| Thu 29 Oct 2009, 9:56 | | PAP - Pangbourne - Disposal Of A Subsidiary |
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PAP
PAP
PAP - Pangbourne - Disposal Of A Subsidiary
PANGBOURNE PROPERTIES LIMITED
(Registration number 1987/0002352/06)
JSE CODE: "PAP" & ISIN: ZAE000005252
("Pangbourne" or "the company")
DISPOSAL OF A SUBSIDIARY
INTRODUCTION
Unitholders are advised that an agreement was concluded between Pangbourne, as
vendor, and Fortress Income Fund Limited, a newly listed property loan stock
company ("Fortress"), as purchaser, pursuant to which Pangbourne disposed of the
entire issued share capital of and shareholder claims against its wholly owned
subsidiary Fortress Income 3 (Proprietary) Limited ("Fortress Income 3") to
Fortress("the disposal agreement")(hereinafter referred to as "the
transaction"). Fortress Income 3 owns 56 properties valued at R998,215 million
("the properties") and 14 814 814 participatory interests in Capital Property
Fund, a collective investment scheme in property listed on the JSE Limited,
valued at R100 million.
Pangbourne signed surety for Fortress Income 3, whilst still a wholly owned
subsidiary of Pangbourne, in respect of a bank loan on the basis that Pangbourne
was released from the suretyship on the listing of Fortress on 22 October 2009.
TERMS AND CONDITIONS PRECEDENT
With effect from 1 October 2009 ("the effective date"), Pangbourne disposed of
Fortress Income 3 for an aggregate purchase price of R1 098 215 000 which
purchase price is to be settled as follows:
- by the allotment and issue or delivery to Pangbourne of 58 621 875 "A"
linked units in Fortress at R9,00 per "A" linked unit and 58 621 875 "B"
linked units in Fortress at R1,00 per "B" linked unit; and
- the balance of the purchase price for cash in an amount of R511 996 250.
As at the date of this announcement, 6 properties valued at R62,35 million have
not been transferred from Pangbourne to Fortress Income 3. Transfer of these
properties are in process and expected to be registered shortly.
The disposal agreement contains warranties normal for disposals of this nature.
All of the conditions precedent to which the disposal agreement was subject have
been fulfilled.
RATIONALE FOR THE TRANSACTION
The disposal of Fortress Income 3 further rationalises the number of properties
to more manageable levels, in particular disposing of properties valued at less
than R10 million.
The company will utilise the cash portion of the sale proceeds to reduce debt.
Pangbourne may dispose of the Fortress "A" and "B" linked units, depending on
market circumstances, to reduce debt.
THE PROPERTIES
Details of the properties including property description, region, sector,
forecast weighted average rental per square metre, rentable area, purchase price
and the valuation attributed by Peter Parfitt of Quadrant Properties
(Proprietary) Limited, an idependent professional associated valuer, as at 1
October 2009 to each of the properties is as follows:
Property description Region Sector Forecast Rentabl Purchase
weighted e area price/
average valuatio
rental n
per m2
(R) (m2) (R`000)
Erf 695 Halfway House GP Industrial 31,59 5 033 15 200
Ext 13
Portion 17 of Erf 2692 KZN Industrial 48,40 1 914 12 400
Umhlanga Rocks
Ptn 1 of Erf 475 Kya GP Industrial 64,41 1 227 9 450
Sands Ext 56
Erf 162, 163 and 164 GP Industrial 24,52 8 587 18 900
Anderbolt
Ext 44
Erven 103 and 104 GP Industrial 23,60 7 928 16 900
Anderbolt Ext 26
Erven 76 and 77 GP Industrial 21,22 17 132 34 700
Anderbolt Ext 14,
Erven 253 and 254,
consolidated to Erf
257 Anderbolt Ext 72
Erf 255 Anderbolt GP Industrial 20,90 9 185 17 900
Erf 26 Grand Central GP Industrial 21,83 4 615 9 550
Ext 11
Erven 10385 and KZN Industrial 33,09 2 071 6 200
10386, Durban
Erf 75 Kyalami Park GP Industrial 31,80 2 470 10 300
Erven 643, 644 and 645 GP Industrial 30,37 3 224 10 700
Denver Ext 4
Erf 66 Kyalami Park GP Industrial 83,54 1 296 11 700
Erf 1 Wilbart GP Industrial 26,91 1 099 3 125
Erf 262 Eastgate Ext GP Industrial 26,70 8 035 21 500
13
Ptn 15 of Erf 323 KZN Industrial 40,84 1 266 5 700
Durban North
Erf 1781 Triomf GP Retail 35,84 6 511 18 500
Erven 49 and 50 GP Industrial 25,94 18 459 46 600
Longdale Ext 4
Erf 19 Kramerville GP Industrial 35,86 3 128 11 000
Erf 641 Denver Ext 4 GP Industrial 35,09 1 631 5 400
Erf 28 Wilbart GP Industrial 22,58 3 473 10 400
Erf 249 Strijdom Park GP Industrial - 1 501 4 600
Ext 11
Ptn 32 of Erf 391 KZN Industrial 37,80 1 344 5 000
Springfield
Erf 493 Spartan Ext 3 GP Industrial 27,41 3 029 9 800
Erf 7682 Pinetown Ext KZN Industrial 30,88 1 491 4 600
72
Erf 13026 Pinetown Ext KZN Industrial 45,19 1 610 8 200
144
Erven 377 and 378 GP Industrial 19,21 1 088 3 600
Jetpark Ext 20
Erf 245 Hoogland Ext GP Industrial 38,72 2 120 9 200
22
Ptn 2 of Erf 246 GP Industrial 38,62 1 160 5 000
Randjespark Ext 75
Erf 45 Kyalami Park GP Industrial 37,23 1 428 5 600
Ptn 1 of Erf 1380 GP Industrial 15,82 1 680 3 800
Germiston Ext 20
Erf 18 Kyalami Park GP Industrial 44,92 2 009 8 300
Erf 254 and 256 GP Industrial 28,52 4 933 16 100
Spartan
Erven 9303 to 9307 and KZN Industrial 26,74 31 145 78 400
Ptns 3 and 4 of Erf
9314 Durban
Ptn 6 (a portion of GP Industrial 33,62 1 578 6 600
Ptn 5) Erf 210
Randjespark Ext 72
Erven 2079 and 2080 GP Industrial 23,71 4 217 12 300
Silverton Ext 42
Erven 200 and 201 GP Industrial 53,91 8 871 48 300
Meadowdale Ext 6
Ptns 3, 4 and 7 of Erf GP Retail 56,08 11 371 53 500
65558 Sebokeng Unit 10
Ext 1
Ptn 3 of Farm 510, De LP Retail 52,83 6 924 39 100
Kaffersdrift
Erf 956 Ferndale GP Commercial 67,38 5 503 40 300
Ptn 16 and Ptn 28 of GP Industrial 35,64 2 810 8 900
Erf 210 Randjespark,
Ext 72
Erf 372 Ormonde Ext 5 GP Commercial 42,47 6 188 31 390
Ptn 3 Erf 1228 New KZN Industrial 37,60 1 357 5 150
Germany
Ptns 5 to 9 of Erf 803 GP Commercial 83,31 2 046 20 200
Bryanston
Erf 315 Randjespark GP Industrial 22,33 3 203 15 800
Ext 116
Ptn 5 of Erf 47 GP Commercial 98,17 851 8 000
Bryanston
Erven 187, 188 and 189 GP Industrial 23,93 3 184 10 300
Kya Sand Ext 6
RE of Erf 456 and Erf GP Industrial 46,20 2 917 15 400
457, Kya Sands Ext 52
Erf 47 Riverside MP Industrial 47,35 1 110 5 900
Industrial Park
Erf 741 Spartan Ext 21 GP Industrial 38,15 1 800 7 700
Erf 46 Kyalami Park GP Industrial 52,14 1 000 5 850
RE of Erf 1824 and Erf WC Retail 62,39 13 409 110 000
2001 Eersterivier
Erf 13025 Pinetown Ext KZN Industrial - 2 446 9 000
144
RE of Ptn 24 of Erf KZN Industrial 28,51 2 783 10 200
391 Springfield
Erf 26 Longmeadow GP Industrial 55,00 910 5 800
Business Estate Ext 1
Erf 13079 Pinetown Ext KZN Industrial - 1 863 6 700
144
Erf 407 and 408 KZN Retail 53,31 10 116 63 500
Nongoma
FINANCIAL INFORMATION
The pro forma financial effects of the transaction on Pangbourne`s financial
results for the year ended June 2009 ("the financial information") are set out
below, and have not been reviewed or reported on by the company`s auditors.
The pro forma financial effects of the transaction on the 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 impact the financial
information. Due to their nature, the pro forma financial effects may not fairly
present Pangbourne`s financial position, changes in equity, and results of
operations or cash flows after the transaction. The pro forma financial effects
are the responsibility of the directors of Pangbourne.
The pro forma effect of the transaction on the financial information of
Pangbourne for the year ended June 2009 is as follows:
Unadjusted Pro forma % Change
before the after the
transaction transaction
(cents) (cents)
Earnings per linked unit 84,57 68,56 (18,9%)
Headline earnings per linked unit 56,65 41,34 (27,0%)
Distribution per linked unit 133,65 108,55 (18,8%)
Weighted average number of linked 398 088 528 398 088 528
units in issue
Notes and assumptions:
- The amounts set out in the "Unadjusted before the transaction" column have
been extracted without adjustment from the financial information.
- The financial information and the pro forma financial effects thereon have
been prepared in compliance with International Financial Reporting
Standards.
- The transaction is assumed for the purposes of earnings per linked unit,
headline earnings per linked unit and distribution per linked unit to have
been implemented on 1 July 2008.
- The disposal was at the fair value of the assets disposed of.
- The historical rental income and related property expenditure was extracted
from the financial information.
- The cash proceeds of R511 996 250 has been utilised to reduce interest
bearing liabilities at an effective interest rate of 9,5%.
- R586 218 750 of the purchase consideration was received in the form of 58
621 875 "A" linked units in Fortress at R9,00 per "A" linked unit and 58
621 875 "B" linked units in Fortress at R1,00 per "B" linked unit. Fortress
listed on the JSE Limited in October 2009. The forecast yield of 10,75% on
the "A" linked units and 9% on the "B" linked units, as reported on by the
reporting accountants in the prospectus issued by Fortress dated 16 October
2009, have not been taken into account in the calculation of these
financial effects in compliance with the SAICA Guide on Pro Forma Financial
Reporting.
CATEGORISATION OF THE TRANSACTION
The transaction is a category 2 transaction in terms of section 9.5(a) of the
Listings Requirements of the JSE Limited.
29 October 2009
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 29/10/2009 09:56:22 Produced by the JSE SENS Department.
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