| Thu 24 Feb 2011, 13:00 | | RIN - Redefine Properties International Limited - Subscription for Stapled |
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RIN
RIN
RIN - Redefine Properties International Limited - Subscription for Stapled
Securities in Cromwell
Redefine Properties International Limited
(formerly Kalpafon Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2010/009284/06)
JSE share code: RIN ISIN Code: ZAE000149282
("RIN" or "the company")
SUBSCRIPTION FOR STAPLED SECURITIES IN CROMWELL
INTRODUCTION
Linked unitholders are advised that the company has through its 82% held
subsidiary Redefine Australian Investments Limited("RAIL") entered into a call
option agreement ("the call option agreement") in terms of which RAIL has agreed
to subscribe for the lesser of 35 000 000 stapled securities or that number of
stapled securities which will result in RAIL holding 22.9% of Cromwell Property
Group ("subscription securities") ("the transaction").
RAIL currently holds a 19.59% interest in Cromwell Property Group ("Cromwell").
Post the transaction, RAIL is expected to hold a 22.56% interest in Cromwell.
Cromwell, which is listed on the Australian Stock Exchange, is an Australian
Property Trust whose capital consists of stapled securities comprising units in
Cromwell Diversified Property Trust (an Australian Real Estate Investment Trust)
which are contractually bound to ordinary shares in Cromwell Corporation Limited
(an Australian property funds management business).
RATIONALE FOR THE TRANSACTION
The transaction is in line with RIN`s objective of increasing its presence in
the Australian property market and is expected to be earnings enhancing for
linked unit holders in the medium to long term.
The transaction consolidates RAIL`s position as the largest stapled security
holder in Cromwell, and ensures RIN can maintain a significant influence on the
affairs of Cromwell going forward.
Significantly Cromwell has agreed to the appointment of a second RIN director to
the board of Cromwell alongside Marc Wainer.
Based on the current market price of Cromwell stapled securities, the
transaction will result in RIN`s net asset value increasing by approximately AUD
2.1 million.
SALIENT TERMS OF THE TRANSACTION
In terms of the call option agreement, Cromwell, may at any time between 1 March
2011 and 31 March 2011, call on RAIL to subscribe for the subscription
securities. RAIL will pay the subscription amount on 1 March 2011 or a date to
be determined by the Cromwell board in its absolute discretion which date shall
be no later than 30 June 2011.
The subscription amount paid by RAIL is AUD 0.7071 per subscription security
multiplied by the number of subscription securities which based on 35 000 000
subscription securities will be AUD 24.75 million.
RAIL does not have any right to subscribe for the subscription securities unless
required to do so by Cromwell.
The subscription securities will be entitled to distributions from Cromwell for
the relevant calendar quarter pro rata to the number of days the subscription
securities have been in issue during that quarter and will rank pari passu in
all respects with other stapled securities in issue.
The call option agreement contains warranties typical for subscriptions of this
nature.
Other than in respect of Cromwell`s option to call on RAIL to subscribe for the
subscription securities, all conditions precedent to the transaction have been
fulfilled.
The transaction is being funded 100% by a loan facility from Investec Bank
(Australia) Limited ("Investec") with the following terms:
- The period of the loan facility is 2 years with an interest rate equal
to 4% per annum over the Australian Bank Bill Swap Bid Rate (currently
approximately 5.3%).
- As security for the facility, approximately 105 million Cromwell
stapled securities will be deposited with Investec.
- The loan is non-recourse to RIN.
FINANCIAL EFFECTS
The pro forma financial effects of the transaction on the distribution, earnings
and headline earnings per linked, based on the profit forecast of RIN for the
year ending 31 August 2011 which is contained in the prospectus issued by RIN on
23 August 2010, are not material and have not been disclosed.
The pro forma financial effects of the transaction on the net asset value and
net tangible asset value per linked unit, based on the pro forma statement of
financial position which was published on 4 November 2010 as part of RIN`s
results for the period ended 31 August 2010, are not material and have not been
disclosed.
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.
24 February 2011
Sponsor to Redefine Properties International Limited
Java Capital
Date: 24/02/2011 13:00:01 Produced by the JSE SENS Department.
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