| Fri 27 Jul 2001, 0:00 | | Atlas Properties Limited - Acquisition Of Property |
|
ATLAS PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Reg. No. 1988/000742/06)
("Atlas" or "the company")
propertyatlas.com
ACQUISITION OF PROPERTY INTERESTS BY ATLAS
1. INTRODUCTION
Further to the cautionary announcement published on Tuesday, 19 June 2001,
the directors of Atlas hereby announce that the Company has entered into
several agreements to acquire a number of property interests ("the
acquisitions").
2. OVERVIEW OF THE ACQUISITIONS
2.1. ACQUISITION OF ADVENT PROPERTIES (PROPRIETARY) LIMITED
With effect from 30 September 2001, Atlas will acquire the Cape Municipal
Pension Fund's entire interest in Advent Properties (Proprietary) Limited
("Advent"), for a total purchase consideration of R253,25 million ("the
Advent acquisition"). The purchase consideration will be settled in cash
which will be raised by means of a secured loan facility ("the loan
facility").
Advent owns 30 properties having 130 000m2 of total lettable area
(industrial 9%, commercial 6%, retail 57% and office 28%), situated in
Gauteng and the Western Cape.
2.2. ACQUISITION OF THE PROPERTIES
With effect from 1 July 2001, Atlas will acquire six commercial properties
having a total lettable area of 24 100m2 and vacant land for development
("the properties") for a total purchase consideration of R149 million ("the
property acquisition"). The properties are all located in the Western Cape.
The purchase consideration shall be settled partly in cash of R3,725 million
("the cash settlement") and partly by the issue of 23 059 524 new linked
units in Atlas at an issue price of 630 cents each ("the new linked units").
The cash settlement and the issue of 8 659 522 new linked units will be
effected against the transfer of each property, which is expected by no
later than 30 September 2001. In order to avoid any earnings dilution, the
remaining 14 400 002 new linked units will be issued as soon as possible
after 1 January 2002 and these will accordingly not participate in the
September 2001 year end distribution.
2.3. INFORMATION ON THE VENDORS OF THE PROPERTIES
Description of the Vendor Total purchase
properties consideration (Rand)
1. AST Terraces Golfprop One (Pty) Ltd 19 500 000
2. Mutual Gardens Golfprop Two (Pty) Ltd 35 300 000
3. Engen House Golfprop Three (Pty) Ltd 14 200 000
4. Connection House Golfprop Four (Pty) Ltd 19 600 000
5. Vacant land Golfprop Five (Pty) Ltd 12 700 000
Golfprop Six (Pty) Ltd
and the vendors listed in
2, 3 and 4 above.
6. Albion Spring The Albion Partnership 23 400 000
Note 1
7. Mutual Terrace Mulbro Properties (Pty) Ltd 24 300 000
Note 2
Note 1:
The members of the Albion Partnership are as follows:
- The van Zyl Waterside Trust (16,67%)
- Zyltrust (33,33%)
- Rietvlei Trust (16,67%)
- Jowprop (Pty) Ltd (16,67%)
- Mulbro Properties (Pty) Ltd (16,67%)
Note 2:
With the exception of Mulbro Properties (Pty) Ltd ("Mulbro"), the vendors
and their associates are not, in terms of the Listings Requirements of the
JSE Securities Exchange South Africa ("the JSE"), in any way related to
Atlas.
Mulbro currently holds 40,7% of the linked units in issue and is controlled
by the executive directors of Atlas.
3. RATIONALE FOR THE ACQUISITIONS
The acquisitions are a further step in Atlas' long-term strategy of
enhancing value for shareholders by creating a substantially enlarged,
clearly focused property portfolio of approximately R1 billion. Market
capitalisation of Atlas is projected to increase from R264 million to R414
million through the issue of the new linked units. This should improve both
the tradeability and market price of the linked units.
The overall portfolio's geographical and sectoral diversification will
increase the focus on Cape properties, whilst the loan facility is expected
to enhance the overall long-term benefits to unit holders.
4. FINANCIAL EFFECTS OF THE ACQUISITIONS
The earnings and headline earnings per linked unit before the acquisitions,
for the 12 months ended 31 March 2001, were 79,93 cents and 80,02 cents
respectively. Had the acquisitions been implemented on 1 April 2000 they
would not have had a material effect on earnings and headline earnings for
the 12 months ended 31 March 2001.
The net asset value and tangible net asset value per linked unit at market
value before the acquisitions as at 31 March 2001 were 653 and 624 cents
respectively. Had the acquisitions been implemented on 31 March 2001 they
would not have had a material effect on net asset value and tangible net
asset value as at 31 March 2001.
5. CONDITIONS PRECEDENT
The acquisitions are subject, where relevant, to the fulfilment of the
following conditions precedent :
* obtaining the requisite regulatory approvals including, inter alia, the
approval by the Competition Commission in terms of the Competitions Act,
1989 (No. 89 of 1989), as amended;
* obtaining approval by the requisite majority of linked unit holders;
* the finalisation of the loan facility; and
* the Committee of the JSE granting approval for the listing of the new
linked units.
6. INCREASE IN BORROWING POWERS
The directors of Atlas propose increasing the Company's borrowing powers by
10% from 40% to 50% of the aggregate gross book value of the property and
assets of the Company. After the acquisitions, borrowings will be at 45% of
the estimated gross book value of R714 million.
7. CONTROL OF ATLAS
After the acquisitions, Mulbro will hold 23 500 100 (16 522 915 prior to the
acquisitions) linked units, being 36,9% (40,7% prior to the acquisitions) of
the total linked units then in issue.
8. GENERAL MEETING
A general meeting of linked unit holders will be held on or about Thursday,
13 September 2001 for the purpose of considering and, if deemed fit, passing
the resolutions necessary to give effect to the acquisitions ("the
resolutions").
In terms of the Listing Requirements of the JSE, Mulbro is deemed to be a
related party to Atlas and will not be taken into account in determining the
quorum for purposes of the ordinary resolution authorising the acquisition
of the property currently owned by Mulbro. Mulbro's votes will not be taken
into account in determining the results of the voting on such resolution.
9. OPINIONS AND RECOMMENDATIONS
The directors of Atlas have considered the terms and conditions of the
acquisitions and are of the opinion that they are fair and reasonable to
linked unit holders. The directors unanimously recommend that linked unit
holders vote in favour of the resolutions and intend to vote in favour
thereof in respect of the linked units beneficially owned by them or under
their control.
10. DOCUMENTATION
A circular, which is subject to the approval of the JSE, containing full
details of the acquisitions and the resolutions and the revised listing
particulars of Atlas subsequent to the acquisitions, is being prepared and
will be posted to linked unit holders in due course.
For and on behalf of the board
ATLAS PROPERTY SERVICES (PTY) LTD
Secretaries
CAPE TOWN
27 July 2001
Corporate advisor
AC Morris and Associates
Auditors and reporting accountants
Deloitte & Touche
Legal advisors
Sonneberg Hoffmann & Galombik Inc.
(Registration number 1993/000565/21)
Sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
