| Thu 1 Dec 2011, 11:52 | | RDF/AWA/AWB - Redefine Properties Limited/Arrowhead Properties Limited - |
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RDF/AWA/AWB - Redefine Properties Limited/Arrowhead Properties Limited -
Finalisation date announcement regarding Arrowhead unbundling and the Arrowhead
abridged pre-listing statement
Redefine Properties Limited
(Registration No. 1999/018591/06)
JSE code: RDF ISIN Code: ZAE000143178
("Redefine" or "the company")
Arrowhead Properties Limited
(formerly Nervada Trading 13 (Proprietary) Limited)
(Registration number 2011/000308/06)
JSE code: AWA ISIN: ZAE000158101
JSE code: AWB ISIN: ZAE000158119
("Arrowhead")
FINALISATION DATE ANNOUNCEMENT REGARDING ARROWHEAD UNBUNDLING AND THE ARROWHEAD
ABRIDGED PRE-LISTING STATEMENT
FINALISATION DATE ANNOUNCEMENT
Redefine linked unitholders are referred to the circular to Redefine linked
unitholders dated 30 September 2011 ("the unbundling circular") and the pre-
listing statement of Arrowhead, dated 30 September 2011 ("the pre-listing
statement"), relating to, inter alia:
- the proposed distribution of the Arrowhead consideration shares and the
Arrowhead consideration debentures to Redefine linked unitholders,
immediately after which same will be indivisibly linked as Arrowhead linked
units; and
- the proposed listing of the Arrowhead linked units in the "Real Estate
Holdings & Development" sector of the main board of the securities exchange
operated by the JSE,
collectively the transactions ("the transactions").
Terms defined in the unbundling circular and/or the pre-listing statement shall
bear the same meanings in this announcement.
Redefine linked unitholders are hereby advised that the listing condition, being
the registration of transfer from Redefine to Arrowhead of more than half (by
market value) of the owned property portfolio, as set out in Annexure 4 of the
pre-listing statement, has now been fulfilled.
The salient dates and times applicable to the transactions are as follows:
Finalisation date announcement and the abridged pre- Thursday, 1 December 2011
listing statement published on SENS on
Finalisation date announcement and the abridged pre- Friday, 2 December 2011
listing statement published in the press on
Last day to trade in Redefine linked units on the Thursday, 8 December 2011
JSE in order to participate in the repayment and the
unbundling on
Redefine linked units will trade ex the repayment Friday, 9 December 2011
and the unbundling and Arrowhead linked units will
be listed on the JSE from the commencement of trade
on
Unbundling record date in order to participate in Thursday, 15 December 2011
the repayment and the unbundling on
Date that the Arrowhead linked units pursuant to the Monday, 19 December 2011
repayment and the unbundling are to be credited to
the accounts of dematerialised shareholders at their
CSDP or broker and posted to certificated Redefine
linked unitholders on
Tax apportionment announcement pursuant to the Monday, 19 December 2011
unbundling
Notes:
1. All dates and times are local time in South Africa.
2. Redefine linked unit certificates may not be dematerialised or
rematerialised between the listing date and the unbundling record date, both
days inclusive.
ABRIDGED PRE-LISTING STATEMENT - LISTING OF ARROWHEAD ON THE JSE LIMITED
Abridged pre-listing statement relating to:
- the proposed distribution of the Arrowhead consideration shares and the
Arrowhead consideration debentures to Redefine linked unitholders,
immediately after which same will be indivisibly linked as Arrowhead linked
units; and
- the proposed listing of the Arrowhead linked units in the "Real Estate
Holdings & Development" sector of the main board of the securities exchange
operated by the JSE.
This abridged pre-listing statement is not an invitation to the public to
subscribe for linked units in Arrowhead, but is issued in compliance with the
JSE Listings Requirements for the purposes of giving information to Redefine
linked unitholders and the public in relation to Arrowhead.
This announcement contains the salient information in respect of Arrowhead,
which is more fully described in the pre-listing statement which was sent to
Redefine linked unitholders on 30 September 2011. For a full appreciation of
Arrowhead, the repayment, the unbundling and the listing, the pre-listing
statement should be read in its entirety.
INTRODUCTION
The JSE has granted Arrowhead a primary listing of:
- 84 839 675 A linked units comprising 84 839 675 shares having no par value,
each linked to an unsecured variable rate subordinated A debenture with a
face value of 101,76 cents each; and
- 84 839 675 B linked units comprising 84 839 675 shares having no par value,
each linked to an unsecured variable rate subordinated B debenture with a
face value of 101,76 cents each,
in the "Real Estate: Real Estate Holdings and Development" sector of the JSE
Lists, in terms of the FTSE classification, under the abbreviated name "ARROW
A", JSE code: "AWA" and ISIN code: ZAE000158101 and "ARROW B", JSE code "AWB"
and ISN code: ZAE000158119, with effect from the commencement of trade on
Friday, 9 December 2011.
BACKGROUND TO ARROWHEAD
Arrowhead, a wholly-owned subsidiary of Redefine until the repayment and the
unbundling, was incorporated on 5 January 2011 as a private property holding and
investment company and converted to a public company on 1 September 2011.
Arrowhead`s financial year end is 30 September. Arrowhead has acquired a diverse
portfolio of 89 properties from Redefine, spread across the retail, office and
industrial sectors, and across South Africa. Arrowhead has agreed to acquire a
further 9 properties, subject to certain suspensive conditions, as is further
detailed in the pre-listing statement.
MANAGEMENT OF ARROWHEAD
Gerald Leissner is the CEO of Arrowhead and has been active in the property
sector for an extensive period of time. Gerald brings with him a wealth of
experience in the listed property sector. He was previously CEO of ApexHi
Properties Limited for 8 years until its merger with Redefine. He was appointed
a director of Redefine on 5 August 2009.
Mark Kaplan, in his role as COO and Imraan Suleman, in his role as CFO, will
complement Gerald`s experience, both having experience in the property sector.
DETAILS OF THE ACQUISITION, THE UNBUNDLING, THE REPAYMENT AND THE LISTING
Pursuant to the acquisition agreement, Redefine agreed to sell to its
subsidiary, Arrowhead, which agreed to purchase, with effect from:
- 1 September 2011, subject to the owned properties conditions precedent, the
owned properties businesses and the related owned properties portfolio;
- the pre-emptive properties effective date, subject to the pre-emptive
properties conditions precedent, the pre-emptive properties businesses and
the related pre-emptive properties; and
- the leasehold properties effective date, subject to the leasehold
properties conditions precedent, the leasehold properties, businesses and
the rights and obligations under the head lease agreements in respect of
the leasehold properties.
The purchase price paid for the owned properties businesses and the related
owned properties has been discharged partly in Arrowhead consideration shares,
partly in Arrowhead consideration debentures and partly by the creation of a
loan account against Arrowhead in favour of Redefine, to be discharged as
indicated in the pre-listing statement.
The purchase price payable in respect of the pre-emptive properties businesses
and the related pre-emptive properties is to be discharged partly in cash and
partly in Arrowhead A linked units and Arrowhead B linked units.
The purchase price payable for the leasehold properties businesses and the
cession and assignment of the rights and obligations under the head lease
agreements in respect of the leasehold properties is to be discharged partly in
cash and partly in Arrowhead A linked units and Arrowhead B linked units.
It is intended that the Arrowhead consideration shares issued to Redefine in
part discharge of the purchase price pertaining to the owned properties
businesses and related owned properties be unbundled and the Arrowhead
consideration debentures issued to Redefine in part discharge of the purchase
price pertaining to the owned properties businesses and related owned properties
be distributed by way of the partial repayment of capital to Redefine linked
unitholders. Accordingly it is intended that:
- in terms of section 46 of the Companies Act the Arrowhead consideration
shares be unbundled to Redefine linked unitholders in terms of section 46
of the Income Tax Act; and
- the Arrowhead consideration debentures be distributed to Redefine linked
unitholders as a partial repayment of capital in terms of paragraph 19.4 of
the Redefine debenture trust deed,
immediately whereafter the Arrowhead consideration shares will be indivisibly
linked to the Arrowhead consideration debentures as Arrowhead A linked units and
Arrowhead B linked units.
In compliance with the JSE timetable pertaining to unbundlings, the Arrowhead
consideration shares and the Arrowhead consideration debentures shall be listed
on the "Real Estate Holdings & Development" sector of the main board of the JSE
as Arrowhead linked units not less than 5 trading days prior to the unbundling
date.
NATURE OF BUSINESS
Arrowhead is a property loan stock company holding a diverse portfolio of
properties throughout South Africa. Its main focus will be on paying growing
income returns to its investors. This will be achieved through escalating
rentals in terms of leases with tenants, satisfactory renewal of leases with
existing tenants, letting of vacant space within the portfolios, managing and
reducing, where possible, costs associated with the portfolios and by acquiring
revenue enhancing properties.
Secondary grade properties brings with it additional business risk and this is
to be managed by having a growing portfolio, as diversified as possible in terms
of number of properties, a spread of tenants, of which, over time, will be rated
as A grade, a spread of locations throughout South Africa and a spread of
properties over the retail, office and industrial sectors of the property
market. It will also be the intention to fix interest rates on the majority of
Arrowhead`s debt to reduce exposure to interest rate risk. Active investor
relations as well as best practice corporate governance will also be a feature
of Arrowhead.
Arrowhead is to be managed internally with the day to day property management
being carried out by JHI.
LINKED UNITS
Two classes of linked units will be issued by Arrowhead:
- A linked units (comprising ordinary shares linked to A debentures), the A
debenture portion of which, in respect of each 3 month income period, shall
be paid an interest payment of 15 cents per A debenture or 50% of the
distributable earnings (divided by the number of A linked units in issue as
at the relevant record date) in respect of that 3 month period, whichever
is the greater, as interest;
- B linked units (comprising ordinary shares linked to B debentures), the B
debenture portion of which, in respect of each 3 month period, shall be
paid the balance of the distributable earnings (divided by the number of B
linked units in issue as at the relevant record date) in respect of that 3
month period, as interest.
Distributions will be payable quarterly. The A linked units will cater for risk
averse investors and the B linked units for those investors with an appetite for
risk. Being able to acquire both A and B linked units enables investors to vary
their level of risk.
The Arrowhead debenture trust deed provides that with effect from the day
immediately after the record date in respect of the fourth consecutive income
period where the interest payment in respect of each A debenture (included in an
A linked unit) is equal to or greater than 30 cents per A debenture (the day
immediately after the record date in respect of the last such income period
being referred to as "the conversion date" and the occurrence of such fact being
referred to as the "conversion event") every B debenture (linked to an ordinary
share as part of a B linked unit) shall automatically convert into 1 A debenture
(linked to an ordinary share as part of an A linked unit), as set out herein,
and (given that there will only be one class of debentures) the preferential
rights attributable to the A debentures will fall away.
PROSPECTS AND FORECAST
Arrowhead`s focus will be on identifying opportunities to grow income
distributions to Arrowhead linked unitholders. Arrowhead`s management is of the
opinion that Arrowhead is well positioned to identify potential income enhancing
acquisitions and to enhance cost savings within the portfolios.
The table below sets out a summary of the forecast for Arrowhead for the year
ending 30 September 2012 in respect of the owned properties portfolio only.
Forecast for the year
ending 30 September 2012
(R`000)
Distributable earnings 85 175
Actual number of A linked units in issue 86 571 739
Actual number of B linked units in issue 86 571 739
Distribution per A linked unit (cents) 60.00
Distribution per B linked unit (cents) 38.38
Earnings and headline earnings per A linked unit 53.21
(cents)
Earnings and headline earnings per B linked unit 53.21
(cents)
DIRECTORS
The full names, nationalities and business addresses of the directors of
Arrowhead are set out below.
Taffy Adler Independent non-executive chairman
Nationality South African
Business address 10 Thrushton Place, 22 Westwood Avenue,
Melrose North, Johannesburg
Gerald Leissner Chief executive officer
Nationality South African
Business address 2b Mervyn Road, Glenhazel, Johannesburg
Imraan Suleman Chief financial officer
Nationality South African
Business address JHI Place, 2 Norwich Close, Sandton
Mark Kaplan Chief operating officer
Nationality South African
Business address JHI Place, 2 Norwich Close, Sandton
Elize Stroebel Independent non-executive director
Nationality South African
Business address 53 Main Street, Marshalltown, Johannesburg
Matthew Nell Independent non-executive director
Nationality South African
Business address 3rd Floor, 132 Jan Smuts Avenue, Rosebank
ACTION REQUIRED
If you are in any doubt as to what action to take, you should consult your
broker, attorney or other professional advisor immediately.
Redefine linked unitholders are referred to the unbundling circular dated 30
September 2011 relating to, inter alia, the unbundling of the Arrowhead
consideration shares and the distribution of the Arrowhead consideration
debentures to Redefine linked unitholders immediately whereafter same will be
indivisibly linked as Arrowhead linked units.
The number of Arrowhead linked units to be unbundled or distributed for every
31.70889 Redefine linked units held by a Redefine linked unitholder at the close
of business on the unbundling record date will be one Arrowhead A linked unit
and one Arrowhead B linked unit.
Redefine linked unitholders who hold 31 or less Redefine linked units on the
unbundling record date shall have their proportionate entitlement to Arrowhead
linked units sold on their behalf and receive their pro rata proportion of the
cash proceeds thereof.
FURTHER COPIES OF THE PRE-LISTING STATEMENT
Copies of the pre-listing statement may be obtained between 08:30 and 17:00 on
business days from the date of issue of the pre-listing statement until the
listing date at the following places:
Java Capital
2 Arnold Road
Rosebank, Johannesburg,
2196, South Africa
Computershare Investor Services (Proprietary) Limited
Ground Floor, 70 Marshall Street
Johannesburg, 2001
1 December 2011
Corporate advisor, legal advisor and sponsor to Redefine and Arrowhead
Java Capital
Date: 01/12/2011 11:52:01 Produced by the JSE SENS Department.
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employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
