| Mon 3 Aug 2009, 17:53 | | RES - Resilient Property Income Fund - Disposal of |
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RES - Resilient Property Income Fund - Disposal of a Portfolio of Properties t
Capital Property Fund
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/016851/06
Share code: RES & ISIN: ZAE000043642
("Resilient")
DISPOSAL OF A PORTFOLIO OF PROPERTIES TO CAPITAL PROPERTY FUND
INTRODUCTION
Linked unitholders are advised that the Resilient group (comprising Resilient,
its subsidiaries and associate company)has disposed of a portfolio consisting of
three industrial properties and a 25% undivided share in vacant zoned land (the
"Resilient portfolio") to Capital Property Fund ("Capital") (the "transaction").
RATIONALE FOR THE TRANSACTION
As a result of Resilient's acquisition of 100% of the linked units in
Diversified Property Fund Limited in 2008, Resilient acquired various industrial
properties. In line with Resilient's strategy of being a retail focused fund,
Resilient is gradually disposing of these industrial properties.
TERMS
The effective date of the transaction is 1 August 2009 and the consideration of
R611,5 million (excluding VAT) will be settled on the date of registration of
transfer of ownership of the Resilient portfolio by the issue of 98 629 032
Capital units at R6,20 per unit to various subsidiaries within the Resilient
group.
THE RESILIENT PORTFOLIO
This portfolio, based on valuations as at 1 August 2009, is valued at R611,5
million and consists of three industrial properties in Gauteng with a total
rentable area of 132 770 m2 at an average rental of R30,42 per m2 and a 25%
undivided share of 61,5 ha vacant zoned industrial land in the Western Cape
("Montague Business Park"). The weighted average rental escalation by rentable
area for these properties is 8,25% and the weighted average annualised property
yield is 9,5%. For more detailed information on the Resilient portfolio, linked
unitholders are referred to the Capital announcement released on SENS on 24 June
2009.
The transaction is a Category 2 transaction in terms of the Listings
Requirements of the JSE Limited.
FINANCIAL INFORMATION
The pro forma financial effects of the transaction on Resilient's basic and
diluted earnings per share and basic and diluted earnings per linked unit for
the year ended 31 December 2008 are set out below. The pro forma financial
effects of the transaction on Resilient's distribution per linked unit, headline
and diluted headline earnings per linked unit, net asset value and tangible net
asset value per linked unit are not material and have not been disclosed.
The pro forma financial effects have been prepared for illustrative purposes
only to provide information on how the transaction may have impacted on the
historical financial results of Resilient for the year ended 31 December 2008.
Due to their nature, the pro forma financial effects may not fairly present
Resilient's financial position, changes in equity, results of operations or cash
flows after the transaction. The pro forma financial effects are the
responsibility of the directors of Resilient.
Unadjusted Pro forma % Change
before the after the
transaction transaction
(cents) (cents)
Basic earnings per share 62,26 74,97 20,4%
Basic earnings per linked unit 232,41 247,80 6,6%
Diluted earnings per share 59,42 71,56 20,4%
Diluted earnings per linked unit 221,83 236,53 6,6%
Weighted average number of 226 751 719 226 751 719
shares/linked units in issue
Diluted weighted average number of 237 562 530 237 562 530
shares/linked units in issue
Notes and assumptions:
- The amounts set out in the "Unadjusted before the transaction" column have
been extracted, without adjustment, from the audited annual report of
Resilient for the year ended 31 December 2008.
- The transaction is assumed to be implemented on 1 January 2008 for purposes
of basic and diluted earnings per share and basic and diluted earnings per
linked unit.
- The Resilient portfolio was disposed of at the fair value of the investment
properties of R611,5 million which was settled by the issue of 98 629 032
Capital units at R6,20 per unit.
- A profit of R28,3 million was recognised on the disposal of the Resilient
portfolio.
- Resilient is assumed to hold in excess of 20% of Capital's units throughout
the year ended 31 December 2008 and Capital is accordingly recognised as an
associate and accounted for using the equity method. The following
adjustments were taken into account as a result of equity accounting
Capital:
- R35,7 million was eliminated from distributable income from
investments; and
- R82,7 million, which represents Resilient's share of Capital's
distributable income, was recognised in distributable income from
associates.
- The actual historical rental income and related property operating expenses
for each property in the Resilient portfolio, other than Montague Business
Park, was extracted from the historical financial information forming part
of the Resilient group's audited results for the year ended 31 December
2008.
- Interest of R7,5 million which was capitalised on Montague Business Park,
in accordance with IAS 23 (Borrowing Costs), was eliminated.
3 August 2009
Sponsor
Java Capital (Proprietary) Limited
Date: 03/08/2009 17:40:01 Produced by the JSE SENS Department.
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