| Tue 8 Jan 2002, 0:00 | | Paraprop - Acquisition Of Properties And Further C |
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Paramount Property Fund Limited
(formerly Ovbel Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA ISIN: ZAE000028577
("Paraprop" or "the company")
ACQUISITION OF PROPERTIES AND FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement dated 21 December 2001, Paraprop
linked unitholders are advised that, subject to the condition precedent set
out in paragraph 6 below, agreements have been entered into to acquire:
* three properties for a total consideration of R20 950 000 ("the Pine Ridge
properties"); and
* a property for R19 500 000 from Westway Consortium ("the Westway
property"),
collectively, "the acquisitions".
Details relating to the acquisitions are set out below:
Purchase Settlement by
Property price Cash Linked units B debentures
Rand Rand Rand value Rand value
Pine Ridge properties
2 Devon Road, Pinetown 4 700 000 2 820 000 940 000 940 000
9 Frosterley Crescent,
La Lucia Ridge
Office Estate, La Lucia 6 100 000 3 660 000 1 220 000 1 220 000
1 Devon Road, Pinetown 10 150 000 6 090 000 2 030 000 2 030 000
20 950 000 12 570 000 4 190 000 4 190 000
Westway property
Westway Office Park,
Westville, KwaZulu-Natal 19 500 000 11 700 000 3 900 000 3 900 000
40 450 000 24 270 000 8 090 000 8 090 000
1.1 Pine Ridge properties
1.1.1 2 Devon Road, Pinetown
Vendor: Sound Wave (Proprietary) Limited.
A complex of 16 industrial units.
1.1.2 9 Frosterley Crescent, La Lucia Ridge Office Estate
Vendor: Sandra Property Investments (Proprietary) Limited.
An office block of 1 169 m2.
1.1.3 1 Devon Road, Pinetown
Vendor: Palm River Industrial Park (Proprietary) Limited.
20 sectional title units in Palm River Industrial Park.
1.2 Westway property
1.2.1 Westway Office Park
Vendor: Standard Bank Properties, the trustees of The St Andrew Trust and
The Almur Trust, trading in partnership under the name Westway Consortium.
A 3-storey A-grade office block of 2 576 m2 with basement and open parking.
The cash portion of the purchase consideration for the acquisitions will be
raised by way of long-term loans from the company's bankers.
The issue price of the linked units and B debentures in respect of the Pine
Ridge properties will be 500 cents each.
The issue price of the linked units and B debentures in respect of the
Westway property will be the greater of 500 cents and the weighted average
trading price of Paraprop's linked units on the JSE Securities Exchange
South Africa ("JSE") for the 90 days immediately preceding the effective
date.
2. Effective dates
The effective date of the acquisition of the Pine Ridge properties is 1
November 2001 and the effective date of the Westway property is 1 May 2002.
3. Rationale
The acquisitions are in line with the strategy of the company to provide
linked unitholders with a sustainable growing annuity income stream and
capital growth.
4. Financial effects
The following table sets out the pro forma financial effects of the
acquisitions based on the note and assumptions given below:
Audited After
31 October 2001 After the After the the
Before the Pine Ridge Westway acqui- Movement
acquisitions(1) properties property sitions (cents) (%)
Earnings
available
for
distribution
per linked
unit (cents) 63,5 57,4 60,2 54,7 (8,8) (13,9)
Net tangible
asset value
per linked
unit (cents) 459,8 462,5 462,3 464,6 4,8 1,0
Number of
linked units
in issue
('000) 12 105 12 943 12 885 13 723 - -
Note:
(1) The "before the acquisitions" column is based on the audited results at
31 October 2001.
Assumptions:
* the effective date is 1 November 2000; and
* interest on borrowings is calculated at a pre-tax rate of 12,5% per annum.
5. Forecast distributions
With the significant acquisitions undertaken by the company during the past
financial year and the financial effects thereof not providing a fair
reflection of historical performance, it has been decided by the directors
to include a profit forecast to provide unitholders with an estimation of
future earnings.
The forecast distribution for the year ending 31 October 2002 is 86,4 cents
per linked unit, an increase of 8% over the annualised distribution of 80,0
cents per linked unit for the financial year ended 31 October 2001.
The company's auditors have reviewed the profit forecast to 31 October 2002
in terms of paragraph 8.46(c) of the Listings Requirements of the JSE.
6. Condition precedent
The acquisitions are subject to the JSE granting a listing for the new
linked units to be issued.
7. Further cautionary announcement
Linked unitholders are advised that further negotiations are in progress
which, if successfully concluded, may have a material effect on the price of
the company's linked units on the JSE. Accordingly, linked unitholders are
advised to continue exercising caution when dealing in the company's linked
units until a further announcement is made.
Cape Town
8 January 2002
Corporate adviser and sponsor
Barnard Jacobs Mellet
Corporate Finance
Attorneys
Cliffe Dekker Fuller Moore Inc
(Registration number 1998/018173/21)
Auditors
Deloitte & Touche
Independent property valuers
Mills Fitchet Magnus Penny (Proprietary) limited
Fund and property managers
Spire Property Serices
