| Tue 20 Nov 2001, 0:00 | | Richway Retail - Proposed Voluntary Winding-up |
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RICHWAY RETAIL PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/003602/06)
Share code RHW ISIN ZAE000005906
("Richway" or "the company")
THE PROPOSED VOLUNTARY WINDING-UP OF RICHWAY PURSUANT TO THE DISPOSAL OF THE
MAJORITY OF ITS PROPERTY PORTFOLIO TO PRIMEGRO PROPERTIES LIMITED
1. Introduction
Linked unitholders are referred to the announcement published on 21
September 2001 regarding the disposal of the majority of Richway's property
portfolio to Primegro Properties Limited ("Primegro") ("the disposal"). As
reported, this disposal has achieved the realisation of the full value of
the Richway portfolio for all linked unitholders in a relatively short space
of time. At the time the board was approached by Primegro, it was not the
intention of the directors to dispose of the portfolio they had worked so
hard to accumulate, however, the offer was such that two significant
objectives were achieved simultaneously namely, that of creating a property
fund of some R2 billion while unlocking value for shareholders.
2. The proposed winding-up
The announcement also referred to the potential winding-up of Richway but
stated that a further announcement would be made once the directors had
finalised the relevant mechanism. Linked unitholders are now advised that
the board of directors of Richway proposes, subject to the conditions
precedent outlined below, to proceed with the winding-up of the company as a
members' voluntary winding-up in terms of sections 349 and 350 of the
Companies Act, 1973 (Act 61 of 1973), as amended, ("the winding-up") and the
distribution of the net proceeds realised to linked unitholders. Pursuant to
the winding-up and subject to the approval of the JSE Securities Exchange
South Africa ("JSE"), the listing of Richway's linked units on the JSE will
be terminated.
3. Rationale for the winding-up
The disposal to Primegro has achieved the immediate unlocking of value, both
on newly acquired and historical assets, which value the directors wish to
pass directly on to the linked unitholders. Linked unitholders will then
have flexibility in that they will have the ability to utilise the cash
proceeds from the liquidation dividend in a manner which they deem
appropriate. They will also have the ability to participate directly in a
much larger property fund, via their holding in Primegro, which will have a
portfolio of some R2 billion after acquiring the Richway property portfolio,
or dispose of their Primegro entitlement in accordance with their
preferences.
4. Conditions precedent to the winding-up
The winding-up is conditional on the disposal being implemented and the
approval of linked unitholders in general meeting of the special and
ordinary resolutions relating to the winding-up.
5. Record date
It is anticipated that the record date for participation in the liquidation
dividend will be Friday, 1 March 2002. This date is contingent upon, inter
alia, the successful implementation of the disposal during January 2002 and
is therefore subject to change. Any such change will be announced in the
press and on SENS but in any event, an announcement confirming the record
date and liquidation dividend will be made by no later than Friday, 15
February 2002.
6. The liquidation dividend
Pursuant to the fulfilment of the conditions precedent to the winding-up, it
is proposed that Richway will make the following estimated distributions to
linked unitholders registered as such on the record date ("the liquidation
dividend"):
* an estimated preliminary cash distribution of 362 cents per linked unit
in anticipation of the liquidation of the company ("the preliminary cash
distribution") the amount of which will be confirmed in the announcement to
be made by no later than Friday, 15 February 2002, at which date the
disposal would have been finalised and the remaining assets and liabilities
on the Richway balance sheet wound-up;
* a distribution in specie of Richway's entire holding of 23 731 343
Primegro deferred linked units in the ratio of 35,524838 Primegro deferred
linked units for every 100 Richway linked units ("the Primegro
distribution"); and
* a final liquidation distribution.
The table below sets out the estimated face value of the liquidation
dividend:
Cents per
Notes linked unit
Preliminary cash distribution 1 362
Primegro distribution 2 238
Final liquidation distribution 3 -
Total liquidation dividend Estimated 600
Notes:
1. The amount of the preliminary cash distribution is estimated and based
upon assumptions made as regards, inter alia, the disposal transfer date,
the winding-up of the remaining assets and liabilities on the Richway
balance sheet after the disposal and the costs associated with the winding-
up process.
2. Assuming a market value of R6,70 per Primegro linked unit.
3. The balance of any cash held by Richway after settling any claims,
winding-up costs and taxes, will be paid to linked unitholders registered as
such on the record date as a final liquidation distribution. This
distribution is not expected to be material and will be paid to linked
unitholders as soon as possible after the winding-up has been finalised to
the satisfaction of the Master of the High Court of South Africa.
7. Pro forma financial effects of the winding-up
The table below sets out the pro forma financial effects of the winding-up
on the pro forma distributions received per linked unitholder and the market
value of the investment of a linked unitholder based upon the following
assumptions:
* the disposal and the winding-up were effected on 1 July 2000 and 1 August
2000, respectively;
* interest is earned at 9% per annum on cash received;
* Pro forma distributions:
* the amount shown in the pro forma "before" column is the actual
distributions received by a linked unitholder during the 12 month period
ended 30 June 2001 plus interest;
* the amount shown in the pro forma "after" column is the sum of the
Richway distribution paid on 29 September 2001, the estimated preliminary
cash distribution and the distribution by Primegro of 44,5 cents per
Primegro linked unit paid on 15 January 2001 plus interest;
* Market value of the investment:
* the amount shown in the pro forma "before" column is the market value of
a Richway linked unit at 30 June 2001;
* the amount shown in the pro forma "after" column is the sum of the
preliminary cash distribution and the market value of the Primegro
distribution at 30 June 2001 using a market value of R6,95 per Primegro
linked unit.
Cents per linked unit: Pro forma Pro forma Change
Before After %
Distributions received 55,67 73,65 32,30
Market value of investment 398,00 608,90 52,99
The above table clearly demonstrates the significant benefit to be gained by
all linked unitholders from the approval and implementation of the disposal
and proposed winding-up.
8. Termination of the listing of Richway's linked units on the JSE
Subject to the fulfilment of the conditions precedent to the winding-up, the
listing of Richway's linked units on the JSE will initially be suspended and
thereafter terminated on finalisation of the winding-up.
9. Important dates
Linked unitholders are advised that the dates in the table below are subject
to amendment; any amendment made will be published in the press and via
SENS:
2002
Announcement confirming record date and amount of
preliminary cash distribution Friday, 15 February
Last date to trade cum the liquidation dividend from
the close of business Friday, 22 February
Listing of Richway's linked units suspended from
commencement of business Monday, 25 February
Record date to participate in the liquidation
dividend Friday, 1 March
Preliminary cash distribution and Primegro distribution
made Monday, 4 March
10. The interim results and distributions for the six months ending 31
December 2001
Linked unitholders are advised that the winding-up and liquidation dividend
will not impact on the interim dividend and interest distribution from the
profits of the Richway group for the six months ending 31 December 200l,
which is anticipated to be made to linked unitholders in February 2002.
11. Further announcement and documentation
A further announcement will be made advising shareholders of the final
terms of the liquidation dividend and confirming the relevant dates by no
later than 15 February 2002.
A circular, which is subject to JSE approval, containing full information
on the disposal and the winding-up, together with a notice convening a
general meeting of linked unitholders to be held on Thursday, 13 December
2001, will be dispatched to linked unitholders on or about 21 November 2001.
Johannesburg
20 November 2001
Sponsor and independent adviser
Barnard Jacobs Mellet Corporate Finance
Attorneys
FRRW
Fluxman Rabinowitz - Raphaely Weiner Inc. Attorneys
www.frrw.co.za
Corporate adviser
Vestacor Corporate Finance
A division of Vestacor Holdings (Pty) Ltd)
Registration number 1997/022546/07)
