| Tue 27 Oct 2009, 12:08 | | HYP - Hyprop - Conclusion Of A Consultancy Agreement Between Hyprop And Redefine |
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HYP
HYP
HYP - Hyprop - Conclusion Of A Consultancy Agreement Between Hyprop And Redefine
Income Fund Limited
Hyprop Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/005284/06)
Share code: HYP
ISIN: ZAE000003430
("Hyprop" or "the company")
CONCLUSION OF A CONSULTANCY AGREEMENT BETWEEN HYPROP AND REDEFINE INCOME FUND
LIMITED
1. INTRODUCTION
Combined unitholders are advised that Hyprop has concluded a consultancy
agreement (the "agreement") with Redefine Properties (Proprietary) Limited
("Redefine Properties"), a wholly-owned subsidiary of Redefine Income Fund
Limited ("Redefine") in terms of which Redefine Properties will (subject to
Hyprop combined unitholder approval) provide consultancy services to Hyprop
as further described below.
2. RATIONALE
Hyprop currently outsources all of its asset management and property
administration functions to Madison Property Fund Managers Limited
("Madison"), a wholly-owned subsidiary of Redefine. Following a decision by
the Hyprop board to conduct these functions in-house in keeping with the
listed property sector trend of internalised management, Hyprop has given
notice so as to terminate these arrangements with effect from 31 December
2009.
The advantages of internalising Hyprop`s asset management and of securing
the consultancy services in terms of the agreement, include:
- the yield enhancement that will result from the lower costs of
internal management; and
- the continued strategic involvement of certain key Redefine executives
recognised as having extensive knowledge of the property market.
3. SALIENT PROVISIONS OF THE AGREEMENT
- the agreement will commence on 1 January 2010 and remain in force
until 30 June 2011 (the "initial period"), so that any possible
renewal negotiations will coincide with Hyprop`s annual general
meeting set to take place during June 2011;
- Hyprop shall have the right (but shall not be obliged) to renew the
agreement for further 12 month periods after the initial period on
written notice to Redefine Properties of not less than three months
(subject to Hyprop and Redefine Properties reaching agreement as to
remuneration and subject to the prior approval of Hyprop unitholders
(excluding the Redefine group) having been obtained for such renewal
as required in terms of the JSE Listings Requirements);
- the remuneration payable to Redefine by Hyprop for all services
rendered by Redefine in terms of the agreement shall be R1,5 million
(exclusive of VAT) per month payable monthly in arrears (effectively
R18 million exclusive of VAT per annum); and
- no entity in the Redefine group shall be entitled to any remuneration
over and above the abovementioned fee whether through commissions,
bonuses, promoter`s fees, asset movement fees, corporate finance fees,
share options or any other form of remuneration or reward whatsoever,
save only for any fees payable to the Redefine group in respect of its
representation on the Hyprop board of directors or on any Hyprop board
sub-committee.
4. CONDITION PRECEDENT
The agreement is subject to the approval of Hyprop combined unitholders in
general meeting (excluding Redefine and its associates), as required in
terms of section 13.40(a) of the JSE Listings Requirements.
5. FURTHER DOCUMENTATION
A circular containing further details of the agreement and a notice of
general meeting will be sent to Hyprop combined unitholders in due course.
27 October 2009
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 27/10/2009 12:08:01 Produced by the JSE SENS Department.
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