| Tue 30 Aug 2011, 9:05 | | RES - Resilient Property Income Fund Limited - Acquisition of Boardwalk |
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RES
RES
RES - Resilient Property Income Fund Limited - Acquisition of Boardwalk
Shopping Centre from Capital Property Fund
Resilient Property Income Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/016851/06
Share code: RES ISIN: ZAE000043642
("Resilient")
ACQUISITION OF BOARDWALK SHOPPING CENTRE FROM CAPITAL PROPERTY FUND
INTRODUCTION
Linked unitholders are advised that Resilient has concluded an agreement
with Capital Property Fund ("Capital") for the acquisition of Boardwalk
Shopping Centre, situated in Krugerrand Road, Richards Bay (the "property")
from Capital (the "transaction").
RATIONALE FOR THE TRANSACTION
The acquisition of the property is in line with Resilient`s strategy of
investing in dominant retail centres with strong anchor tenants and a high
percentage of national retailers.
TERMS OF THE TRANSACTION AND CONDITIONS PRECEDENT
The effective date of the transaction is 1 December 2011 and the
consideration of R1.028 billion payable by Resilient to Capital in respect
of the property will be settled on the date of registration of transfer of
ownership of the property by the issue of 16 211 238 Resilient linked units
and the payment of R514 million in cash.
The transaction is subject to:
- approval by Capital`s unitholders; and
- approval by the Competition authorities.
THE PROPERTY
Based on a valuation attributed to the property as at 1 December 2011 by
Quadrant Properties (Proprietary) Limited, an independent professional
associated valuer, the property is valued at R1.028 billion and consists of
a total rentable area of 65 516 m2 at a weighted average rental of R115 per
m2.
CATEGORISATION OF THE TRANSACTION
The transaction is a Category 2 transaction in terms of the JSE Listings
Requirements and is accordingly not subject to approval by Resilient`s
linked unitholders.
FINANCIAL INFORMATION
The unaudited pro forma financial effects have been prepared for
illustrative purposes only to provide information on how the transaction may
have impacted on the historical financial results of Resilient for the six
months ended 30 June 2011. Due to their nature, the unaudited pro forma
financial effects may not fairly present Resilient`s financial position,
changes in equity, results of operations or cash flows after the
transaction. The unaudited pro forma financial effects are the
responsibility of the directors of Resilient and have not been reviewed or
reported on by Resilient`s auditors.
The unaudited pro forma financial effects of the transaction on Resilient`s
basic earnings per share and per linked unit, diluted earnings per share and
per linked unit, headline earnings per share and per linked unit and diluted
headline earnings per share and per linked unit for the six months ended 30
June 2011 are set out below. The unaudited pro forma financial effects of
the transaction on Resilient`s distribution per linked unit, net asset value
and net tangible asset value per linked unit are not material and have not
been disclosed.
Unadjusted Pro forma % change
before the after the
transaction transaction
(cents) (cents)
Basic earnings per share 73.45 65.08 (11.4%)
Basic earnings per linked unit 182.81 172.60 (5.6%)
Diluted earnings per share 70.40 62.54 (11.2%)
Diluted earnings per linked unit 175.22 165.85 (5.3%)
Headline earnings per share 85.24 80.04 (6.1%)
Headline earnings per linked unit 194.60 187.56 (3.6%)
Diluted headline earnings per share 81.70 76.92 (5.9%)
Diluted headline earnings per linked 186.52 180.23
unit (3.4%)
Weighted average number of 249 634 021 265 845 259
shares/linked units in issue
Diluted weighted average number of 260 444 832 276 656 070
shares/linked units in issue
Notes and assumptions:
- The amounts set out in the "Unadjusted before the transaction" column
have been extracted, without adjustment, from the condensed reviewed
consolidated interim financial statements of Resilient for the six
months ended 30 June 2011.
- The transaction is assumed to have been implemented on 1 January 2011
for purposes of basic earnings per share and per linked unit, diluted
earnings per share and per linked unit, headline earnings per share and
per linked unit and diluted headline earnings per share and per linked
unit.
- Boardwalk Shopping Centre is assumed to have been acquired from Capital
for a consideration of R1.040 billion settled as to R514 million in
cash and the balance by the issue of 16 211 238 Resilient linked units
at R32.42 per linked unit, being the 30-day VWAP prior to 1 January
2011 of a Resilient linked unit.
- The fair value of the property portfolio at 30 June 2011 is assumed to
have been R1.028 billion and accordingly the fair value adjustment for
the six months ended 30 June 2011 is assumed to have been R10.3 million
(net of deferred taxation).
- Boardwalk Shopping Centre earned historic net rental income of
approximately R38 million for the six months to 30 June 2011.
- The historical property revenue and expenses were extracted from the
underlying books and records of Boardwalk Shopping Centre which have
not been reviewed or reported on by reporting accountants. However, the
directors of Resilient are satisfied with the quality of the
information.
- The cash portion of R514 million of the purchase price is assumed to
have been financed through interest-bearing debt, assumed to bear
interest at 9.39% per annum, being the historical cost at which
Resilient incurred interest for the six month period ended 30 June
2011.
- Asset management fees received were assumed to reduce by 0.4% per annum
in respect of the cash portion of R514 million of the purchase price.
- Estimated transaction costs of approximately R0.5 million are assumed
to have been incurred by Resilient and have been capitalised.
- All adjustments have a continuing effect.
30 August 2011
Sponsor
Java Capital
Date: 30/08/2011 09:05:01 Produced by the JSE SENS Department.
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