| Tue 24 May 2016, 8:30 | | FREEDOM PROPERTY FUND LIMITED - Disposal of Ligitprops 184 Proprietary Limited and cautionary announcement |
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FDP 201605240008A
Disposal of Ligitprops 184 Proprietary Limited and cautionary announcement
Freedom Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2012/129186/06)
Share code: FDP
ISIN: ZAE000185260
(?Freedom? or the ?Group?)
DISPOSAL BY APPLE WAY PROPS PROPRIETARY LIMITED, A WHOLLY OWNED SUBSIDIARY OF
FREEDOM, OF 100% OF THE ISSUED ORDINARY SHARES AND PREFERENCE SHARE CAPITAL IN,
AND CLAIMS AGAINST, LIGITPROPS 184 PROPRIETARY LIMITED AND CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that Apple Way Props Proprietary Limited (the
?Seller?), a wholly owned subsidiary of Freedom, has entered into a sale of
shares and claims agreement (?Sale Agreement?) with Hostprops 97 Proprietary
Limited and LLM Developments Proprietary Limited (collectively the
?Purchasers?) in terms of which the Purchasers will acquire (the ?Sale?) all
of the issued ordinary share capital and preference share capital in and
claims against Ligitprops 184 Proprietary Limited (the ?Company?), for a total
consideration comprising R10,000,000 (ten million Rand) in cash (?Cash
Consideration?) and the delivery of 150,000,000 (One hundred and fifty
million) Freedom ordinary shares (each a ?Share? and collectively ?Shares?)
(?Share Consideration?) valued at R0.14 (fourteen cents) per Share (?Sale
Shares?).
2. RATIONALE FOR THE SALE
The Sale is in line with Freedom?s strategy of divesting of non-core assets
as set out in an announcement released on the Securities Exchange News Service
of JSE Limited (the ?JSE?) on 15 March 2016 (the ?Announcement?). The proceeds
will be applied within the Group in accordance with the details set out in
the Announcement.
3. BACKGROUND TO THE SELLER AND THE PURCHASERS
3.1. The Seller and the Company
The Seller is a wholly owned subsidiary of Freedom. The Company is a wholly
owned subsidiary of the Seller and the owner of properties (the
?Properties?), the majority of which are residential, held under various
deeds of sale and located in Langebaan in the Western Cape.
3.2. The Purchasers
Each of the Purchasers is a private company incorporated in South Africa.
4. MATERIAL TERMS OF THE SALE AGREEMENT
4.1. Conditions Precedent
All conditions precedent to the Sale, including approval by:
- the boards of directors of each of the Seller and the Purchasers;
and
- the requisite majority of Seller shareholders in terms of section
115 read with section 112 of the Companies Act, no 71 of 2008, as
amended,
have been fulfilled.
4.2. Sale Consideration
The Purchasers must procure delivery of 80,000,000 (eighty million) Sale
Shares by the Effective Date and the remaining 70,000,000 (seventy million)
Sale Shares on or before 31 May 2016. The Sale Shares will be cancelled by
Freedom upon receipt.
The Cash Consideration must be paid to the Seller or the Seller?s nominee
on or before 30 June 2016, alternatively, an acceptable guarantee is to be
delivered on or before 30 June 2016.
4.3. Effective Date
The effective date of the Sale Agreement will be the date of fulfilment
(or waiver, as the case may be) of all of the conditions precedent set out
in paragraph 4.1 above.
4.4. Other
The Purchasers have provided warranties to the Seller that are standard to
a transaction of this nature.
5. VALUE AND PROFITS ATTRIBUTABLE TO THE PROPERTIES
The value of the Properties, effective as of 28 February 2015, and as determined
by an external valuer to the Company, JS Bosman (M.I.V) (SA), is as set out
below:
Property AH Plots 25, 26, 28 & 29
Title deed numbers: T67526/2011, T76874/2006, T41918/2009,
T12549/2002, T46747/2001, T81595/1998,
T2491/2008, T49987/2000
Location: Langebaan, Western Cape
Sector: Residential
Original purchase price: R68,690,000 (sixty eight million six hundred and
ninety thousand Rand)
Valuation: R99,500,000 (ninety nine million and five
hundred thousand Rand)
The Properties were held for sale (not lettable) and hence gross lettable area,
weighted average rental per square meter and rental income numbers are not
available.
The Properties contributed R301,000 (three hundred and one thousand Rand) to the
Group?s earnings for the year ended 28 February 2016.
6. CATEGORISATION
Due to its relative size to the market capitalisation of Freedom, the Sale is
deemed to constitute a Category 2 transaction under the JSE Listings Requirements.
Freedom will however approach the JSE for its view as to whether the Purchasers
constitute a related party of Freedom in terms of paragraph 10.2 of the JSE
Listings Requirements. In the event that the JSE should deem the Sale to
constitute a transaction with a related party (?Related Party Transaction?) then
Freedom will dispatch a circular in compliance with section 10 of the JSE Listings
Requirements(?Circular?), including a notice of general meeting, to its
shareholders detailing the terms of the Sale and actions required by shareholders.
7. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that Freedom is yet to approach the JSE for its view as
to whether the Sale constitutes a Related Party Transaction, and hence whether
a Circular will be required. The JSE?s view may have a material effect on the
price of Freedom securities. Accordingly, shareholders are advised to exercise
caution when dealing in Freedom securities until a full announcement is made.
Johannesburg
24 May 2016
Sponsor
Bravura Capital Proprietary Limited
Date: 24/05/2016 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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