| Tue 22 Nov 2011, 17:32 | | RIN - Redefine Properties International Limited - Underwriting of Cromwell |
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RIN
RIN
RIN - Redefine Properties International Limited - Underwriting of Cromwell
Capital Raising and Cautionary Announcement
Redefine Properties International Limited
(Incorporated in the Republic of South Africa)
(Registration number 2010/009284/06)
JSE share code: RIN ISIN Code: ZAE000149282
("RIN" or "the company")
UNDERWRITING OF CROMWELL CAPITAL RAISING AND CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Linked unitholders are advised that the company`s 67% held London Stock
Exchange-listed subsidiary, Redefine International P.L.C. ("RI PLC")
concluded an agreement ("the underwriting agreement") to partially
underwrite a capital raising by the Cromwell Property Group
("Cromwell")("the transaction").
Cromwell is an Australian Property Trust listed on the Australian Stock
Exchange, in which RI PLC currently holds a 21.7% interest through its
wholly-owned subsidiary, Redefine Australian Investments Limited ("RAIL").
Cromwell intends undertaking a capital raising during November 2011 in terms
of which Cromwell proposes to raise approximately AUD145.4 million ("the
Cromwell capital raising") through:
- an institutional placement of new Cromwell stapled securities at
AUD0.68 per stapled security, to raise AUD31 million; and
- a pro-rata non-renounceable entitlement offer of new Cromwell stapled
securities ("the new Cromwell securities") at AUD0.68 per stapled
security, to raise AUD114.4 million ("the entitlement offer").
RATIONALE FOR THE TRANSACTION
The net proceeds of the Cromwell capital raising, after the payment of
costs, will be used to partially fund the acquisition of the `HQ North`
office tower in Fortitude Valley, Brisbane for AUD186 million ("the HQ
North acquisition"). HQ North is expected to enhance the quality of
Cromwell`s existing property portfolio and will provide additional weighting
to the Brisbane office market, an area in which Cromwell believes there is
significant growth potential over the medium term.
Further information in relation to the HQ North acquisition, the funding of
the HQ North acquisition and the effect that these matters and the Cromwell
capital raising will have on Cromwell`s financial position and performance
can be found in the presentation given to the Australian Stock Exchange by
Cromwell today, which can be downloaded from www.cromwell.com.au.
The transaction is in line with RIN`s objective of increasing its presence
in the Australian property market and is expected to be earnings enhancing
for linked unit holders in the medium to long term.
The transaction is expected to secure RAIL`s position as the largest stapled
security holder in Cromwell, and ensures RIN can maintain a significant
influence on the affairs of Cromwell going forward.
SALIENT TERMS OF THE TRANSACTION
In terms of the underwriting agreement, the entitlement offer will be
partially underwritten by RI PLC up to a maximum amount of AUD35 million
(GBP22.1 million) ("underwriting commitment"), which includes RAIL`s
entitlement of AUD24.8 million (GBP15.6 million).
Pursuant to the closure of the entitlement offer on 15 December 2011, RI PLC
will be notified of the number of the new Cromwell securities which it is
obliged to subscribe for in terms of its underwriting commitment on 20
December 2011. A further announcement will be released at that time.
RI PLC is entitled to a fee of AUD875 000 in consideration for providing its
underwriting commitment.
The new Cromwell securities will rank pari passu with existing Cromwell
stapled securities in issue except that they will entitle holders to a pro-
rata share (based on their issue date) only of the distributions from
Cromwell for the quarter ending 31 December 2011.
Assuming that RI PLC is required to fulfill its entire underwriting
commitment of AUD35 million, approximately a third of the AUD35 million will
be funded through an existing facility with Investec Bank (Australia)
Limited and the balance will be funded from available cash resources.
CATEGORISATION OF THE TRANSACTION
Assuming that RI PLC is required to fulfill its entire underwriting
commitment of AUD35 million, the transaction will be classified as a
category 2 transaction in terms of the Listings Requirements of the JSE
Limited.
FINANCIAL EFFECTS AND CAUTIONARY
The financial effects of the transaction have not been finalised and will be
published in due course. Linked unitholders are advised to exercise caution
in their dealings in RIN linked units pending release of a further
announcement.
22 November 2011
Sponsor to Redefine Properties International Limited
Java Capital
Date: 22/11/2011 17:32:00 Produced by the JSE SENS Department.
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