewal option at market related % escalation at renewal of the lease.
Pursuant to the acquisition, the average annualised yield is expected to be
round 10.3%.
Conditions Precedent
The purchase was subject to the following conditions precedent:
- the Purchaser will have procured a loan in the amount equal to the cash
price of R17 500 000 within 60 days from the successful completion of a due
diligence investigation. Such loan being procured on such terms that are
acceptable in the sole discretion of the Purchaser secured by the first
mortgage bond over the property;
- the Purchaser conducts and completes a due diligence investigation in
respect of the property 7 days from signature date;
The loan was procured on 6 March 2009. The acquisition is now subject to an
approval by the JSE and shareholder approval being obtained within 90 days from
procurement of the loan.
Terms of the Purchase
In terms of the agreement dated 21 November 2008, the purchase consideration of
R30 million is payable as follows:
* R12 500 000 by way of issue of Orion linked units at the 30 day volume
weighted average price (VWAP) on date of registration; and
* the payment of R17 500 000 by the Purchaser to the Seller by way of cash.
Rationale for the purchase
The purchase was effected in the ordinary course of business in line with the
company`s strategy of the expansion of the Orion group.
Shareholder approval
The purchase of the property will require the approval of Orion shareholders in
general meeting. A circular, containing full details of the purchase and
incorporating a notice of general meeting, will be posted to shareholders in due
course.
Pro forma financial effects of the Purchase
The table below summarises the pro forma financial effects of the purchase on
the published audited results of Orion for the six months ended 30 June 2008, as
though the purchase had been in effect from 1 July 2008 for income statement
purposes and at 30 June 2008 for balance sheet purposes.
The pro forma financial effects, which are the responsibility of the directors,
have been prepared for illustrative purposes only and, due to their nature, may
not fairly present Orion`s financial position, changes in equity, results of
operations or cash flows.
Published Pro forma
30 June 30 June 2008 Percentage
2008 After change (%)
Before
Earnings per linked unit 10.89 9.18 -15.70%
(cents)
Headline losses per linked -4.63 -3.70 20.08%
unit (cents)
Net asset value per linked 49.16 45.90 -6.63%
unit (cents)
Net tangible asset value 49.16 45.90 -8,.26%
per linked unit (cents)
Weighted average linked 210 923 254 289 179 20.56%
units in issue 488
Linked units in issue at 226 938 270 304 248 19.11%
period end 557
Assumptions:
1. The "Before" column is extracted from the audited results for the year
ended 30 June 2008 as published.
2. The "After" column in terms of net asset and net tangible asset value per
share reflects the adjustment for the purchase price of the property of R30
000 000, settled through a bond of R17 500 000 and the issue of 43 365 691
shares at an assumed issue price of 29 cents per linked unit.
3. The "After" column in terms of earnings and headline loss per linked unit
reflects the adjustment for the results in relation to the property,
adjusted for an increase in the interest payable on the higher bond of R17
500 000 at the newly announced prime interest rate of 13%, as well as
notional taxation at 28%.
4. The weighted average linked units and linked units in issue at period end
have assumed to increase through the issue of 43 365 691 new linked units.
Circular to shareholders
A circular to shareholders, incorporating an independent valuation on the
property and a notice of general meeting is currently being prepared and will be
forwarded to shareholders in due course.
Johannesburg
26 March 2009
Sponsor
Arcay Moela Sponsors (Proprietary) Limited
Date: 26/03/2009 10:30:02 Produced by the JSE SENS Department.
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