| Thu 5 May 2011, 8:01 | | CCO - Capital & Counties Properties PLC - Placing to fund acquisition |
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CCO
CCO - Capital & Counties Properties PLC - Placing to fund acquisition
opportunities at Covent Garden
Capital & Counties Properties PLC
(Incorporated and registered in the United Kingdom and Wales with registration
Number 07145041 and registered in South Africa as an external company with
Registration Number 2010/003387/10)
JSE code: CCO
ISIN: GB00B62G9D36
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
05 May 2011
Capital & Counties Properties PLC ("Capco" or the "Company")
Placing to fund acquisition opportunities at Covent Garden
Capco today announces the underwritten placing of up to 62,100,000 new
ordinary shares of 25 pence in the capital of the Company (the "Placing")
representing approximately 9.99 per cent. of the Company`s issued share
capital immediately prior to the Placing.
Highlights of the Placing
- Underwritten placing of up to 62,100,000 new ordinary shares
- Capco`s strategy of improving rental levels at Covent Garden is ahead of
plan and the Board sees further opportunities to extend this strategy
through further near-term acquisitions across the estate
- Proceeds of the Placing will predominantly be used to fund acquisitions
and also the ongoing repositioning of assets at Covent Garden
Background to and reasons for the Placing
At the time of the demerger from Liberty International PLC (now Capital
Shopping Centres Group PLC) (the "Demerger"), Capco was allocated sufficient
capital to undertake and complete the strategies outlined at that time for
each of its estates. Capco has made significant progress implementing those
strategies, in particular in respect of Covent Garden and the Earls Court
site, where it continues to see significant opportunity for value creation.
In the Covent Garden estate, progress is ahead of plan and as a result the
Company sees an opportunity to extend its strategy further across the estate.
This strategy includes:
- increasing prime space within the estate, and therefore increasing
average rental levels;
- improving both the retail and food & beverage (F&B) tenant mix;
- growing the estate through acquisitions to strengthen Capco`s influence
across the area;
- pursuing change of use strategies where profitable to do so, focusing
particularly on converting upper floors currently used for offices to
residential usage; and
- creating new space through renovation and redevelopment.
Highlights for the Covent Garden estate since the Demerger include:
- attracting a number of new high-profile tenants as part of the
repositioning of the estate, including Rugby Ralph Lauren, Burberry Brit,
Laduree and Balthazar;
- ERV as at 31 December 2010 was GBP37.5 million, up 12 per cent. on a like-
for-like basis since 31 December 2009, under-pinning the valuation uplift
of the estate in 2010 of 14 per cent. The initial ERV target for the
estate of GBP40 million by December 2012 has been increased to a range of
GBP43 - GBP45 million by December 2013;
- continuing tenant management contributing to increased rental tone and
ERV. In 2010, top level prime rentals on James Street have been achieved
at levels of 10 per cent. over the previous passing rent, and a total of
74 leasing transactions were completed at a level 9 per cent. above
December 2009 ERV levels. This progress has continued with leasing
transactions in 2011 achieving an average of 2.6 per cent. above ERV at
the point of lease activity;
- acquiring 37 King Street and 1a Henrietta Street (through an asset swap);
and
- creating opportunities for further flagship retail units (subject to
planning consent) at Russell Chambers and 1a Henrietta Street.
Of the GBP75 million allocated at the time of the demerger for capital
expenditure on the Covent Garden estate, GBP19 million has been spent and a
further GBP15 million committed on a number of initiatives including lease
buybacks, the redevelopment at Flower Cellars and the residential conversion
at 34 Henrietta Street. The remaining capital is earmarked for identified
projects across the estate, certain of which are subject to planning consent.
Capco`s strategy at Covent Garden, to date, has focused on the repositioning
of existing assets together with some small infill acquisitions. Capco has
identified a number of potential acquisitions of various sizes across Covent
Garden that the Board believes will become available in the coming months,
which would offer the opportunity to consolidate Capco`s ownership in the area
and present repositioning opportunities in line with the strategies applied to
Capco`s existing estate. One such opportunity, which is of meaningful scale,
is currently under discussion and, if it proceeds, would be expected to sign
in the short term. The Company expects that any such acquisitions would be at
or around valuation yields consistent with those of Capco`s existing
properties at Covent Garden.
Expected benefits of the Placing
The Board expects that the acquisitions and projects at Covent Garden, which
will be funded with the proceeds of the Placing, will accelerate Capco`s
strategy to create a contemporary luxury destination and will be accretive to
both ERV and net asset value per share over time. The returns on capital
expenditure are expected to be similar to those achieved on previous spend
across the Covent Garden estate.
Conference call
There will be a conference call at 8.30am BST on 05 May 2011 to discuss this
announcement. A copy is available for download from our website at
www.capitalandcounties.com and hard copies can be requested via the website or
by contacting the company (email feedback@capitalandcounties.com or telephone
+44 (0)20 3214 9153).
Interim Management Statement
The following is the text from the Interim Management Statement which has been
separately released today.
Highlights
- The repositioning of the Covent Garden estate continues apace with the
opening of Burberry Brit in April 2011, and further key store openings
due throughout the year including Rugby Ralph Lauren, Laduree and Links
of London
- Good progress has been made with the conversions at 34 Henrietta Street
and the Flower Cellars (for Balthazar)
- The public launch of Sir Terry Farrell`s masterplan for the Earls Court &
West Kensington Opportunity Area (ECOA) was well received with over 1,000
visitors attending the exhibition
- The supplementary planning document for the ECOA was published for
consultation in March by the London Borough of Hammersmith & Fulham, the
Royal Borough of Kensington & Chelsea and the Greater London Authority
Covent Garden
The positive momentum generated in Covent Garden in 2010 has continued with
the openings of Burberry Brit on King Street and Liam Gallagher`s fashion
concept Pretty Green on the East Piazza. This affirms the estate as the new
destination for contemporary luxury in the West End.
With a number of additional openings including Rugby Ralph Lauren, Links of
London, Laduree and Balthazar anticipated throughout the year, demand remains
strong from high quality retail and restaurant brands with offers at or above
ERV being received for available space. Letting transactions in 2011 to date
have been concluded at an average of 2.6 per cent. above ERV at the point of
lease activity. In addition discussions are advanced with an international
brand for a new concept for the second retail unit which will be created from
the site previously occupied by Ponti`s. Footfall for the 12 month period from
April 2010 to March 2011 was 45.4 million. The EPRA adjusted occupancy rate
for the estate was 96.4 per cent. as at 31 March 2011.
Work is due to start on site at the Flower Cellars, to transform this for
Balthazar, in May and ongoing improvement works to the Market Building and the
public realm continue.
Construction continues at 34 Henrietta Street to create the first four premium
apartments under the Covent Garden Living brand. The work is on track and due
to be completed in December. Expressions of interest have already been
received for the three large scale units and a penthouse and demand is
expected to be strong when they are delivered to market. A planning
application has been made to create a further four apartments in Russell
Chambers, another high profile site overlooking the piazza.
Plans for the recently acquired 1a Henrietta Street are also taking shape to
create a new flagship commercial and residential space anchoring the south
west corner of the piazza. A planning application for the scheme will be made
in the second half of the year.
Earls Court & Olympia
The events business has had a good first quarter with 82 per cent. of the
annual budgeted licence fees contracted as at 31 March 2011. The International
Gaming Exhibition, Toy Fair and the Retail Business Expo were notable
successes and performed over budget. However, certain shows, including BETT
and Top Gear Live, have been lost reflecting the competitive nature of the
market.
In February, Emap achieved a first taking over both Earls Court and Olympia,
and in March the reinvigorated Ideal Home Show brought over 270,000 visitors
to Earls Court. This year`s highlight was `The Prince`s House`, HRH The Prince
of Wales`s eco-living concept, a low carbon home made from natural and
recycled materials.
At Olympia, construction on the new 90,000 sq ft exhibition space to replace
the West Hall continues on time and on budget.
ECOA masterplan
The planning process for the Earls Court & West Kensington Opportunity Area
(ECOA) has seen an active start to the year and has continued to progress
well.
An exhibition to launch Sir Terry Farrell`s masterplan for the ECOA was held
at Earls Court and was visited by over 1,000 people from the local area
including residents, businesses, amenity groups and students from local
schools and universities. Community stakeholders were able to view a range of
new and improved social and physical infrastructure solutions and discuss the
overall benefits of the scheme with members of the project team. The
masterplan was published online at our consultation website myearlscourt.com
to coincide with the exhibition.
A major milestone for the ECOA in the period included the publication for
consultation of the site specific planning guidance document (the
Supplementary Planning Document) by the London Borough of Hammersmith & Fulham
(LBHF), the Royal Borough of Kensington & Chelsea and the Greater London
Authority. The first stage of consultation concluded in April, coinciding with
the conclusion of the LBHF Core Strategy Examination in Public. The Mayor of
London confirmed in a press release on 3 May 2011 that the Planning
Inspectorate has reported on the draft Replacement London Plan, which includes
ECOA as an opportunity area suitable for comprehensive development, concluding
that it offers "a sound basis for planning"; the Plan will now be submitted to
the Secretary of State for approval.
Negotiations are progressing with Transport for London (TfL) in respect of the
re-gearing of Capco`s long leasehold interests at Earls Court and also with
TfL and LBHF in respect of future development rights over the ECOA. We remain
on track to submit planning applications by the end of June.
The Great Capital Partnership
The Partnership continues to benefit from its focus on London`s West End
showing modest growth in both rental and capital values. Occupancy levels have
reduced to 92.1 per cent., as at 31 March 2011, principally as a result of a
lease expiry during the quarter. The sale of 201/207 Kensington High Street,
for cash consideration of GBP12.8 million (Capco`s share GBP6.4 million) was
completed in April. Further divestments of mature non-core assets are under
consideration.
Other
The realisation of our investments in China continues with a number of
contracted sales now completed. These sales released approximately GBP5
million in the first quarter and GBP32 million in April 2011. Further sales
have been contracted and are planned to complete over the next 12 months.
Finance
As at 31 March 2011, gross debt was GBP644 million and the cash balance was
GBP158 million, resulting in net debt of GBP486 million (31 December 2010
GBP476 million). Based on 31 December 2010 property values, the 31 March 2011
pro forma debt to assets ratio was 35 per cent. (31 December 2010 35 per
cent.).
Following the 12-month extension agreed in February 2011 to the facility
secured over Earls Court & Olympia, the Group`s weighted average debt maturity
at 31 March 2011 was 3 years (31 December 2010 3 years) and the weighted
average cost of gross debt was 5.9 per cent. (31 December 2010 5.9 per cent.)
with 96 per cent. of the debt hedged into fixed interest rates.
As at 31 March 2011 Capco had capital commitments of GBP35.7 million.
Dividends
The Company has declared a final dividend of 1 pence per Ordinary Share with
respect to the year ended 31 December 2010, making a total dividend for the
full year ended 31 December 2010 of 1.5 pence per Ordinary Share. It is
currently intended that the Company will pay a dividend of 1.5 pence per
Ordinary Share for the year ending 31 December 2011.
It remains the Company`s intention to grow the dividend as the success of its
asset plans is reflected in underlying profitability, taking into account the
level of any future commitments.
Details of the Placing
Under the terms of the Placing, Capco intends to place up to 62,100,000 new
ordinary shares of 25 pence each in the capital of the Company (the "Placing
Shares"), representing approximately 9.99 per cent. of the current issued
ordinary share capital of the Company as at 04 May 2011.
Placees may participate in the Placing in Sterling or in Rand. The number of
Rand Placing Shares will represent a maximum of 30 per cent. of the total
number of Placing Shares. Investors who participate in the Placing in Rand
will be required to make bids for Placing Shares in Sterling. UBS Limited
("the Bookrunner") will confirm the final Rand/Sterling exchange rate for
determination of the final Rand Placing Price at the time that pricing and
allocations take place. Further details of the exchange rate determination can
be found in the terms and conditions contained in the Appendix to this
Announcement under the heading "Participation in, and principal terms of, the
Placing".
The Placing is being conducted, subject to the satisfaction of certain
conditions, through an accelerated bookbuild process (the "Bookbuild") to be
carried out by the Bookrunner. The book will open with immediate effect. The
Bookbuild is expected to close no later than 4.30 p.m. (London time) today but
may be closed earlier or later at the discretion of the Bookrunner. The
Bookrunner may, in agreement with the Company, accept bids that are received
after the Bookbuild has closed. The Placing Price and the number of Placing
Shares will be agreed between the Bookrunner and the Company following
completion of the Bookbuild and will then be announced on a Regulatory
Information Service (the "Pricing Announcement").
The Placing has been fully underwritten by the Bookrunner, subject to the
conditions set out in the placing agreement between the Company and the
Bookrunner. A description of the placing agreement can be found in the terms
and conditions contained in the Appendix to this announcement under the
heading "Participation in, and principal terms of, the Placing".
Application will be made for admission of the Placing Shares to the Official
List of the Financial Services Authority and to trading on the London Stock
Exchange`s main market for listed securities ("UK Admission"). The Company
will also apply to the Johannesburg Stock Exchange for the listing of the
Placing Shares on the Main Board of the Johannesburg Stock Exchange. It is
expected that the Admission and listing of the Placing Shares on the London
Stock Exchange and the Johannesburg Stock Exchange will become effective on 10
May 2011.
The Placing Shares will, when issued, be credited as fully paid and rank pari
passu with the existing ordinary shares of 25 pence each in the capital of the
Company including the right to receive all future dividends and distributions
declared, made or paid (excluding the 2010 final dividend).
The Placing is conditional upon, inter alia, UK Admission becoming effective.
The Placing is also conditional upon the placing agreement between the Company
and the Bookrunner not being terminated.
The Appendix to this Announcement (which forms part of the Announcement) sets
out the terms and conditions of the Placing.
Enquiries
Capital & Counties Properties PLC
Ian Hawksworth Chief Executive +44 (0)20 3214 9188
Soumen Das Finance Director +44 (0)20 3214 9183
Rothschild +44 (0)20 7280 5000
Alex Midgen
Duncan Wilmer
UBS Limited +44 (0)20 7567 8000
Hew Glyn Davies
Jonathan Bewes
Fergus Horrobin
Christopher Smith
UBS South Africa (Proprietary) Limited +27 11 322 7000
Martin Nel
Hudson Sandler +44 (0)20 7796 4133
Michael Sandler / Wendy Baker
College Hill +27 (0)11 447 3030
Nicholas Williams
IMPORTANT NOTICE
This announcement includes statements that are, or may be deemed to be,
"forward-looking statements", including within the meaning of Section 27A of
the Securities Act and Section 21E of the US Exchange Act of 1934. These
forward-looking statements can be identified by the use of a date in the
future or forward-looking terminology, including, but not limited to, the
terms "may", "believes", "estimates", "plans", "aims", "targets", "projects",
"anticipates", "expects", "intends", "may", "will", "could" or "should" or, in
each case, their negative or other variations or comparable terminology. These
forward-looking statements include matters that are not historical facts and
include statements regarding Capco`s intentions, beliefs or current
expectations. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances. A number
of factors could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements. Any forward-
looking statements in this announcement reflect Capco`s view with respect to
future events as at the date of this announcement and are subject to risks
relating to future events and other risks, uncertainties and assumptions
relating to Capco`s operations, results of operations, financial condition,
growth, strategy, liquidity and the industry in which Capco operates. No
assurances can be given that the forward-looking statements in this
announcement will be realised. Capco undertakes no obligation and does not
intend to revise or update any forward-looking statements in this announcement
to reflect events or circumstances after the date of this announcement.
Neither the content of the Company`s website nor any website accessible by
hyperlinks to the Company`s website is incorporated in, or forms part of, this
Announcement. This Announcement is for information purposes only and shall not
constitute an offer to buy, sell, issue, or acquire, or the solicitation of an
offer to buy, sell, issue, or acquire any securities in any jurisdiction, nor
shall there be any sale of securities in any jurisdiction, in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. In
particular, this Announcement does not constitute or form part of any offer to
issue or sell, or the solicitation of an offer to acquire, purchase or
subscribe for, any securities in the United States, Australia, Canada or
Japan.
The securities mentioned herein have not been and will not be registered under
the US Securities Act of 1933, as amended (the "US Securities Act"), or under
any securities laws of any State or other jurisdiction of the United States
and may not be offered, sold, resold, transferred or delivered, directly or
indirectly, within the United States except pursuant to an applicable
exemption from the registration requirements of the US Securities Act and in
compliance with the securities laws of any State or other jurisdiction of the
United States. There will be no public offer of the securities mentioned
herein in the United States. This Announcement may not be released, published
or distributed, directly or indirectly, in whole or in part, in or into the
United States.
This announcement has been issued by, and is the sole responsibility of, the
Company. Neither UBS Limited nor any of its affiliates, parent undertakings,
subsidiary undertakings or subsidiaries of its parent undertakings (such
entities together, "UBS") or any of its respective directors, officers,
employees or advisers or any other person accepts any responsibility
whatsoever and makes no representation or warranty, express or implied, for or
in respect of the contents of this announcement and, without prejudice to the
generality of the foregoing, no responsibility or liability is accepted by any
of them for any such information or opinions or for any errors or omissions.
UBS is acting exclusively for Capco and no one else in connection with the
Placing, UK Admission and SA Admission and will not regard any other person
(whether or not a recipient of this document) as a client in relation to the
Placing, UK Admission and SA Admission and will not be responsible to anyone
other than Capco for providing the protections afforded to its clients or for
providing advice in relation to the Placing, UK Admission, SA Admission or any
transaction, arrangement or other matter referred to in this document.
The Placing Shares will be regarded as approved inward listed instruments for
South African Exchange Control purposes. All South African corporates, trusts,
partnerships and private individuals may participate in the Placing without
restriction. However, South African resident institutional investors should be
aware that the South African Exchange Control Regulations will apply to their
participation in the Placing. Placing shares will count immediately towards
South African institutional investors` offshore allowance. South African
resident institutional investors will need to ensure that they have capacity
within their foreign investment portfolios to acquire Placing Shares.
The price of shares and the income from them may go down as well as up and
investors may not get back the full amount invested on disposal of the shares.
APPENDIX
TERMS AND CONDITIONS
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE TERMS
AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY
ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF
INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO
HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE (1)
QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 AS AMENDED ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANING
OF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS
DIRECTIVE") AND (2) IN THE UNITED KINGDOM FALL WITHIN ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d)
("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER
AND (3) HAVE BEEN INVITED TO PARTICIPATE IN THE PLACING BY THE BOOKRUNNER (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE
ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO
SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT AND THE
TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES
IN CAPCO.
THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT") OR UNDER THE LAWS
OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR DELIVERED DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT
SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN
COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON
INSIDE THE UNITED STATES IS BEING SOLICITED BY THIS ANNOUNCEMENT AND IF SENT
IN RESPONSE TO INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE
ACCEPTED. THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS ONLY
ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC
AREA ("EEA") WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE
2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC) ("QUALIFIED
INVESTORS").
By participating in the Bookbuilding Process and the Placing, Placees will be
deemed to have read and understood this Appendix and the remainder of this
Announcement in its entirety, and to be participating, making an offer and
acquiring Placing Shares on the terms and conditions contained herein and to
be providing the representations, warranties, indemnities, acknowledgements
and undertakings contained herein.
In particular each such Placee represents, warrants and acknowledges that it:
a. is a Relevant Person and undertakes that it will acquire, hold, manage or
dispose of any Placing Shares that are allocated to it for the purposes
of its business;
b. in the case of a Relevant Person in a member state of the EEA which has
implemented the Prospectus Directive (each a "Relevant Member State") who
acquires any Placing Shares pursuant to the Placing:
i. it is a Qualified Investor; and
ii. in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the Prospectus
Directive, that (a) the Placing Shares subscribed for and/or
acquired by it in the Placing have not been subscribed for and/or
acquired on behalf of, nor have they been or will be acquired with a
view to their offer or resale to, persons in any Relevant Member
State other than Qualified Investors or in circumstances in which
the prior consent of the Bookrunner has been given to the offer or
resale; or (b) where Placing Shares have been acquired by it on
behalf of persons in any member state of the EEA other than
Qualified Investors, the offer of those Placing Shares to it is not
treated under the Prospectus Directive as having been made to such
persons; and
c. is acquiring the Placing Shares for its own account or is acquiring the
Placing Shares for an account with respect to which it exercises sole
investment discretion and has the authority to make, and does make, the
acknowledgements, representations and agreements contained in this
Appendix and that it (and any such account) is outside the United States
or it is a dealer or other professional fiduciary in the United States
acting on a discretionary basis for non-US beneficial owners (other than
an estate or trust), and is acquiring the Placing Shares in an offshore
transaction in reliance upon Regulation S under the US Securities Act and
it is not purchasing the Placing Shares for the account of another person
who is resident or located in the United States unless (a) the
instruction to purchase was received from a person outside the United
States and (b) the person giving such instruction has advised that it has
the authority to give such instruction and that either it (i) has
investment discretion or authority over such account or (ii) otherwise is
purchasing the Placing Shares in an "offshore transaction" within the
meaning of Regulation S under the US Securities Act; or if it is not
outside the United States, it is a qualified institutional buyer ("QIB")
as defined in Rule 144A under the US Securities Act, or purchasing
Placing Shares on behalf of a QIB, who will sign a letter in the form
agreed between the Company and the Bookrunner ("US Investor Letter") and
understands (or, if it is acting for the account of another person, such
person has confirmed that such person understands) the resale and
transfer restrictions set out in "Representations and further terms"
contained herein.
This Announcement does not constitute or form part of an offer to sell or
issue or the solicitation of an offer to buy or subscribe for Placing Shares
in any jurisdiction including, without limitation, the United Kingdom, South
Africa, the United States or any Excluded Territory. This Announcement and the
information contained herein is not for publication or distribution, directly
or indirectly, to persons in the United States or any Excluded Territory or in
any jurisdiction in which such publication or distribution is unlawful. No
public offering of securities will be made in connection with the Placing in
the United Kingdom, South Africa, the United States or elsewhere.
The Placing Shares referred to in this Announcement have not been and will not
be registered under the US Securities Act or under the securities laws of any
State or other jurisdiction of the United States, and may not be offered or
sold directly or indirectly in or into the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and in compliance with the securities
laws of any State of the United States. Any offering to be made in the United
States will be made to a limited number of QIBs pursuant to an exemption from
registration under the US Securities Act in a transaction not involving any
public offering. The Placing Shares are being offered and sold outside the
United States in accordance with Regulation S under the US Securities Act.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any State securities commission or any other
regulatory authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Placing or the accuracy
or adequacy of this Announcement. Any representation to the contrary is a
criminal offence in the United States. Persons (including without limitation,
nominees and trustees) who have a contractual or other legal obligation to
forward a copy of this Appendix or this Announcement should seek appropriate
advice before taking any action.
The Placing Shares are regarded as approved inward listed instruments for
South African Exchange Control purposes. All South African corporates, trusts,
partnerships and private individuals may participate in the Placing without
restriction. However, South African institutional investors should be aware
that the South African Exchange Control Regulations will apply to their
participation in the Placing. Placing Shares will count immediately towards
South African institutional investors` offshore allowances. South African
resident institutional investors will need to ensure that they have capacity
within their foreign investment portfolios to acquire Placing Shares.
The distribution of this Announcement and the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action
has been taken by the Company, UBS Limited, or any of their respective
Affiliates, that would permit an offer of the Placing Shares or possession or
distribution of this Announcement or any other offering or publicity material
relating to such Placing Shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this Announcement comes are
required by the Company and UBS Limited to inform themselves about and to
observe any such restrictions.
1. Introduction
UBS Limited will today commence the Bookbuilding Process to determine demand
for participation in the Placing by Placees. This Appendix gives details of
the terms and conditions of, and the mechanics of participation in, the
Placing. No commissions will be paid to Placees or by Placees in respect of
any Placing Shares. UBS Limited and the Company shall be entitled to effect
the Placing by such alternative method to the Bookbuilding Process as they
may, in their sole discretion, determine.
The Company will apply for admission of the Placing Shares to trading on the
main market of the London Stock Exchange and to trading on the main board of
the JSE. It is expected that Placing Admission and SA Admission will take
place, and that trading in the Placing Shares will commence, on 10 May 2011.
The Placing is conditional, inter alia, upon Placing Admission becoming
effective and the Placing Agreement not being terminated. It is anticipated
that the settlement date will be 10 May 2011.
The Placing Shares will, when issued, be subject to the articles of
association of the Company and will be issued credited as fully paid and will
rank pari passu with the existing Ordinary Shares, including the right to
receive all dividends and other distributions declared in respect of such
Ordinary Shares after the date of issue of the Placing Shares (excluding the
2010 final dividend).
2. The Placing Agreement
UBS Limited has entered into the Placing Agreement with the Company under
which, subject to the conditions set out in that agreement, UBS Limited has
agreed to use reasonable endeavours to procure Placees for the Placing Shares.
In accordance with the terms of the Placing Agreement, UBS Limited has agreed
(i) to underwrite the Placing to the extent that Placees cannot be found to
participate in the Placing and (ii) to underwrite the settlement risk in the
event that any Placees who do participate fail to take up their allocation of
Placing Shares.
3. Participation in, and principal terms of, the Placing
The principal terms upon which the Placing is to be conducted are set out
below:
a. UBS Limited is acting as Bookrunner and as agent of the Company.
b. Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by the Bookrunner. UBS
Limited and its respective affiliates are each entitled to enter bids in
the Bookbuilding Process as principal.
c. The Bookbuilding Process will establish the Sterling Placing Price (in
Sterling) and the Rand Placing Price (in Rand), payable to the Bookrunner
by all Placees whose bids are successful. The Sterling Placing Price and
the Rand Placing Price will be agreed between the Bookrunner and the
Company following completion of the Bookbuilding Process. Any discount to
the market price of the ordinary shares of the Company will be determined
in accordance with the UKLA Listing Rules and, to the extent applicable,
the listing requirements of the JSE. The Placing Price and the number of
Placing Shares will be announced on a Regulatory Information Service
following the completion of the Bookbuilding Process.
d. The number of Rand Placing Shares will represent a maximum of 30 per
cent. of the total number of Placing Shares
e. To bid in the Bookbuilding Process, UK Placees should communicate their
bid by telephone to their usual sales or equity capital markets contact
at UBS Limited. Each bid should state the number of Placing Shares which
the prospective UK Placee wishes to subscribe for at the Sterling Placing
Price, which is ultimately established by the Company and the Bookrunner,
or at prices up to a price limit specified in its bid. A bid in the
Bookbuilding Process will be legally binding on the Placee by which, or
on behalf of which, it is made and will not be capable of variation or
revocation by such person after the close of the Bookbuilding Process.
Bids may be scaled down by the Bookrunner on the basis referred to in,
and subject to the limitations in, paragraph 3(l) below.
f. To bid in the Bookbuilding Process, SA Placees should communicate their
bid by telephone to their usual sales or equity capital markets contact
at UBS Limited. Each bid should state the number of Placing Shares which
the prospective SA Placee wishes to subscribe for at the Sterling Placing
Price, which is ultimately established by the Company and the Bookrunner,
or at prices up to a price limit specified in its bid. SA Placees will
receive guidance regarding the appropriate Rand/Sterling exchange rate
(the "Initial Exchange Rate Guidance") that will be used to calculate the
final Rand Placing Price. The final Rand/Sterling exchange rate will be
confirmed at the time that pricing and allocations takes place (the
"Final Exchange Rate"). SA Placees should be aware that there may be a
difference between the Initial Exchange Rate Guidance and the Final
Exchange Rate due to intraday movement in the Rand/Sterling exchange
rate.
g. The Bookbuilding Process is expected to close no later than 4.30 p.m.
(London time) on 5 May 2011 but may be closed earlier or later at the
discretion of the Bookrunner. The Bookrunner may, in agreement with the
Company, accept bids that are received after the Bookbuilding Process has
closed. The Company reserves the right to reduce or seek to increase the
amount to be raised pursuant to the Placing, in its absolute discretion.
h. Each prospective Placee`s allocation will be agreed between the
Bookrunner and the Company and will be confirmed orally by the Bookrunner
as agent of the Company following the close of the Bookbuilding Process.
That oral confirmation will constitute an irrevocable legally binding
commitment upon that person (who will at that point become a Placee) in
favour of the Company and the Bookrunner to subscribe for the number of
Placing Shares allocated to it at the Sterling Placing Price or the Rand
Placing Price, as applicable, on the terms and conditions set out in this
Appendix and in accordance with the Articles of Association.
i. Each prospective UK Placee`s allocation and commitment will be evidenced
by a contract note or electronic confirmation issued to such Placee by
the Bookrunner. Each prospective SA Placee`s allocation and commitment
will be evidenced by an electronic confirmation issued to such Placee by
the Bookrunner. The terms of this paragraph 3 will be deemed incorporated
in the contract note or electronic confirmation, as applicable.
j. Each Placee will also have an immediate, separate, irrevocable and
binding obligation, owed to the Bookrunner, to pay to the Bookrunner (or
as they may direct) in cleared funds, an amount equal to the product of
the Placing Price and the number of Placing Shares such Placee has agreed
to subscribe for and the Company has agreed to allot and issue to that
Placee. Each Placee`s obligation will be owed to the Company and to the
Bookrunner.
k. Each Placee to whom Sterling Placing Shares are allotted shall be entered
onto the UK Register and each Placee to whom Rand Placing Shares are
allotted shall be entered onto SA Register.
l. The Bookrunner may choose to accept bids, either in whole or in part, on
the basis of allocations determined in agreement with the Company and may
scale down any bids for this purpose on such basis as they may determine,
provided that the minimum acquisition cost for Placing Shares by any SA
Placee, acting as principal, shall be R1 000 000. The Bookrunner may
also, notwithstanding paragraphs 3(d), 3(e) and 3(f) above, subject to
the prior consent of the Company (i) allocate Placing Shares after the
time of any initial allocation to any person submitting a bid after that
time and (ii) allocate Placing Shares after the Bookbuilding Process has
closed to any person submitting a bid after that time.
m. A bid in the Bookbuilding Process will be made on the terms and subject
to the conditions in this Appendix and will be legally binding on the
Placee on behalf of which it is made and, except with the consent of the
Bookrunner, will not be capable of variation or revocation after the time
at which it is submitted.
n. Except as required by law or regulation, no press release or other
announcement will be made by the Bookrunner or the Company using the name
of any Placee (or its agent), in its capacity as Placee (or agent), other
than with such Placee`s prior written consent.
o. Irrespective of the time at which a Placee`s allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be subscribed
for pursuant to the Placing will be required to be made at the same time,
on the basis explained under `Registration and Settlement` in paragraph 6
below.
p. All obligations under the Bookbuilding Process and Placing will be
subject to fulfilment of the conditions referred to under `Conditions to
the Placing` in paragraph 4 below and to the Placing not being terminated
on the basis referred to below under `Termination of the Placing
Agreement` in paragraph 5 below.
q. By participating in the Bookbuilding Process, each Placee will agree that
its rights and obligations in respect of the Placing will terminate only
in the circumstances described below and will not be capable of
rescission or termination by the Placee.
r. To the fullest extent permissible by law, neither UBS Limited nor any of
its respective Affiliates shall have any liability to Placees (or to any
other person whether acting on behalf of a Placee or otherwise). In
particular, neither UBS Limited nor any of its respective Affiliates
shall have any liability (including to the fullest extent permissible by
law, any fiduciary duties) in respect of the Bookrunner` conduct of the
Bookbuilding Process or of such alternative method of effecting the
Placing as the Bookrunner and the Company may agree.
4. Conditions to the Placing
The principal conditions to the Placing are set out below:
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms in respect of the
Placing.
The obligations of the Bookrunner under the Placing Agreement are, and the
Placing is, conditional on, inter alia:
a. Placing Admission occurring by not later than 8.00 a.m. (London time) on
10 May 2011 (or such later time and/or date as the Company with the
Bookrunner may agree);
b. the warranties, representations and undertakings given by the Company in
the Placing Agreement being true and accurate and not misleading in any
respect on and as of the date of the Placing Agreement and at any time
prior to Admission; and
c. the fulfilment by the Company of its obligations under the Placing
Agreement which are required to be performed or satisfied on or prior to
Admission, save to the extent that any non-compliance is not material in
the context of the Placing,
(all such conditions included in the Placing Agreement being each a
"condition" and together the "conditions").
If any condition in the Placing Agreement is not satisfied or waived in
accordance with the Placing Agreement within the stated time periods (or such
later time and/or date as the Company may agree), or has become incapable of
being satisfied or the Placing Agreement is terminated in accordance with its
terms, the Placing will lapse and the Placee`s rights and obligations under
these terms and conditions shall cease and terminate at such time and each
Placee agrees that no claim can be made by or on behalf of the Placee (or any
person on whose behalf the Placee is acting) in respect thereof.
The Bookrunner may at its absolute discretion and upon such terms as it thinks
fit, waive compliance by the Company, or extend the time and/or date for
fulfilment by the Company, with the whole or any part of any of the Company`s
obligations in relation to the conditions in the Placing Agreement, save that
certain conditions including the condition relating to Placing Admission
referred to in paragraph 4(a) above may not be waived. Any such extension or
waiver will not affect Placees` commitments as set out in this Appendix.
Neither UBS Limited nor any of its respective Affiliates nor the Company shall
have any liability to any Placee (or to any other person whether acting on
behalf of a Placee or otherwise) in respect of any decision any of them may
make as to whether or not to waive or to extend the time and/or date for the
satisfaction of any condition to the Placing nor for any decision any of them
may make as to the satisfaction of any condition or in respect of the Placing
generally.
5. Termination of the Placing Agreement
The rights of the Bookrunner to terminate the Placing are set out below:
The Bookrunner may, at its absolute discretion, by notice in writing to the
Company, terminate the Placing Agreement at any time prior to Admission if,
inter alia:
a. any of the warranties, undertakings or covenants given by the Company in
the Placing Agreement is, or if repeated at any time up to and including
Placing Admission (by reference to the facts and circumstances then
existing) would be, untrue, inaccurate or misleading; or
b. the Bookrunner becomes aware that any statement in this Appendix is or
becomes untrue, inaccurate or misleading in any respect or any matter has
arisen, which would, if the Placing were made at that time, constitute an
omission from this Appendix (or any amendment or supplement), and which
the Bookrunner in its absolute discretion acting in good faith considers
to be material in the context of the Placing or Placing Admission; or
c. in the opinion of the Bookrunner acting in good faith there has been a
material adverse change, or any development reasonably expected to amount
to a material adverse change in, the condition (financial, operational,
legal or otherwise) or in the earnings management, business affairs,
business prospects or financial prospects of the Group, whether or not
arising in the ordinary course of business since the date of the Placing
Agreement; or
d. there has occurred any material adverse change in national or
international financial, political or economic conditions or currency
exchange rates or exchange controls that has, in the opinion of the
Bookrunner, acting in good faith, resulted in the marketing of the
Placing Shares or the enforcement of contracts for the subscription or
sale of the Placing Shares becoming impracticable or inadvisable; or
e. the application for Placing Admission is withdrawn or refused by the FSA
and/or the London Stock Exchange.
If the Placing Agreement is terminated in accordance with its terms, the
rights and obligations of each Placee in respect of the Placing as described
in this Appendix shall cease and terminate at such time and no claim can be
made by any Placee in respect thereof.
By participating in the Placing, each Placee agrees with the Company and the
Bookrunner that the exercise by the Company or the Bookrunner of any right of
termination or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of the Company or the Bookrunner (as
the case may be) and that neither the Company nor the Bookrunner need make any
reference to such Placee and that neither the Company, UBS Limited nor any of
their respective affiliates shall have any liability to such Placee (or to any
other person whether acting on behalf of a Placee or otherwise) whatsoever in
connection with any such exercise.
By participating in the Placing, each Placee agrees that its rights and
obligations terminate only in the circumstances described above and will not
be capable of rescission or termination by it after oral confirmation by the
Bookrunner following the close of the Bookbuilding Process.
6. Registration and settlement
The basis of registration and settlement in connection with the Placing are
set out below.
UK Placees
If UK Placees are allocated any Placing Shares in the Placing they will be
sent a contract note or electronic confirmation which will confirm the number
of Placing Shares allocated to them, the Sterling Placing Price and the
aggregate amount owed by them to the Bookrunner. Each UK Placee will be deemed
to agree that it will do all things necessary to ensure that delivery and
payment is completed in accordance with either the standing CREST or
certificated settlement instructions which they have in place with the
Bookrunner. Payment in full for any Placing Shares so allocated at the
Sterling Placing Price must be made by no later than midday (or such other
time as shall be notified to each UK Placee by the Bookrunner on 10 May 2011
(or such other time and/or date as the Company and the Bookrunner may agree)).
Settlement of transactions in the Placing Shares following Placing Admission
will take place within the CREST system. Settlement through CREST will be on a
T + three Business Day basis unless otherwise notified by the Bookrunner and
is expected to occur on 10 May 2011. Settlement will be on a delivery versus
payment basis. However, in the event of any difficulties or delays in the
admission of the Placing Shares to CREST or the use of CREST in relation to
the Placing, the Company and the Bookrunner may agree that the Placing Shares
should be issued in certificated form. The Bookrunner reserves the right to
require settlement for the Placing Shares, and to deliver the Placing Shares
to Placees, by such other means as they deem necessary if delivery or
settlement to UK Placees is not practicable within the CREST system or would
not be consistent with regulatory requirements in the relevant UK Placee`s
jurisdiction.
Interest is chargeable daily on payments not received on the due date in
accordance with the arrangements set out above, in respect of either CREST or
certificated deliveries, at the rate of two percentage points above prevailing
LIBOR.
If UK Placees do not comply with their obligations, the Bookrunner may sell
their Placing Shares on their behalf and retain from the proceeds, for their
own account and benefit, an amount equal to the Placing Price of each share
sold plus any interest due. UK Placees will, however, remain liable for any
shortfall below the Placing Price and for any stamp duty or stamp duty reserve
tax (together with any interest or penalties) which may arise upon the sale of
their Placing Shares on their behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, UK
Placees must ensure that, upon receipt, the conditional contract note or
electronic confirmation is copied and delivered immediately to the relevant
person within that organisation.
SA Placees
If SA Placees are allocated any Placing Shares in the Placing they will be
sent an electronic confirmation which will confirm the number of Placing
Shares allocated to them, the Rand Placing Price and the aggregate amount owed
by them to the Bookrunner. Each SA Placee will be deemed to agree that it will
do all things necessary to ensure that delivery and payment is completed in
accordance with the requirements of STRATE, including ensuring that their CSDP
accounts are credited with sufficient funds to settle the aggregate amounts
owed by them, and instructing their CSDPs to book off-market trades (on a
receipt versus payment basis) in respect of the Placing Shares allocated to
them. Payment in full for any Placing Shares so allocated at the Rand Placing
Price must be made by no later than midday (South African time) (or such other
time as shall be notified to each SA Placee by the Bookrunner on 10 May 2011
(or such other time and/or date as the Company and the Bookrunner may agree)).
Settlement of transactions in the Placing Shares will take place within the
STRATE system. Settlement through STRATE will be on a T + three Business Day
basis unless otherwise notified by the Bookrunner and is expected to occur on
10 May 2011. In the event that the company`s application to have the Placing
Shares admitted to trading on the main board of the JSE is delayed beyond 9.00
a.m. on 10 May 2011, settlement shall occur up to 3 days later, or at such
later time and/or date as the Company may agree with UBS, failing which the
Company and the Bookrunner may agree that the Rand Placing Shares shall be
issued in certificated form. Settlement will be on a delivery versus payment
basis. However, in the event of any difficulties or delays in the admission of
the Placing Shares to STRATE or the use of STRATE in relation to the Placing,
the Company and the Bookrunner may agree that the Placing Shares should be
issued in certificated form. The Bookrunner reserves the right to require
settlement for the Placing Shares, and to deliver the Placing Shares to SA
Placees, by such other means as they deem necessary if delivery or settlement
to SA Placees is not practicable within the STRATE system or would not be
consistent with regulatory requirements in a SA Placee`s jurisdiction.
Interest is chargeable daily on payments not received on the due date in
accordance with the arrangements set out above, in respect of either STRATE or
certificated deliveries, at the rate of seven per cent. per annum.
If SA Placees do not comply with their obligations, the Bookrunner may sell
their Placing Shares on their behalf and retain from the proceeds, for their
own account and benefit, an amount equal to the Placing Price of each share
sold plus any interest due. SA Placees will, however, remain liable for any
shortfall below the Placing Price plus any interest due and for any securities
transfer tax (together with any interest or penalties in respect thereof)
which may arise upon the sale of their Placing Shares on their behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, SA
Placees must ensure that, upon receipt, the electronic confirmation is copied
and delivered immediately to the relevant person within that organisation.
7. Representations and warranties
The representations and warranties given by each of the Placees in the Placing
are set out below:
By participating in the Placing each Placee (and any person acting on such
Placee`s behalf) will be deemed to have acknowledged, undertaken, represented,
warranted and agreed (as the case may be) as follows:
a. it has read the Placing Announcement and this Appendix in its entirety
and that its subscription for the Placing Shares is subject to and based
upon all the terms, conditions, warranties, acknowledgements, agreements
and undertakings and other information contained therein and herein;
b. it has not received a prospectus or other offering document in connection
with the Placing and acknowledges that no prospectus or other offering
document has been prepared in connection with the Placing;
c. if the Placing Shares were offered to it in the United States, it
represents and warrants that in making its investment decision, (i) it
has consulted its own independent advisers or otherwise has satisfied
itself concerning, without limitation, the effects of United States
federal, state and local income tax laws and foreign tax laws generally
and the US Employee Retirement Income Security Act of 1974 ("ERISA"), the
US Investment Company Act of 1940 and the US Securities Act, (ii) it has
received all information that it believes is necessary or appropriate in
order to make an investment decision in respect of the Company and the
Placing Shares and (iii) it is aware and understands that an investment
in the Placing Shares involves a considerable degree of risk and no US
federal or state or non-US agency has made any finding or determination
as to the fairness for investment or any recommendation or endorsement of
the Placing Shares;
d. (i) it has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on the information contained within the
Placing Announcement, the Placing Results Announcement, this Appendix and
any other information publicly announced to a Regulatory Information
Service by or on behalf of the Company prior to the date of this Appendix
(the "Publicly Available Information") and it has not relied, and will
not rely, on any other information, representation, warranty or statement
made at any time by any person in connection with the Placing or the
Company, (ii) neither UBS Limited nor the Company nor their respective
Affiliates nor any other person has made any representation to it,
express or implied, with respect to the Company, the Placing or the
Placing Shares or the accuracy, completeness, fairness or adequacy of the
Publicly Available Information or any other written or oral information
made available to any Placee, any person acting on such Placee`s behalf
or any of their respective advisers, and any liability is therefore
expressly disclaimed and (iii) it has made its own investigation of the
business, financial and other position of the Company and the terms of
the Placing, satisfied itself that the information is still current and
relied on that investigation for the purposes of its decision to
participate in the Placing;
e. the content the Placing Announcement and of this Appendix have been
prepared by and are exclusively the responsibility of the Company and
neither UBS Limited nor any of its Affiliates, directors, officers,
employees or any person acting on their behalf is responsible for or has
or shall have any liability for any information or representation
relating to the Company contained in this Appendix or the Publicly
Available Information nor will be liable for any Placee`s decision to
participate in the Placing based on any information, representation,
warranty or statement contained in this Appendix, the Publicly Available
Information or otherwise. Nothing in this Appendix shall exclude any
liability of any person for fraudulent misrepresentation;
f. it has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the
Placing Shares, is able to bear the economic risk of an investment in the
Placing Shares, has adequate means of providing for its current and
contingent needs, is able to sustain a complete loss of the investment in
the Placing Shares and has no need for liquidity with respect to its
investment in the Placing Shares;
g. it is not and it will not be subscribing on behalf of a resident of any
Excluded Territory at the time the Placing Shares are acquired;
h. each of it and the beneficial owner of the Placing Shares is, and at the
time the Placing Shares are acquired will be, (i) located outside the
United States and acquiring the Placing Shares in an `offshore
transaction`, as defined in, and in accordance with Rule 903 or Rule 904
of Regulation S under the US Securities Act, and is not purchasing the
Placing Shares for the account of another person who is resident or
located in the United States unless (a) the instruction to purchase was
received from a person outside the United States and (b) the person
giving such instruction has advised that it has the authority to give
such instruction and that either it (x) has investment discretion or
authority over such account or (y) otherwise is purchasing the Placing
Shares in an `offshore transaction` within the meaning of Regulation S
under the US Securities Act or (ii) a QIB;
i. if it is acquiring the Placing Shares as a fiduciary or agent for one or
more investor accounts, each such account is a QIB, it has sole
investment discretion with respect to each such account and it has full
power and authority to make the acknowledgements, representations,
warranties and agreements herein on behalf of each such account;
j. it is acquiring such Placing Shares for its own account (or the account
of a QIB as to which it has sole investment discretion) for investment
purposes and (subject to the disposition of its property being at all
times within its control) not with a view to any distribution of the
Placing Shares;
k. the Placing Shares are being offered and sold to it in accordance with
the exemption from registration under the Securities Act for transactions
by an issuer not involving a public offering of securities in the United
States and that the Placing shares have not been, and will not be,
registered under the Securities Act or with any State or other
jurisdiction of the United States;
l. it and/or each person on whose behalf it is participating:
i. is entitled to acquire Placing Shares pursuant to the Placing under
the laws of all relevant jurisdictions;
ii. has fully observed such laws;
iii. has capacity and authority and is entitled to enter into and perform
its obligations as an acquirer of Placing Shares and will honour
such obligations; and
iv. has obtained all necessary consents and authorities (including,
without limitation, in the case of a person acting on behalf of a
Placee, all necessary consents and authorities to agree to the terms
set out or referred to in this Appendix under those laws or
otherwise and complied with all necessary formalities;
m. the Placing Shares may not be reoffered, resold, pledged or otherwise
transferred by it except (a) outside the United States in an offshore
transaction pursuant to Rule 903 or Rule 904 of Regulation S under the
Securities Act (``Regulation S``) (and, if in a privately negotiated
transaction, to a person that is not an ERISA Entity, as defined below),
(b) in the United States to a person whom the seller reasonably believes
is a QIB (that is not an ERISA Entity) to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A, pursuant
to Rule 144A under the Securities Act, (c) pursuant to Rule 144 under the
Securities Act (if available), (d) to the Company, (e) pursuant to an
effective registration statement under the Securities Act, or (f)
pursuant to another available exemption, if any, from registration under
the Securities Act, in each case in compliance with all applicable laws;
n. the Placing Shares offered and sold in the United States are "restricted
securities" within the meaning of Rule 144(a)(3) under the US Securities
Act;
o. so long as the Placing Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the US Securities Act, it will segregate
such Placing Shares from any other shares in the Company that it holds
that are not restricted securities and will not deposit the Placing
Shares into any depositary receipt facility maintained by any depositary
bank in respect of the Company`s Ordinary Shares;
p. a purchase of Placing Shares by an employee benefit plan subject to ERISA
or a plan subject to Section 4975 of the US Internal Revenue Code of
1986, as amended (the "Code"), or by any entity whose assets are treated
as assets of any such plan, could result in severe penalties or other
liabilities for the Company; and it represents, warrants and agrees that
it is not (a) (i) an employee benefit plan as described in Section 3(3)
of ERISA and subject to ERISA, (ii) a plan subject to Section 4975 of the
Code, (iii) any entities whose assets are treated as assets of any such
plan by reason of such employee benefit plan`s or plan`s investment in
the entity, or (iv) a "benefit plan investor" as such term is otherwise
defined in the regulations promulgated by the US Department of Labor, and
(b) if it is a governmental plan, church or other plan which is subject
to any federal, state or local law that is substantially similar to the
provisions of Title I of ERISA or Section 4975 of the Code, its purchase,
holding or disposition of Placing Shares will not constitute or result in
a non-exempt violation under any such substantially similar law (the
entities referred to in (a)-(b), being referred to as "ERISA Entities");
q. it is not acquiring any of the Placing Shares as a result of any form of
general solicitation or general advertising (within the meaning of Rule
502(c) of Regulation D under the US Securities Act) or is located outside
the United States and it is not acquiring any of the Placing Shares as a
result of any form of directed selling efforts (as defined in Regulation
S under the US Securities Act);
r. it acknowledges that there is a significant risk that the Company is
treated as a Passive Foreign Investment Company for US federal income tax
purposes, which status will subject US holders to adverse US federal
income tax consequences;
s. it acknowledges that where it is acquiring the Placing Shares for one or
more managed accounts, it represents and warrants that it is authorised
in writing by each managed account to acquire the Placing Shares for each
managed account;
t. if it is a pension fund or investment company, its acquisition of Placing
Shares is in full compliance with applicable laws and regulations;
u. no representation has been made as to the availability of the exemption
provided by Rule 144, Rule 144A or any other exemption under the US
Securities Act for the reoffer, resale, pledge or transfer of the Placing
Shares;
v. participation in the Placing is on the basis that it is not and will not
be a client of UBS Limited and UBS Limited will have no duties or
responsibilities to a Placee for providing protections afforded to its
clients under the rules of the FSA or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement;
w. it will make payment to the Bookrunner in accordance with the terms and
conditions of this Appendix on the due times and dates set out in this
Appendix, failing which the relevant Placing Shares may be placed with
others on such terms as the Bookrunner determines;
x. the person who it specifies for registration as holder of the Placing
Shares will be (i) the Placee or (ii) a nominee of the Placee, as the
case may be. UBS Limited and the Company will not be responsible for any
liability to stamp duty or stamp duty reserve tax resulting from a
failure to observe this requirement. If it is a UK Placee, it agrees to
acquire Placing Shares pursuant to the Placing on the basis that the
Placing Shares will be allotted to a CREST stock account of UBS Limited
who will hold them as nominee on behalf of the Placee until settlement in
accordance with its standing settlement instructions with it. If it is a
SA Placee, it agrees to acquire Placing Shares pursuant to the Placing on
the basis that the Placing Shares will be held in the Company`s CSDP
account with Absa Bank Limited until settlement in accordance with this
Appendix;
y. the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not
give rise to a stamp duty or stamp duty reserve tax liability under (or
at a rate determined under) any of sections 67, 70, 93 and 96 of the
Finance Act 1986 (depository receipts and clearance services) or to any
securities transfer tax in terms of the South African Securities Transfer
Tax, 2007 and that it is not participating in the Placing as nominee or
agent for any person or persons to whom the allocation, allotment, issue
or delivery of Placing Shares would give rise to such a liability;
z. it and any person acting on its behalf falls within Article 19(5) and/or
49(2) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, and undertakes that it will acquire,
hold, manage and (if applicable) dispose of any Placing Shares that are
allocated to it for the purposes of its business only and represents and
warrants that it is entitled to subscribe for Placing Shares comprised in
its allocation under the laws of all relevant jurisdictions which apply
to it and that it has fully observed such laws and obtained all
governmental and other consents which may be required thereunder and
complied with all necessary formalities;
aa. it has not offered or sold and will not offer or sell any Placing Shares
to persons in the United Kingdom prior to Placing Admission except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their business or otherwise in circumstances which have not
resulted and which will not result in an offer to the public in the
United Kingdom within the meaning of section 85(1) of the Financial
Services and Markets Act 2000 (the "FSMA");
bb. if it is within the European Economic Area, it is a qualified investor as
defined in section 86(7) of FSMA, being a person falling within Article
2.1(e)(i), (ii) or (iii) of the Prospectus Directive (as defined below);
cc. it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of section 21 of the
FSMA) relating to Placing Shares in circumstances in which section 21(1)
of the FSMA does not require approval of the communication by an
authorised person;
dd. it has complied and it will comply with all applicable provisions of the
FSMA with respect to anything done by it or on its behalf in relation to
the Placing Shares in, from or otherwise involving the United Kingdom;
ee. if it has received any confidential price sensitive information about the
Company in advance of the Placing, it has not (i) dealt in the securities
of the Company; (ii) encouraged or required another person to deal in the
securities of the Company; or (iii) disclosed such information to any
person, prior to the information being made generally available;
ff. it has not offered or sold and will not offer or sell any Placing Shares
to persons in the European Economic Area prior to Placing Admission
except to persons whose ordinary activities involve them acquiring,
holding, managing or disposing of investments (as principal or agent) for
the purpose of their business or otherwise in circumstances which have
not resulted and which will not result in an offer to the public in any
member state of the European Economic Area within the meaning of the
Prospectus Directive (which means Directive 2003/71/EC and includes any
relevant implementing measure in any member state);
gg. it has complied with its obligations in connection with money laundering
and terrorist financing under the Proceeds of Crime Act 2002, the
Terrorism Act 2000, and the Money Laundering Regulations (2003) (the
"Regulations") and, if making payment on behalf of a third party, that
satisfactory evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations;
hh. if it is a SA Placee, or the Placing Shares were offered to it in, or it
bid for Placing Shares from, South Africa, it is acting as a principal in
respect of the Placing for a minimum acquisition cost of R1 000 000;
ii. if it is a SA Placee, or is a South African resident for purposes of the
South African Exchange Control Regulations,, it has obtained the
necessary approvals from the South African Reserve Bank in order to
participate in the Placing or is entitled to make use of an exemption to
the South African Exchange Control Regulations and accordingly is
permitted to participate in the Placing;
kk. the Company, UBS Limited and others will rely upon the truth and accuracy
of the foregoing representations, warranties, acknowledgements and
agreements;
ll. their acceptance of any of the Placing Shares is not by way of acceptance
of a public offer to be made in the Prospectus but is by way of a
collateral contract and as such section 87Q of the FSMA does not entitle
Placees to withdraw in the event that the Company publishes a
supplementary prospectus in connection with the Placing and Admission;
mm. the Placing Shares will be issued subject to the terms and conditions of
this Appendix;
nn. this Appendix will be governed by and construed in accordance with
English law. All agreements to acquire shares pursuant to the
Bookbuilding Process and/or the Placing will be governed by English law
and the English courts shall have exclusive jurisdiction in relation
thereto except that proceedings may be taken by the Company, UBS Limited
in any jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange; and
it (and any person acting on its behalf) agrees to indemnify and hold the
Company, UBS Limited and their respective Affiliates, directors, officers and
employees harmless from any and all costs, claims, liabilities and expenses
(including legal fees and expenses) (i) arising out of or in connection with
any breach of the representations, warranties, acknowledgements, agreements
and undertakings in this Appendix; or (ii) incurred by UBS Limited, the
Company and/or any of their respective Affiliates, directors, officers and
employees arising from the performance of the Placee`s obligations or any
breach of the representations, warranties, acknowledgements, agreements and
undertakings, in each case as set out in this Appendix, and further agrees
that the provisions of this Appendix shall survive after completion of the
Placing.
In addition, Placees should note that they will be liable for any capital
duty, stamp duty and all other stamp, issue, securities transfer,
registration, documentary or other duties or taxes (including any interest,
fines or penalties relating thereto) payable outside the United Kingdom by
them or any other person on the acquisition by them of any Placing Shares or
the agreement by them to subscribe for any Placing Shares.
The representations, warranties, acknowledgements and undertakings contained
in this Appendix are given to UBS Limited for itself and on behalf of the
Company and are irrevocable.
UBS Limited are acting exclusively for the Company and no one else in
connection with the Bookbuilding Process and the Placing and UBS Limited will
not be responsible to anyone (including Placees) other than the Company for
providing the protections afforded to their respective clients or for
providing advice in relation to the Bookbuilding Process or the Placing or any
other matters referred to in this Appendix.
Each Placee and any person acting on behalf of the Placee acknowledges that
UBS Limited does not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings or indemnities in the
Placing Agreement or otherwise.
Each Placee and any person acting on behalf of each Placee acknowledges and
agrees that UBS Limited or any of its affiliates may, at their absolute
discretion, agree to become a Placee in respect of some or all of the Placing
Shares.
When a Placee or person acting on behalf of the Placee is dealing with UBS
Limited, any money held in an account with UBS Limited on behalf of the Placee
and/or any person acting on behalf of the Placee will not be treated as client
money within the meaning of the rules and regulations of the FSA made under
FSMA. The Placee acknowledges that the money will not be subject to the
protections conferred by the client money rules; as a consequence, this money
will not be segregated from UBS Limited`s money in accordance with the client
money rules and will be used by UBS Limited in the course of its own business;
and the Placee will rank only as a general creditor of UBS Limited.
All times and dates in this Appendix may be subject to amendment. UBS Limited
shall notify the Placees and any person acting on behalf of the Placees of any
changes.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser.
8. Passive Foreign Investment Company
There is a significant risk that the Company may be considered to be a Passive
Foreign Investment Company for US federal income tax purposes. US shareholders
should consult their tax advisers regarding the potential application of the
PFIC regime.
In this Appendix the following expressions have the following meaning unless
the context otherwise requires:
Admission Placing Admission and/or SA
Admission, as the context requires.
Affiliate any holding company, subsidiary,
branch or associated undertaking
(including, without limitation,
joint venture partners) from time
to time or any subsidiary, branch
or associated undertaking
(including, without limitation,
joint venture partners) of any such
holding company from time to time.
Articles of Association the articles of association of the
Company from time to time in force.
Bookbuilding Process the bookbuilding process carried
out by UBS Limited to establish
demand at different prices from
potential placees for the Placing
Shares.
Bookrunner UBS Limited.
Business Day a day (excluding Saturdays and
Sundays) on which banks are
generally open for normal banking
business in the City of London and
South Africa.
Company or Capco Capital & Counties Properties PLC,
a company incorporated under the
laws of England and Wales
(registered under no. 07145051),
with its registered office at 15
Grosvenor Street, London W1K 4QZ
and registered as an external
company in South Africa (registered
under no. 2010/003387/10), with its
registered external office at
Liberty Life Centre, 1 Ameshoff
Street, Johannesburg, 2001.
CREST the relevant system (as defined in
the CREST Regulations) in respect
of which Euroclear is the Operator
(as defined in the CREST
Regulations).
CSDP a Central Securities Depositary
Participant accepted as such in
terms of the Securities Services
Act.
European Economic Area the European Union, Iceland, Norway
or EEA and Liechtenstein.
Excluded Territories Australia, Canada or Japan.
Financial Services and the United Kingdom Financial
Markets Act 2000 or Services and Markets Act 2000, as
FSMA amended.
FSA the UK Financial Services Authority
acting in its capacity as competent
authority for the purposes of Part
VI of FSMA and in the exercise of
its functions in respect of the
admission to the premium listing
segment of the Official List of the
Financial Services Authority
otherwise than in accordance with
Part VI of FSMA, including, where
the context so permits, any
committee, employee, officer or
servant to whom any function of the
Financial Services Authority may
for the time being be delegated.
Group the Company and its subsidiary
undertakings, affiliates and
associates from time to time.
JSE JSE Limited, a public company
incorporated and registered in
South Africa (Registration number
2005/022939/06), licensed as a
securities exchange in terms of the
Securities Service Act, No 36 of
2004, as amended.
JSE List the list of securities admitted to
listing maintained by the JSE.
LIBOR London Interbank Offer Rate.
Listing Rules the listing rules produced by the
FSA under Part VI of FSMA and
forming part of the FSA`s Handbook
of rules and guidance as from time
to time amended.
London Stock Exchange London Stock Exchange plc.
or LSE
Official List the list maintained by the FSA in
accordance with section 74(1) of
FSMA for purposes of Part VI of
FSMA.
Ordinary Shares or the ordinary shares of 25 pence
Shares each in the capital of the Company.
Passive Foreign a passive foreign investment
Investment Company or company within the meaning of
PFIC Section 1297 of the United States
Internal Revenue Code of 1986.
Placees the SA Placees and/or the UK
Placees, as the context requires.
Placing the placing of Placing Shares by
UBS Limited on behalf of the
Company pursuant to the provisions
of the Placing Agreement and as
described in this Appendix.
Placing Admission admission to listing on the premium
listing segment of the Official
List and admission to trading on
the London Stock Exchange of the
Placing Shares becoming effective
by the decision of the UK Listing
Authority to admit such shares to
listing being announced in
accordance with the Listing Rules
and by the decision of the London
Stock Exchange`s Main Market for
Listed Securities to admit such
shares to trading being announced
in accordance with the Admission
and Disclosure Standards.
Placing Agreement the placing agreement entered into
between the Company and UBS Limited
on 4 May 2011.
Placing Press the press announcement containing
Announcement these terms and conditions of the
Placing.
Placing Price the Rand Placing Price and/or the
Sterling Placing Price, as the
context requires.
Placing Shares the Sterling Placing Shares and/or
the Rand Placing Shares, as the
context requires.
Pounds sterling, the lawful currency of the UK.
Sterling or GBP
Placing Results the announcement relating to the
Announcement Placing Price in the form to be
agreed.
Pricing Supplement the pricing supplement to the
Placing Agreement.
QIB qualified institutional buyer,
within the meaning of Rule 144A
under the US Securities Act.
Rand or R the lawful currency of South
Africa.
Rand Placing Price the price per Rand Placing Share to
be set out in the Pricing
Supplement.
Rand Placing Shares up to 18,630,000 new ordinary
shares of 25 pence each in the
capital of the Company to be issued
to Shareholders in South Africa at
the Rand Placing Price
Regulatory Information in respect of the UK Placees, any
Service of the services set out in Appendix
3 to the Listing Rules.
SA Admission admission of the Placing Shares to
the JSE List and to the JSE`s Main
Board for Listed Securities
becoming effective in accordance
with the JSE Listings Requirements.
SA Placees those persons whose Placing Shares
will be recorded on the SA
Register.
SA Register the branch register of the members
of the Company in South Africa.
Securities Services Act the South African Securities
Services Act, No 36 of 2004, as
amended.
Shareholders holders of Ordinary Shares.
South Africa the Republic of South Africa.
South African Exchange the restrictions applicable to
Control residents and non-residents as to
the remittance of funds from South
Africa to a foreign country.
South African Exchange the Exchange Control Regulations of
Control Regulations South Africa issued under the
Currency and Exchanges Act, No 9 of
1933.
Sterling Placing Price the price per Sterling Placing
Share to be set out in the Pricing
Supplement.
Sterling Placing Shares up to 62,100,000 new ordinary
shares of 25 pence each in the
capital of the Company to be issued
to Shareholders outside South
Africa at the Sterling Placing
Price.
STRATE STRATE Limited, registration number
1998/022242/06, a public company
incorporated with limited liability
under the laws of South Africa,
which is licensed as a central
securities depositary under the
Securities Services Act.
UBS Limited UBS Limited, a company registered
in England and Wales with number
02035362 whose registered office is
at 1 Finsbury Avenue, London EC2M
2PP.
UK the United Kingdom of Great Britain
and Northern Ireland.
UK Listing Authority or the FSA in its capacity as the
UKLA competent authority for the
purposes of Part VI of FSMA.
UK Placees those persons whose Placing Shares
will be recorded on the UK
Register.
UK Register the register of members of the
Company in the UK, excluding, for
the avoidance of doubt, the SA
Register.
US or United States the United States of America, its
territories and possessions, any
State of the United States and the
District of Columbia.
US Holder is a beneficial owner of Ordinary
Shares that is (i) a citizen or
resident of the United States for
US federal income tax purposes;
(ii) a corporation, or other entity
treated as a corporation, created
or organised under the laws of the
United States or any state thereof;
(iii) an estate the income of which
is subject to US federal income tax
without regard to its source; or
(iv) a trust if a court within the
United States is able to exercise
primary supervision over the
administration of the trust and one
or more US persons have the
authority to control all
substantial decisions of the trust.
US Securities Act or the US Securities Act of 1933, as
Securities Act amended.
US Securities and the US government agency having
Exchange Commission primary responsibility for
enforcing the federal securities
laws and regulating the securities
industry/stock market.
Sponsor: UBS South Africa (Pty) Ltd
Date: 05/05/2011 08:01:07 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
