Primegro Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/018436/06)
Share code: PMG ISIN: ZAE000022620
("Primegro")
Further Details Regarding The Richway Acquisition
Primegro furnishes the following further information pursuant to its
circular to Primegro linked unitholders dated 19 November 2001:
* All conditions precedent to the Richway acquisition have been met.
* Primegro has successfully completed the placement of its linked units
totalling approximately R340 million, as detailed in the circular.
* The Primegro linked units issued to the placees have been listed by the
JSE Securities Exchange South Africa. The total Primegro issued linked units
stands at 120 263 749.
* The 23 134 378 deferred linked units issued to Richway (including the
Erlank units) will be listed during July 2002.
* Transfer of all the Richway properties save for the 50,1% interest in
Longbeach Mall ("Longbeach") has been registered. The Longbeach transfer
will follow after the conclusion of a joint ownership agreement with Cape of
Good Hope Bank ("CGHB").
* As previously announced, Primegro purchased 50,1% of Longbeach from
Richway and is in the process of amending the acquisition of 50,1% ownership
from a shareholding into a 50,1% undivided share in the Longbeach property.
In terms of the Shareholders' Agreement between Richway and CGHB, the latter
had a "put" option against Richway for its 49,9% holding in the company
owning Longbeach.
Notwithstanding the late disclosure of this put, and in order to avoid the
Richway acquisition being put at risk, Primegro was obliged to accept the
put option. Primegro believes that there is benefit in having accepted the
"put" option because the terms of the "put" option are favourable to
Primegro and because of the overall benefit of the Richway acquisition to
Primegro as previously announced.
The financial effects of the transaction, after exercise of the "put"
option, would not have been materially different from those which would
result from the exclusion of the "put" option.
* The following are the material particulars of the "put" option:
- it is exercisable by CGHB between 30 April 2003 and May 2006;
- the capitalisation rate for calculating the price is the higher of
either 12,75% or 1,5% below the BoE Bank Limited 36-month fixed cost of
funding rate. As at 18 January 2002, the capitalisation rate for the
transaction would be 14,5%, resulting in a "put" option price of R75 million
as compared to R93,8 million paid to Richway. This purchase price is
considered by the board of Primegro to be commercially attractive in the
present market.
Johannesburg
30 January 2002
Investment Bank and Sponsor
Nedcor Investment Bank
Lead arranger
Nedcor Investment Bank
Attorneys
Jowell, Glyn & Marais Inc
(Registration number 1990/000849/21)
Joint reporting accountants
Deloitte & Touche
Chartered Accountants (SA)
Registered accountants and auditors
Schnaid Rubin & Co.
Chartered Accountants (S.A.)
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