| Fri 22 Jun 2012, 9:45 | | VIF - Vividend Income Fund Limited - Acquisition o |
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VIF
VIF
VIF - Vividend Income Fund Limited - Acquisition of new properties and
cautionary announcement
Vividend Income Fund Limited
Incorporated in the Republic of South Africa
(Registration Number 2010/003232/06)
JSE Alpha Code:VIF
ISIN: ZAE000150918
("Vividend" or "the Company")
ACQUISITION OF NEW PROPERTIES AND CAUTIONARY ANNOUNCEMENT
1 THE SASOL KENT STREET ACQUISITION
Linked unitholders of the Company are hereby advised that the Company has
entered into an agreement with The Sasol Pension Fund to acquire two Sasol
Group tenanted properties and associated letting enterprises ("the Sasol
Kent Street Properties") situated at 272 Kent Avenue Ferndale Randburg and
316 Kent Avenue Ferndale Randburg ("the Sasol Kent Street Acquisition").
The effective date of the Sasol Kent Street Acquisition shall be the date
of transfer of the Sasol Kent Street Properties into the name of the
Company, which, subject to fulfilment of the conditions precedent, is
expected on or about 1 November 2012.
2 RATIONALE FOR THE ACQUISITION
The Sasol Kent Street Acquisition is consistent with Vividend`s strategy of
identifying and acquiring properties that have free cash flow yields that
provide adequate value enhancement to linked unitholders from the effective
date of their acquisition. The Sasol Kent Street Acquisition provides
further quality, stability, longevity and growth potential to the Company`s
earnings by introducing blue-chip medium-term triple net leases into the
Company`s lease profile.
3 PURCHASE CONSIDERATION
The purchase consideration applicable to the Sasol Kent Street Acquisition
is R155 600 000 (one hundred and fifty five million six hundred thousand
rand), payable in cash against transfer of the Sasol Kent Street Properties
into the name of the Company. The Company will fund the purchase
consideration through a combination of debt financing and new equity raised
from new and/or existing linked unitholders. Details of the debt financing
and equity raising will be announced in due course.
4 THE SASOL KENT STREET PROPERTIES
Details of the Sasol Kent Street Properties, as at the expected effective
date, are as follows:
Property Geographical Sector Cost/Value GLA Cost Average
Name and Location per GLA Gross
Address Rental/m2
316 Kent Gauteng Commercial R129,000,000 13,347m2 R9,665 R63.05
Street,
Ferndale
Randburg
272 Kent Gauteng Commercial R26,600,000 2,565m2 R10,370 R59.14
Street
Ferndale
Randburg
R155,600,000 15,912m2 R9,779 R62.42
5 PROPERTY SPECIFIC INFORMATION
Details regarding the Sasol Kent Street Acquisition, as at the expected
effective date, are set out below:
Property Purchase Average Lease Vacancy % Tenant & Lease
Name and Yield Escalation Duration by GLA Type
Address attributable
to Linked
Unitholders
316 Kent 10.83% 8% 3.5 0% Sasol Oil
Street, years
Ferndale
Randburg
272 Kent 9.00% 9% 2.6 0% Sasol Gas
Street years
Ferndale
Randburg
Total 10.52% 8.16% 3.35 0%
years
Notes:
a) The Purchase Yield attributable to Linked Unitholders assumes a 30% Loan to
Value (LTV) gearing limit with an annual interest cost of 8.3%, which is
the current indicative cost available to the Company from its bankers.
b) National or corporate tenants with low levels of default risk (`A Type`
Tenants) constitute 100% of the GLA and 100% of the Gross Rentals within
the Sasol Kent Street Properties.
c) Both the Sasol Oil and Sasol Gas leases are triple net leases, whereby the
tenant is responsible for all operating costs associated with the
properties
d) Save for costs associated with the transfer of the Sasol Kent Street
Properties, which are estimated at R300,000, no expenditure will be
incurred by the Company in connection with the Sasol Kent Street
Acquisition.
e) The cost of each property is considered to be its fair market value, as
determined by the Directors of the Company. The directors of the Company
are not independent and are not registered as professional valuers or as
professional associate valuers in terms of the Property Valuers Profession
Act, No 47 of 2000.
6 CONDITIONS PRECEDENT
The Sasol Kent Street Acquisition is subject the following conditions
precedent:
a) The satisfactory completion of a due diligence investigation, to be
performed by the Company on each property and associated letting
enterprise by 12 July 2012;
b) The trustees of The Sasol Pension Fund passing the required resolution
by 11 July 2012;
c) The Company obtaining the appropriate irrevocable funding commitments
from existing and/or new debt funders, in relation to the Sasol Kent
Street Acquisition, by 12 August 2012;
d) Competition Commission approval, in terms of the Competition Act 89 of
1998 by 12 September 2012;
e) The Company obtaining the appropriate irrevocable undertakings to
subscribe for additional equity from new and/or existing linked
unitholders by 12 September 2012; and
f) Linked unitholders approving the issue of any Linked Units required to
conclude the Sasol Kent Street Acquisition, in terms of the JSE
Listing Requirements, by 12 October 2012.
The Company is entitled to waive the conditions precedent set out in
paragraphs a), c) and e) above.
7 WARRANTIES
The Sasol Pension Fund has provided warranties and indemnities to the
Company that are standard to a transaction of this nature.
8 PRO FORMA FINANCIAL EFFECTS OF THE SASOL KENT STREET ACQUISITION
The pro forma financial information in relation to the Sasol Kent Street
Acquisition is still in the process of being finalised and will be
published in due course.
9 FORECAST FINANCIAL INFORMATION OF THE SASOL KENT STREET ACQUISITION
The forecast financial information in relation to the Sasol Kent Street
Acquisition is still in the process of being finalised and will be
published in due course.
10 CATEGORISATION
The Sasol Kent Street Acquisition is a Category 2 acquisition in terms of
the Listings Requirements of the JSE Limited.
11 CAUTIONARY ANNOUNCEMENT
Linked unitholders are advised to exercise caution when dealing in the
Company`s securities until a full announcement regarding the pro forma
financial effects and the forecast financial information in relation to the
Sasol Kent Street Acquisition is made.
22 June 2012
Cape Town
Sponsor
PSG Capital (Pty) Limited
Date: 22/06/2012 09:16:00 Produced by the JSE SENS Department.
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