| Thu 10 Jan 2002, 0:00 | | Paramount Property Fund Limited - Acquisition Of A |
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Properties And Further Cautionary Announcement
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 A PORTFOLIO OF EIGHT PROPERTIES AND FURTHER CAUTIONARY
ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement dated 8 January 2002, Paraprop linked
unitholders are advised that, subject to the conditions precedent set out in
paragraph 6 below, agreements have been entered into to acquire a portfolio
of eight properties ("the Midrand portfolio") at a total cost of R58 350 000
("the transaction");
Details relating to the transaction are set out below:
Settlement by
Property Purchase B
price Cash debentures
Rand Rand Rand value
35 Reedbuck Crescent, 8 000 000 6 895 1 105 000
Corporate Park, Midrand 000
Loper Lane & Zurich 4 150 000 3 370 780 000
Street, Aeroport, 000
Spartan
80 Gazelle Close, 3 400 000 2 585 815 000
Corporate Park, Midrand 000
42 Gazelle Close, 6 400 000 4 800 1 600 000
Corporate Park, Midrand 000
32 Gazelle Close, 7 700 000 6 400 1 300 000
Corporate Park, Midrand 000
610 Kyalami Boulevard, 6 800 000 5 795 1 005 000
Kyalami Business Park 000
577 Kyalami Boulevard, 6 900 000 5 760 1 140 000
Kyalami Business Park 000
189 Monte Carlo 15 000 12 157 2 842 500
Crescent, Kyalami 000 500
Business Park
58 350 47 762 10 587 500
000 500
Details relating to the Midrand portfolio are as follows:
1.1 35 Reedbuck Crescent
Vendor: Technifact Investments (Proprietary) Limited.
A 3,300 m} office / warehouse.
1.2 Loper Lane & Zurich Street
Vendor: Catwalk Investments 268 (Proprietary) Limited.
A 1,590 m} office / warehouse.
1.3 80 Gazelle Close
Vendor: Valley Chain Investments (Proprietary) Limited.
A 1,497 m} office block with parking.
1.4 42 Gazelle Close
Vendor: Sihotha Investments (Proprietary) Limited.
A 1,814 m} office / warehouse.
1.5 32 Gazelle Close
Vendor: National Gate Investments (Proprietary) Limited.
A 1,925 m} office block with parking.
1.6 610 Kyalami Boulevard
Vendor: Colkene Investments 3 (Proprietary) Limited.
A 3,119 m} office / warehouse.
1.7 577 Kyalami Boulevard
Vendor: Frolinx Investments (Proprietary) Limited.
A 2,101 m} office block with parking.
1.8 189 Monte Carlo Crescent
Vendor: Heavenly Verse Properties (Proprietary) Limited
A 5,212 m} office block with parking
The cash portion of the purchase consideration for the transaction will be
raised by way of long term loans from the company's bankers.
The issue price of the B debentures will be R5,00 each.
2. Effective date
The effective date of the transaction is 1 November 2001.
3. Rationale
The transaction is 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
transaction based on the notes and assumptions given below:
Movement
Before After (cents) (%)
the the
transacti transact
on (1) ion
Earnings available
for distribution 63,5 58,6 -4,9 -
per linked unit 7,7
(cents)
Net tangible asset
value per linked 459,8 459,8 - -
unit (cents)
Number of linked
units in issue 12 105 12 105 - -
(000's)
Notes:
(1) The "before the transaction" 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.
A detailed profit forecast, together with key assumptions, will be published
in the circular to unitholders referred to in paragraph 7 below.
The reporting accountants have reviewed the profit forecast to 31 October
2002 in terms of paragraph 8.46(c) of the Listings Requirements of the JSE
Securities Exchange South Africa ("JSE") and a copy of their letter in this
regard will be published in the aforementioned circular.
6. Condition precedent
The transaction is subject to:
the approval of Paraprop linked unitholders in general meeting; and
the necessary finance being obtained to settle the cash portion of the
purchase consideration.
7. Circular to linked unitholders
A circular containing details of the Midrand portfolio and convening a
general meeting of members will, subject to the approval of the JSE, be sent
to linked unitholders within 28 days of this announcement.
8. 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
10 January 2002
Corporate adviser and Attorneys
sponsor Cliffe Dekker Fuller Moore
Barnard Jacobs Mellet Inc.
Corporate Finance
Independent reporting Independent property valuers
accountants and auditors Mills Fitchet
Deloitte & Touche
Fund and property managers
Spire Property Services
