| Tue 2 Apr 2002, 0:00 | | Metboard Properties Limited - Acquisition By Metpr |
|
properties from Old Mutual
METBOARD PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/005425/06)
JSE Share code: MPL
ISIN Code : ZAE000014874
("Metprol")
Acquisition by Metprol of a portfolio of properties from Old Mutual Life
Assurance Company (South Africa) Limited ("Old Mutual")
1. Introduction
Further to the cautionary announcements published in the press on Monday,
3 December 2001 and Friday, 25 January 2002, Investec Bank Limited
("Investec") is authorised to announce that, subject to the fulfilment of
the conditions precedent set out in paragraph 2.6 below, Metprol has entered
into agreements ("the acquisition agreements") in terms of which Metprol
will acquire a portfolio of 22 properties ("the properties") from Old Mutual
("the acquisition").
2. The acquisition
2.1 The properties
The acquisition comprises 22 properties which are all industrial
properties with a total lettable area of 234 492 m2 situated in Gauteng
(13), Western Cape (6) and KwaZulu-Natal (3). Pursuant to the acquisition,
the Metprol property portfolio will consist of 171 industrial properties
with a book value of approximately R1,095 billion and a total lettable area
of 1 233 718 m2.
2.2 Terms of the acquisition
In terms of the acquisition agreements, Metprol will acquire the
properties for a total purchase consideration of R199,950 million, which
will be settled as follows:
- R89,950 million by the issue of renounceable letters of allocation in
respect of 32 709 091 new Metprol linked units ("the new Metprol linked
units") at an issue price of R2,75 per new Metprol linked unit which units
are to be renounced by Old Mutual in favour of institutional and private
investors in terms of a vendor consideration placing; and
- the balance of R110,000 million in cash, which will be funded via two
loans from Investec on the following terms:
Loan 1
Amount (R' million) 55,000
Period 5 years
Interest rate 14,72% NACQ for the above period
Repayment Interest only for the above period
Loan 2
Amount (R' million) 55,000
Period 7 years
Interest rate 14,89% NACQ for the above period
Repayment Interest only for the above period
The above loans will be secured by first mortgage bonds over their
respective pro rata portion of the properties.
2.3 Vendor
The vendor is Old Mutual, a wholly-owned subsidiary of Old Mutual Plc.
2.4 Rationale for the acquisition
The board of directors of Metprol believes that the acquisition will be
beneficial to the business of Metprol as well as to Metprol linked
unitholders from a financial and operational perspective, for the following
reasons:
- the acquisition will significantly enhance the quality of the overall
property portfolio of Metprol. Since 1998 Metprol has acquired 130
properties (including the properties in respect of the acquisition), the
overall quality of which has transformed Metprol to a superior quality and
focused industrial property fund;
- Metprol will achieve enhanced critical mass from an operational
perspective and the increased size and increased market capitalisation of
Metprol pursuant to the issue of the new Metprol linked units should lead to
improved tradeability of the Metprol linked units on the JSE Securities
Exchange South Africa ("the JSE"), making it more attractive to investors;
and
- the fixed funding from Investec, the terms of which are set out in
paragraph 2.2 above, together with the fixed funding terms of a substantial
portion of Metprol's existing debt and the compounding effect of annual
escalations in the rentals receivable by Metprol in terms of the lease
agreements in place over the properties, is expected to provide long-term
benefits to Metprol linked unitholders.
2.5 Financial effects
The net asset value per Metprol linked unit at 30 September 2001 was
313,24 cents as per the published interim financial statements. The
distribution per Metprol linked unit for the six months ended 30 September
2001 was 17,52 cents. The properties have been acquired on a neutral forward
yield to March 2003.
On the assumption that the acquisition had been in effect for the six
months ended 30 September 2001, it would not have had a material effect on
the distribution per Metprol linked unit for the six months ended 30
September 2001. On the assumption that the acquisition was concluded on 30
September 2001 it would not have had a material effect on the net asset
value per Metprol linked unit at 30 September 2001.
2.6 Conditions precedent
The acquisition is subject to, inter alia, the fulfilment of the
following conditions precedent:
- obtaining the necessary regulatory approvals;
- approval in general meeting by the requisite majority of Metprol linked
unitholders of the resolution necessary to give effect to the acquisition;
and
- the Committee of the JSE granting approval for the listing of the new
Metprol linked units.
3. General meeting
A general meeting of Metprol linked unitholders will be held on or about
Wednesday, 22 May 2002 ("the Metprol general meeting") for the purpose of
considering and, if deemed fit, passing with or without modification the
resolution necessary to give effect to the acquisition.
Old Mutual Nominees (Pty) Limited held 19,2% of the Metprol linked units
in issue at 28 February 2002 and is therefore a major shareholder of Metprol
in terms of the Listings Requirements of the JSE. Old Mutual is a wholly-
owned subsidiary of Old Mutual Plc and, accordingly, in terms of the
Listings Requirements of the JSE, Old Mutual is deemed to be a related party
to Metprol. Accordingly, Old Mutual Nominees (Pty) Limited will not be taken
into account in determining a quorum at the Metprol general meeting and its
votes will not be taken into account in determining the results of the
voting at such general meeting.
4. Opinions and recommendations
The directors of Metprol have considered the terms and conditions of the
acquisition and are of the opinion that they are fair and reasonable to
Metprol linked unitholders and unanimously recommend that Metprol linked
unitholders vote in favour of the resolution to implement the acquisition,
which is to be considered at the Metprol general meeting.
The directors of Metprol intend to vote in favour of the resolution
necessary to implement the acquisition in respect of the Metprol linked
units beneficially owned by them or under their control.
5. Metprol linked unit distributions
Existing Metprol linked unitholders will receive a final distribution per
Metprol linked unit for the six months to 31 March 2002 and a first interim
distribution for the two months to 31 May 2002, which distributions will be
declared jointly at or about the end of May 2002.
The new Metprol linked units to be issued as part finance for the
acquisition as set out in paragraph 2.2 above will not qualify for the above
distributions, but will rank for all distributions declared on or after 1
June 2002.
6. Documentation
A circular, which is subject to the approval of the JSE, containing full
details of the acquisition and incorporating a notice of the Metprol general
meeting, is in the course of preparation and will be posted to Metprol
linked unitholders within 28 days of the date of this announcement.
For and on behalf of the board
Metboard Properties Limited
Johannesburg
28 March 2002
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Legal adviser
FRRW
Fluxman Rabinowitz - Raphaely Weiner Inc. Attorneys
www.frrw.co.za
Sponsor
Investec Securities Limited
Member of the JSE
(Registration number. 1972/008905/06)
