| Wed 2 May 2001, 0:00 | | Octodec - Announcement To Unit Holders |
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OCTODEC INVESTMENTS LIMITED
(Registration number 1956/002868/06)
(Incorporated in the Republic of South Africa)
("Octodec")
Announcement to unit holders regarding the acquisition by Octodec of the entire
issued share capital of:
* Waverley Plaza Properties (Proprietary) Limited;
* Elardus Park Shopping Centre Share Block (Proprietary) Limited; and
* Troymana Properties (Proprietary) Limited (collectively "the acquisitions").
1. INTRODUCTION
Further to the cautionary announcement that was contained in the announcement
to shareholders published in the press on Tuesday, 3 April 2001, Benefique
Capital is authorised to announce that Octodec has acquired the entire issued
share capital of the following companies:
* Waverley Plaza Properties (Proprietary) Limited which owns erf 2172
Villieria, Pretoria ("Waverley Plaza");
* Elardus Park Shopping Centre Share Block (Proprietary) Limited which owns
erven1931 and 9 Elardus Park, Pretoria ("Elardus Park"); and
* Troymana Properties (Proprietary) Limited which owns portion 7 of erf 1979,
portion 19 of erf 1981, portion 12 of erf 1981, Villieria, Pretoria
("Troymana").
Waverley Plaza is a shopping centre situated in Hertzog Street, Villieria,
Pretoria with approximately 10 609 square metres of retail space. Elardus Park
is a shopping centre situated in Barnard Street in Elardus Park, Pretoria with
approximately 9 450 square metres of retail space. Troymana consists of an old
building in Waverley, Pretoria and negotiations have commenced in terms of
which it is intended to sell this property to McDonalds, the well known
international food franchise which is planning to open a McDonalds restaurant
on this site. The remaining properties owned by Troymana in Villieria, Pretoria
are earmarked to be part of the future extension of Waverley Plaza. Barclay
Square is a shopping centre with offices and flats, situated in Walker Street,
Sunnyside, Pretoria. The whole centre measures 20 102 square metres.
The acquisitions form one indivisible transaction and are subject to the
fulfilment of certain conditions precedent set out in paragraph 4 below.
2. RATIONALE FOR THE ACQUISITIONS
The acquisitions form part of the strategy to increase the size and quality of
the total property portfolio as set out in the circular to shareholders dated
18 April 2001 regarding the acquisition of Killarney Mall.
As stated in the aforementioned circular, the recent decline in South African
interest rates has made it more attractive for property loan stock companies
like Octodec to use gearing to acquire new properties.
3. THE ACQUISITION
3.1 Terms of the acquisitions
The total purchase consideration for the acquisitions is the sum of R52,9
million which is to be paid in cash to the vendor, Richway Retail Properties
Limited ("Richway"), a company listed in the "Property Loan Stock" sector of
the JSE Securities Exchange South Africa ("the JSE").
The purchase consideration will be funded entirely by way of mortgage finance.
3.2 Effective date
The effective date for the acquisitions will be 1 July 2001.
3.3 Warranties
The vendor has provided the usual warranties in transactions of this nature.
4. CONDITIONS PRECEDENT
The acquisitions are subject to the following material conditions precedent:
* approval of the acquisitions by Octodec linked unit holders in general
meeting; and
* approval of the acquisitions by the JSE, the Competition Commission and any
other applicable regulatory bodies.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the acquisitions
based on Octodec's unaudited published interim results for the six months ended
28 February 2001, on the assumption that the acquisitions had been in effect
from 1 September 2000 for the purpose of the headline earnings per linked unit
calculation and that there were 61 492 890 linked units in issue. Furthermore,
it has been assumed that the net rental income for the six months to 30 June
2001 will be R4,3 million before any finance costs, which amount has been based
on current lease agreements. An interest rate on the mortgage finance of 13,6%
has been used in determining the finance costs. In addition, it has been
assumed that costs of R2,4 million will be incurred which costs are associated
with mortgage registration, commissions and advisors' fees, as well as costs
relating to the upgrade of Elardus Park.
Pro forma
Before the After the
acquisition acquisition Change
(cents) (cents) (%)
Headline earnings per linked unit (cents) 22,81 23,37 2,45
The acquisitions will not have a material effect on the net asset value per
linked unit.
6. CIRCULAR TO UNIT HOLDERS
A circular giving full details of the acquisitions and giving notice of the
general meeting to approve the acquisitions will be sent to unit holders within
28 days of this announcement or such later time as may be agreed to by the JSE.
7. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Unit holders are advised that the cautionary announcement that was contained in
the announcement to unit holders published in the press on Tuesday, 3 April
2001 is withdrawn.
Pretoria
2 May 2001
Corporate adviser and sponsor
Benefique Capital
Reporting accountants
Deloitte Touche
Attorneys
Moss-Morris Inc.
(Registration number 94/08751/21)
