| Wed 8 May 2002, 0:00 | | Revised Terms Announcement Regarding The Disposal |
|
its investment property portfolio
iProp Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1968/001239/06)
Share code: IPR ISIN: ZAE 000018867
("iProp" or "the company")
Revised terms announcement regarding the disposal by iProp of a portion of
its investment property portfolio
1. Introduction
Further to the iProp terms announcement dated 14 December 2001, and the
cautionary announcement dated 5 March 2002, the company wishes to announce
that as a result of a variety of factors, the terms of the transaction
relating to the disposal by iProp of a portion of its property portfolio,
the rationalisation of the iProp group of companies and unbundling of linked
units to its shareholders as detailed in the press on 14 December 2001, have
been amended, as set out below.
2. Amendments to the original proposals
2.1 Acquisition
The property portfolio owned by Onaghan Investments (No. 2) (Proprietary)
Limited will no longer be acquired by iProp and will not form part of the
investment properties disposed of in terms of the disposal referred to in
2.2 below.
2.2 The disposal
It remains the intention of iProp, through its subsidiaries, iProp Limited
and Lerix Investments (Pty) Ltd, to dispose of a portion of its property
portfolio (including any businesses carried on in respect thereof) to iFour
S.A. (Pty) Ltd and its rights and obligations in and to certain share-block
owned properties to iFour Two (Pty) Ltd, both wholly owned subsidiaries of
iFour Properties Limited ("iFour") ("disposal"). The purchase consideration
payable in respect of such disposal has, as a result of the non-acquisition
of the property portfolio referred to in paragraph 2.1 above, been reduced
from R246 300 000 to R206 575 105. Such consideration ("disposal
consideration") will be settled by the issue of renounceable letters of
allocation ("RLA's"), which will entitle iProp (or its renouncee) to 31 167
133 linked units in iFour ("linked units"), and the payment of R50 739 440
in cash. In addition, in order to achieve certain rates of return for
investors in iFour and to facilitate the successful listing of iFour on the
JSE Securities Exchange South Africa ("JSE"), iProp has agreed that of the
31 167 133 linked units to be allocated to it, RLA's in respect of 25 167
133 linked units will be issued to it prior to the listing of iFour on the
JSE and the balance of 6 000 000 linked units will be issued on 15 March
2004 ("deferred linked units").
2.3 Rationalisation, unbundling and distribution
The rationalisation and unbundling set out in the terms announcement dated
14 December 2001 in the manner contemplated is no longer applicable.
It is now proposed that, in order to return value to iProp shareholders, up
to 7 697 667 linked units received pursuant to the disposal will be
distributed to iProp shareholders on the basis of 46 linked units for every
100 iProp shares held by iProp shareholders on the record date of such
distribution ("distribution").
Such distribution will be effected by means of a distribution in specie, by
way of, inter alia, a reduction of the company's share premium in terms of
section 90 of the Companies Act, 61 of 1973 (as amended) ("the Act") and
will necessitate certain amendments having to be made to the articles of
association of iProp.
2.4 Effect of disposal and distribution
The disposal consideration will be applied to settle the liabilities related
to the properties disposed of, the costs incurred in respect of the disposal
and as security for liabilities of iProp in relation to bond facilities on
investment properties retained. In addition, up to 7 697 667 linked units
will be distributed to shareholders pursuant to the distribution whilst the
deferred linked units will be available for distribution to shareholders
following their issue on 15 March 2004.
As a consequence of the disposal iProp will operate essentially as a land
development company.
2.5 iProp put option
In order to raise the funds necessary to liquidate its indebtedness to
certain mortgage bond holders as a consequence of the disposal, iProp
intends, prior to the listing of iFour to dispose of a portion of the linked
units issued to it to one or more third parties. In addition, iProp has
secured the right to require Standard Bank Properties Limited to acquire up
to 14 million linked units. The above transactions are subject to
shareholder approval.
3. Conditions Precedent
The amended proposals are subject to the fulfilment or waiver of certain
conditions precedent. At the date of this revised terms announcement certain
conditions had already been fulfilled or waived. The outstanding conditions
precedent are:
3.1 the approval of all required regulatory bodies;
3.2 the JSE approving the listing of the linked units of iFour in the "Real
Estate - Property Loan Stock" sector of the JSE list;
3.3 approval by iProp shareholders of the payments to directors which
constitute payments in terms of section 227 of the Act;
3.4 the approval by iProp shareholders in general meeting of the disposal
including any related agreements and such agreements becoming unconditional
in accordance with their terms; and
3.5 the registration of any special resolutions, passed at the general
meeting, by the Registrar of Companies.
4. Financial Effects
Set out below are the unaudited pro forma financial effects of iProp after
the amended proposals, which are provided for illustrative purposes only to
show the financial effect of the amended proposals on iProp.
Pro forma Increase/ Pro forma Increase/
Audited after the (decrease) after the (decrease)
Before(1) disposal % distribution %
Shares in
issue ('000) 15 677 15 677 15 677
Shares in issue
(including
options) ('000) 16 911 16 911 16 911
Net asset value
per share (cents) 1 127 1 291(4) 15 1 063(4) (6)
Net tangible
asset value
per share (cents) 1 108 1 272(4) 15 1 045(4) (6)
Earnings per
share (cents)
Basic 107 272(3) 154 246(3) 130
Fully diluted 99(2) 252(2,3) 154 228(2,3) 130
Headline earnings
per share (cents)
Basic 105 85(3) (19) 59(3) (44)
Fully diluted 97(2) 78(2,3) (19) 54(2,3) (44)
Notes:
1. Extracted from the audited financial statements of iProp for the year
ended 30 September 2001.
2. For diluted earnings per share, net asset value and net tangible asset
value per share, the number of ordinary shares in issue is adjusted by 1 234
200 shares which assumes all share options granted to employees are
exercised.
3. The effect on earnings and headline earnings per share is based on the
following assumptions:
- the transaction was effective 1 October 2000;
- certain financing structures related to the investment properties were
unwound with effect from 1 October 2000;
- sufficient iFour linked units were sold at face value and the proceeds
were utilised to redeem certain interest bearing liabilities relating to the
investment properties;
- earnings relating to the linked units retained or available for
distribution, calculated based on the net anticipated forward yield on iFour
linked units as set out in the iFour prospectus. This does not represent a
profit forecast of iFour or iProp earnings. No earnings are included on the
6 million iFour linked units, deferred in terms of the disposal agreements;
and
- shareholders should be aware that earnings attributable to linked units
distributed will be earned directly by the linked unit holders.
4. The effect on net asset and net tangible asset value per share is based
on the following assumptions:
- the transaction was effective 30 September 2001;
- certain financing structures related to the investment properties were
unwound with effect 30 September 2001;
- sufficient iFour linked units were sold at face value and the proceeds
together with the cash proceeds were utilised to redeem certain interest
bearing liabilities relating to the investment properties;
- for purposes of calculating pro forma net asset value and net tangible
asset value after the disposal, linked units not sold are carried at face
value;
- for purposes of calculating pro forma net asset value and net tangible
asset value after the transaction, the balance of the linked units not
distributed are carried at face value;
- shareholders in iProp receive 46 iFour linked units at an issue price of
R5,00 per linked unit for every 100 iProp shares held; and
- the distribution is based on the adjusted number of ordinary shares in
issue as set out in note 2 above.
5. The financial effects on iProp shareholders equates to the pro forma
"After the disposal" column.
5. Salient Dates and Times 2002
Circular posted to iProp members on Thursday, 9 May
Last day for lodging forms of proxy for the general
meeting of iProp shareholders by 09:00 on Wednesday, 29 May
General meeting of iProp members to be held at 09:00 on Friday, 31 May
Results of the general meeting released on SENS and
published on Friday, 31 May
Last day to trade to participate in the distribution
of the linked units at close of business on Friday, 7 June
Listing of iFour linked units on Monday, 10 June
Record date to participate in the distribution of the
linked units at close of business on Friday, 14 June
Distribution of the linked units takes effect on Tuesday, 18 June
Certificates in respect of distribution of the
linked units posted on Tuesday, 18 June
Notes:
1. The above dates and times are subject to amendment. Any amendment to the
above dates and times will be published in the press.
2. Linked unit holders in iFour may not sell their linked units unless they
have been dematerialised.
3. iProp certificates may not be dematerialised and/or rematerialised
between Monday, 3 June 2002 and Friday, 14 June 2002, both days inclusive.
4. Notwithstanding that iFour is on STRATE, current legislation does not
allow for the distribution linked units to be distributed in dematerialised
form. Certificates will therefore be posted to iProp shareholders on the
distribution date and linked unitholders will then have to dematerialise
those certificates in order to trade the distribution linked units on the
JSE. The dematerialisation process can take between 24 hours and 10 days
depending on the volumes being processed by STRATE at the time.
6. Documentation and notices of general meeting
Circulars, giving details of the amended proposals and the listing
particulars of iFour, and containing a notice of a general meeting of the
iProp shareholders have been approved by the JSE and SRP and will be posted
to iProp shareholders on Thursday, 9 May 2002. The general meeting of iProp
shareholders will take place on 31 May 2002 as detailed in the circular to
shareholders.
Johannesburg
9 May 2002
Corporate Advisor
Mettle Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/010795/06)
(formerly Greenwich Group Limited)
("Mettle' or "the Company")
Attorneys
Prinsloo, Tindle & Andropoulos Inc.
Attorneys
Sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Reporting accountants
PricewaterhouseCoopers
Chartered Accountants (SA)
Registered Accountants and Auditors
(Registration no. 1998/012055/21)
