| Tue 6 Sep 2016, 7:05 | | FREEDOM PROPERTY FUND LIMITED - Disposal By Subsidiary |
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FDP 201609060001A
Disposal By Subsidiary
Freedom Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2012/129186/06)
Share code: FDP
ISIN: ZAE000185260
(“Freedom” or the “Company” or the “Group”)
DISPOSAL OF WEST PARK PALMS SITUATED ON ERF 5679 KROONSTAD (EXTENSION 50)
1. INTRODUCTION
Shareholders are advised that a wholly owned subsidiary of Freedom, Ivory Sun
Trading 115 Proprietary Limited (the “Seller”) has entered into a sale
agreement (“Sale Agreement”) with K2016357129 (SOUTH AFRICA) Proprietary
Limited trading as Global Kingdom Business International (the “Purchaser”) in
terms of which the Purchaser will acquire (the “Sale”) Erf 5679 (Extension
50) in the district of Kroonstad in the Orange Free State (the “Property”),
for a total consideration of R6,000,000.00 (six million Rand) in cash (“Cash
Consideration”).
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 Company
The Seller is a wholly owned subsidiary of Freedom and the owner of the
Property.
3.2. The Purchaser
The Purchaser 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 board of
directors of each of the Seller and other than:
- the completion of a satisfactory due diligence (“Due Diligence”) by the
Purchaser within 30 business days of the receipt of information relevant
to the Due Diligence;
- the raising of a private loan facility (the “Loan Facility”) by the
Purchaser within 30 business days of the satisfactory completion of the
Due Diligence; and
- the transfer of the Property from the Seller to the Purchaser,
have been fulfilled.
4.2. Sale Consideration
The Cash Consideration will be payable to the Seller on the transfer of
the Property.
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
Freedom and the Purchaser have each provided warranties that are standard
to a transaction of this nature.
5. VALUE AND PROFITS ATTRIBUTABLE TO THE PROPERTY
The value of the Property, effective as of 28 February 2015, and as determined
by an external valuer to the Company, Mr JS Bosman (M.I.V) (SA), is as set out
below:
Title deed number: T3984/2014
Location: Kroonstad, Orange Free State
Sector: Residential
Original purchase price: R 9,840,280.00 (nine million eight
hundred and forty thousand two
hundred and eighty Rand)
Valuation (2015): R 8,450,000.00 (eight million four
hundred and fifty thousand Rand)
Gross lettable area: 829sqm
Weighted average rental per square meter: R70.54/sqm
Gross rental income per month: R57,072.00
The Property contributed a net loss of R1,312,771.00 (one million three hundred
and twelve thousand seven hundred and seventy-one Rand) and R77,509.00 (seventy-
seven thousand five hundred and nine Rand) to the Group’s earnings and headline
earnings respectively for the year ended 28 February 2015.
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.
Johannesburg
6 September 2016
Sponsor
Bravura Capital Proprietary Limited
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