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FFA FFB
FORT
FFA/FFB - Fortress Income Fund Limited - Acquisition of linked units in Vukile
Property Fund Limited ("Vukile")
FORTRESS INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
Registration number 2009/016487/06
Share codes: FFA ISIN: ZAE000141313
FFB ISIN: ZAE000141321
("Fortress")
ACQUISITION OF LINKED UNITS IN VUKILE PROPERTY FUND LIMITED ("VUKILE")
Unitholders are advised that Fortress has entered into an agreement with Lazarus
Capital (Proprietary) Limited ("the seller") in terms of which it will acquire
from the seller 25 500 000 linked units in Vukile for a cash consideration of
R13,10 per linked unit, amounting to an aggregate consideration of R334 050
000("the transaction").
The acquisition was effective on Tuesday, 26 July 2011 and payment of the cash
consideration will be made against delivery of the Vukile linked units. The
acquisition is not subject to any outstanding conditions precedent.
The acquisition of these listed property securities is consistent with Fortress`
strategy to be a hybrid fund with direct and indirect holdings in property
assets and allows Fortress to increase its gearing appropriately.
The pro forma financial effects set out in the table below are the
responsibility of the Fortress directors and have been prepared for illustrative
purposes only, to show how the transaction may have affected Fortress` published
unaudited consolidated interim financial results for the six months ended 31
December 2010.
Due to their nature, the pro forma financial effects may not fairly present
Fortress` financial position, changes in equity, results of operations or cash
flows following the transaction.
Before the Pro forma Change
transaction after the
transaction
Earnings per A and B linked unit 5.36 12.81 139.0%
(cents)
Headline earnings per A linked unit 55.62 63.07 13.4%
(cents)
Headline earnings per B linked unit 10.86 19.20 76.8%
(cents)
Distribution per B linked unit (cents) 6.04 6.93 14.7%
Weighted average A linked units in 220 750 000 220 750 000
issue
Weighted average B linked units in 220 750 000 220 750 000
issue
Notes:
1. The amounts set out in the "Before the transaction" column have been
extracted from the unaudited consolidated interim financial results of
Fortress for the six months ended 31 December 2010.
2. The effect on NAV and NTAV per A and B linked unit is not material and has
not been disclosed.
3. The effect on distribution per A linked unit remains unchanged and has not
been disclosed. Distribution per B linked unit as set out in the "Pro forma
after the transaction" column reflects what the distribution per B linked
unit would have been had the effective date of the transaction been 1 July
2010.
4. Headline earnings per A and B linked unit as set out in the "Pro forma
after the transaction" column reflect what the headline earnings per A and
B linked unit would have been had the effective date of the transaction
been 1 July 2010.
5. A total of 25 500 000 Vukile linked units were acquired at a price of
R13.10 per linked unit.
6. It has been assumed that Fortress earned distributable income from the
Vukile linked units based on Vukile`s historical distribution of 67.10
cents per linked unit in respect of the six months ended 31 March 2011.
7. The total purchase consideration of approximately R334 million is assumed
to be funded using interest-bearing borrowings.
8. Interest on the interest-bearing borrowings is assumed to be incurred at 9%
per annum.
9. A fair value gain on investments has been recognised using Vukile`s bid
linked unit price at 31 December 2010 of R14.60.
28 July 2011
Sponsor to Fortress
Java Capital
Date: 28/07/2011 17:17:44 Produced by the JSE SENS Department.
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