| Thu 28 Jul 2011, 8:21 | | DIA/DIB - Dipula Income Fund Limited - Abridged Prospectus - listing of Dipula |
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JSE
DPL
DIA/DIB - Dipula Income Fund Limited - Abridged Prospectus - listing of Dipula
on the JSE limited
DIPULA INCOME FUND LIMITED
(formerly Dipula Property Fund (Proprietary) Limited)
(Incorporated in the Republic of South Africa on 10 May 2005)
(Registration number 2005/013963/06)
JSE code for A-linked units: DIA ISIN for A-linked units: ZAE000158317
JSE code for B-linked units: DIB ISIN for B-linked units: ZAE000158325
("Dipula" or "the company" and together with its subsidiaries, "the group")
ABRIDGED PROSPECTUS - LISTING OF DIPULA ON THE JSE LIMITED
Abridged prospectus relating to:
- A private placement of linked units ("the private placement") in the
company by way of:
* an offer to subscribe for 77 082 837 A-linked units at an offer
price of R8.58 per A-linked unit, which offer will raise up to R661
370 741;
* an offer to subscribe for 77 082 837 B-linked units at an offer
price of R5.53 per B-linked unit, which offer will raise up to R426
268 089;
* an offer to acquire from the sellers (comprising Dijalo Property
Services (Proprietary) Limited and Mergence Africa Properties
(Proprietary) Limited), 21 260 910 A-linked units at an offer price
of R8.58 per A-linked unit, which offer will realise up to R182 418
608;
* an offer to acquire from the sellers 21 260 910 B-linked units at
an offer price of R5.53 per B-linked unit, which offer will realise
up to R117 572 832; and
* the subsequent listing ("the listing") of the linked units of the
company on the "Real Estate - Real Estate Holdings and Development"
sector of the JSE lists.
This abridged prospectus is not an invitation to the public to subscribe for
and/or purchase linked units in the company, but is issued in compliance with
the JSE Listings Requirements and the Companies Act, 2008 (Act 71 of 2008),
for the purposes of giving information to the public in relation to Dipula and
to invited investors in relation to the private placement.
This announcement contains the salient information in respect of Dipula, which
is more fully described in the prospectus which was released to invited
investors today ("the prospectus"). For a full appreciation of Dipula, the
private placement and the listing, the prospectus should be read in its
entirety.
INTRODUCTION
The company has adopted a dual-unit structure consisting of A-linked units and
B-linked units (collectively, "linked units"), the salient features of which
are outlined in the prospects section below.
Subject to Dipula meeting the requirements of the JSE in respect of the
requisite spread of linked unitholders, the JSE has granted Dipula a listing
in respect of up to 105 532 393 A-linked units and up to 105 532 393 B-linked
units in the "Real Estate - Real Estate Holdings and Development" sector of
the JSE lists, in terms of the FTSE classification, under the abbreviated
names "Dipula A" and "Dipula B", JSE Codes "DIA" for A-linked units and "DIB"
for B-linked units and ISIN Codes "ZAE000158317" for A-linked units and
"ZAE00158325" for B-linked units with effect from the commencement of business
on Wednesday, 17 August 2011.
Dipula was incorporated as a private company on 10 May 2005 and, as confirmed
by the Companies and Intellectual Property Commission, converted to a public
company on 23 June 2011.
The financial year end of the group is 31 August.
BACKGROUND TO DIPULA
Dipula was established in 2006 with the aim of investing in commercial real
estate. The company acquired an initial portfolio of R300 million in the same
year. Since formation Dipula has been prudently growing its property
portfolio. Prior to the listing Dipula merged with Mergence and in the process
grew the value of its asset base to R1.4 billion. The acquisition of a
portfolio of properties from Redefine Properties Limited ("the Redefine
portfolio) and the acquisition of Asakhe Realty Fund (Proprietary) Limited
("Asakhe") which will be implemented immediately prior to the listing will
increase the value of the group`s property portfolio to approximately R2.1
billion. The company holds a diversified portfolio of properties throughout
South Africa
The property management and asset management functions are performed
externally by highly competent teams, further details of which will be
provided in the prospectus.
PROSPECTS
Dipula is a well diversified property fund with a retail bias. It aims to
achieve dependable, sustainable growth through a focus on quality of income
and tight cost management.
Rental escalations in the existing portfolio, at approximately 8.4%, are in
excess of current inflation. Average rentals are low with scope for positive
reversions on renewal. The group is exposed to the high growth segments of
the economy. This is particularly so in Dipula`s retail portfolio where the
group enjoys significant exposure to the lower income households that are
expected to be the primary driver behind the anticipated growth in consumer
spending over the next few years. The industrial portfolio is well located in
established industrial areas with good access to highways and power supply.
Offices are well located, principally in Johannesburg`s Northern suburbs.
Prospects for acquisitive growth are considered good. The rapid growth of
most existing listed property funds coupled with consolidation in the listed
property sector in the past few years has led to existing listed property
funds disposing of smaller assets. Dipula is well positioned to prudently
exploit these opportunities as well as to exploit opportunities to acquire
property currently in private hands. Dipula will leverage off its status as a
black managed fund to acquire government and parastatal tenanted properties
where opportunities arise. Acquisitions will only be considered if they are
yield enhancing and the group will not embark on any speculative development
activity.
The A and B-linked unit structure provides different risk and reward profiles
for different investors. The A-debenture is `bond-like` in nature, with
distributions increasing at 5% per annum until 31 August 2017 and then at the
lower of 5% per annum or in line with the prevailing CPI rate. The
distributions on the A-debentures rank ahead of the distributions on the B-
debentures and the group`s distributable income would need to fall by
approximately 40% from current levels for the distribution payments on the A-
debenture to be at risk.
The holders of the B-debentures receive the residual distributable income
after the payment of the distributions on the A-debentures. As a result the B-
debentures offer greater scope for growth in income distributions. By way of
example, if the distributable income of the group was to grow by 8% from the
forecast distributable earnings on the B-linked units would grow by almost
11%.
PROPERTY INFORMATION
The group`s property portfolio valued in aggregate at R2.1 billion at 28
February 2011, by Broll Valuation Services (Proprietary) Limited and
Alternative Real Estate Capital Management (Proprietary) Limited, who are
independent external property valuers, will consist of 175 properties with an
effective GLA of 436 629 m2. Full details of the property portfolio of the
group will be provided in the prospectus.
SUMMARISED FORECAST INFORMATION
The table below sets out a summary of the forecast for the Dipula group, as
enlarged by the Redefine portfolio and Asakhe, for the year ending 31 August
2012
Forecast for the
year ending 31
August 2012
Distributable earnings R146 378 881
Actual number of A-linked units in issue 105 532 393
Actual number of B-linked units in issue 105 532 393
Distribution per A-linked unit (cents) 79.37
Distribution per B-linked unit (cents) 59.34
138.71
Earnings/Headline earnings per A-linked unit 79.37
(cents)
Earnings/Headline earnings per B-linked unit 59.34
(cents)
Forward yield based on an issue price of 9.25%
R8.58 per A-linked unit
Forward yield based on an issue price of 10.73%
R5.53 per B-linked unit
The figures set out above are extracted from detailed forecast for the year
ending 31 August 2012 that has been reported on by the independent reporting
accountants, PKF(Jhb) Inc. The detailed forecast, the independent reporting
accountants` report on the detailed forecast and the assumptions on which they
have been based are set out in the prospectus.
MAIN PURPOSES FOR THE PRIVATE PLACEMENT AND THE LISTING
The main purposes of the private placement and the listing are to:
- provide South African investors, both institutional and private, the
opportunity to participate in the income streams and future capital
growth through an investment in Dipula;
- provide an additional source of capital to fund the growth aspirations of
the group;
- fund the Asakhe transaction, the Redefine transaction and the Mergence
transaction;
- repay a portion of loans which are currently outstanding; and
- defray the preliminary expenses.
SALIENT DATES AND TIMES
2011
Abridged prospectus published on SENS on Thursday, 28 July
Opening date of the private placement Thursday, 28 July
(09:00)
Abridged prospectus published in the press Friday, 29 July
on
Closing date of the private placement Thursday, 11 August
(12:00)(2)
Results of the private placement released Friday,12 August
on SENS on
Results of the private placement released Monday, 15 August
in the press on
Notification of allotments Monday, 15 August
Listing of the linked units on the JSE Wednesday, 17 August
(09:00)
Accounts at CSDP or broker updated and Wednesday, 17 August
debited in respect of dematerialised linked
unitholders(3)
Notes:
These dates and times are South African dates and times and are subject to
amendment. Any such amendment will be released on SENS and published in the
press.
Invited investors may only receive linked units in dematerialised form and
must advise their CSDP or broker of their acceptance of the private placement
in the manner and cut-off time stipulated by their CSDP or broker.
CSDP`s effect payment on a delivery-vs-payment basis.
PARTICULARS OF THE PRIVATE PLACEMENT
The private placement comprises of:
- an offer to subscribe for 77 082 837 A-linked units at a offer price of
R8.58 per A-linked unit, which offer will raise up to R661 370 741;
- an offer to subscribe for 77 082 837 B-linked units at a offer price of
R5.53 per B-linked unit, which offer will raise up to R426 268 089;
- an offer to acquire from the sellers 21 260 910 A-linked units at a offer
price of R8.58 per A-linked unit, which offer will realise up to R182 418
608; and
- an offer to acquire from the sellers 21 260 910 B-linked units at a offer
price of R5.53 per B-linked unit, which offer will realise up to R117 572
832, raising in aggregate up to R1 387 630 270.
The private placement is being partially underwritten by Redefine Properties
Limited for an amount up to R860 million.
The directors have made due and careful enquiry to confirm that the
underwriter can meet its commitments in terms of the private placement.
The directors will not increase the number of linked units offered in terms of
the private placement.
CONDITIONS TO WHICH THE PRIVATE PLACEMENT AND THE LISTING ARE SUBJECT
The listing of the linked units is subject to the following:
- the achievement of a public spread of linked unitholders acceptable to
the JSE, being a minimum of 300 public A-linked unitholders and a minimum
of 300 public B-linked unitholders holding not less than 20% of the A-
linked unit issued capital and not less than 20% of the B-linked unit
capital of the company, respectively; and
- a minimum amount being the R1 387 630 270 being raised pursuant to the
private placement however since Redefine Properties Limited has
underwritten the private placement in an amount up to R860 000 000, the
minimum amount which is required to be raised is R527 630 270 (the
difference between the minimum amount required and the underwritten
amount).
DIRECTORS
The full names, ages, nationalities, business addresses, qualifications and
functions of the directors of Dipula are set out below.
Names and age Zanele Joyce Matlala (48)
Business address Sandton Place, 68 Wierda Road East, First Floor Block
B, Wierda Valley, 2196
Qualification CA(SA)
Function Independent Non-Executive Chairperson
Names and age Izak Smolly Petersen (38)
Business address Office Suite 300. Killarney Mall Office Towers.
Killarney 2093
Qualification B.Com., PGDA, CA(SA)
Function Chief Executive Officer
Names and age Brigitte de Bruyn (37)
Business address Office Suite 300. Killarney Mall Office Towers.
Killarney 2093
Qualification B.Com., BAcc, CA(SA)
Function Financial Director
Names and age Nyangeni Saul Gumede (55)
Business address 6th Floor, Block D, Sunnyside Office Park, 2 Carse
O`Gowrie Road, Parktown, 2193
Qualification B.Com., CPMRegistered
Function Executive Director
Names and age Brian Hilton Azizollahoff (50)
Business address 54 Melrose Boulevard, 4th Floor, Melrose Arch 2076
Qualification BA (NY), MBA (Wits)
Function Independent Non-Executive Director
Names and age Elias (Eltie) Links (65)
Business address Carl Cronje Drive, Tygervalley, Bellville, 7535
Qualification B.Com., M.Com. (Economics), M.A. (Economics), PhD
(Economics)
Function Independent Non-Executive Director
Names and age Younaid Waja (59)
Business address 48 Helium Avenue, Extension 5, Lenasia, 1827
Qualification B.Com., Hons B.Compt, CA(SA), HDip Tax Law
Function Independent Non-Executive Director
All directors are South African nationals.
PROSPECTUS
The prospectus, which is available only in English, will be issued on
Thursday, 28 July 2011. Copies may be obtained during normal business hours
between 08h30 and 17h00 from Thursday, 28 July 2011 to Thursday, 11 August
2011 from:
- the registered offices of Dipula at 2 Arnold Road, Rosebank, 2196;
- Java Capital (Proprietary) Limited at 2 Arnold Road, Rosebank,
Johannesburg, 2196, South Africa;
- Link Market Services South Africa (Proprietary) Limited, 13th Floor,
Rennie House, 19 Ameshoff Street, Braamfontein, Johannesburg, 2001.
The document is also available on the following website: www.Dipula.co.za
Thursday, 28 July 2011
Corporate advisor, legal advisor, sponsor and bookrunner
Java Capital
Independent transaction sponsor
Deloitte & Touche Sponsor Services (Proprietary) Limited
Independent reporting accountants and auditors
PKF(Jhb) Inc.
Attorneys to the prospectus
Ledwaba Mazwai Attorneys
Date: 28/07/2011 08:21:37 Produced by the JSE SENS Department.
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