| Tue 10 May 2011, 11:31 | | RIN - Redefine Properties International Limited - Acquisition of The Crowne |
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RIN
RIN
RIN - Redefine Properties International Limited - Acquisition of The Crowne
Plaza Hotel
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")
ACQUISITION OF THE CROWNE PLAZA HOTEL
INTRODUCTION
Linked unitholders are advised that the company`s subsidiary Redefine Hotels
Reading Limited ("RHR" or "the purchaser") concluded an agreement ("the sale
and purchase agreement") with Pedersen (UK) Limited ("the seller") in terms
of which RHR has agreed to acquire, inter alia, the Caversham Hotel Thames
Side Promenade Reading ("the hotel") and the leasehold on which the hotel is
situated for a purchase price of GBP12.75 million ("the transaction").
RATIONALE FOR THE TRANSACTION
The hotel is well located close to the town centre of Reading on the banks of
the River Thames in the UK. It was originally opened in 1979 and was
extensively refurbished in 2005 when it was branded a four star Crowne Plaza
hotel under a franchise agreement ("the franchise agreement") with Six
Continents Hotels Inc. The franchise agreement expires in June 2025. RHR will
enter into a new franchise agreement with Six Continents Hotels Inc on
similar terms to the existing agreement.
The hotel has conferencing and banqueting facilities as well as a Health,
Fitness and Beauty Centre including an indoor pool. There is also a 200 space
car park within the property.
The hotel forms part of a portfolio of 4 hotels that was placed into
administration in 2010 and that have now been brought to the market
individually by the administrators.
The transaction is in line with RIN`s objective of increasing its presence in
the UK hotel market and is expected to be earnings enhancing for linked unit
holders in the medium to long term.
The acquisition will complement the company`s existing hotel portfolio of 5
high quality hotels.
SALIENT TERMS OF THE TRANSACTION
The effective date of the transaction will be the later of 1 June 2011 or two
business days after the date on which the condition as set out below has been
satisfied or waived ("effective date").
The transaction is subject to the seller receiving the written consent of the
landlord to the transfer of the leasehold rights to the purchaser.
The balance of the purchase price (less the deposit of GBP637 500 which was
paid on signature of the sale and purchase agreement) is payable in cash on
the effective date.
It is intended that the purchase price of GBP12.75 million (inclusive of the
deposit) plus transaction costs of GBP0.8 million, will be funded as follows:
- Debt of GBP7.65 million has been secured on favourable terms from Aareal
Bank AG.
- Bashir Hakanmali Nathoo, Enderle International Limited and Corovest
Mezzanine Capital Limited will subscribe for in aggregate approximately
GBP5.7 million (collectively, "the subscriptions"), in Redefine Hotel
Holdings Limited ("RHH"), reducing RI plc`s 77.82% shareholding in RHH
to approximately 71.04%.
- The balance of approximately GBP0.2 million will be funded using
internal cash resources of RI plc.
The sale and purchase agreement contains limited warranties typical for
acquisitions of this nature.
After implementation of the transaction, RHR has agreed, at its sole cost and
expense, to enter into a new franchise agreement with Six Continents Hotels
Inc. to operate the hotel as a Crowne Plaza Hotel in place of the seller.
The acquisition of the hotel is expected to be implemented on or around 1
June 2011.
THE HOTEL
Details of the hotel including the valuation, effective as at 28 February
2011 attributed to the hotel by the company, are as follows:
Property Region Sector Weighted Rentable Purchase Valuation
description average area price
rental
per m2
(GBP) (sq (GBP` (GBP`
metres) million) million)
Caversham Reading, Hotel 320.53 3,163 12.75 12.75
Hotel Thames Berkshire
Side United
Promenade Kingdom
Reading
FINANCIAL EFFECTS
The unaudited pro forma financial effects of the transaction on the
distribution, earnings, headline earnings, net asset value and net tangible
asset value per linked unit, based on RIN `s unaudited condensed consolidated
interim results for the six months ended 28 February 2011, are not material
and have not been disclosed.
CATEGORISATION OF THE TRANSACTION AND THE SUBSCRIPTIONS
The transaction is a category 2 transaction in terms of section 9.5(a) of the
Listings Requirements of the JSE Limited.
The subscriptions are neither category 1 transactions nor category 2
transactions in terms of the Listings Requirements of the JSE Limited and
accordingly, no further details have been provided in this announcement.
10 May 2011
Sponsor to Redefine Properties International Limited
Java Capital
Date: 10/05/2011 11:31:01 Produced by the JSE SENS Department.
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