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Samrand - Acquisition Announcement
SAMRAND DEVELOPMENT HOLDINGS LIMITED
(Registration number 1971/003132/06)
Share code: SMR ISIN code: ZAE000010419
("SAMRAND")
ACQUISITION ANNOUNCEMENT
Introduction
Shareholders are referred to Samrand`s audited financial results announcement
where it was announced that Samrand had acquired the remaining 50% of Samstocks
(Proprietary) Limited and its respective subsidiaries ("Samstocks") .The
consideration of R2.0 million was settled in cash, on 16 November 2001, from
internally generated funds in Samrand.
The sellers were Xtraprops 198 (Proprietary) Limited (Xtraprops) and Stocks &
Stocks Construction Holdings (Proprietary) Limited (in liquidation) (S&S).
The effective date of the acquisition was 1 May 2001.
Nature of the business of Samstocks
Samstocks was incorporated on 18 April 1989 as a joint venture company between
Samrand, Xtraprops and S&S.
It is an investment vehicle primarily holding several properties, for medium and
long-term leases, strategically situated in Pretoria, Cape Town, Durban, Port
Elizabeth and Sun City. The property portfolio consisting mainly of retail and
office premises, currently commands an average gross yield of 24.5%, on a total
lettable area of 50 562 square metres, valued conservatively at R138.5 million.
Rationale for the acquisition
In order to protect Samrand`s 50% investment in Samstocks, and ensure that there
would be an orderly liquidation of all of Samstocks` debt, Samrand elected to
acquire the balance of Samstocks.
This process would ensure that all properties were properly maintained, tenancy
levels optimised and that the long-term financial arrangements could be re-
negotiated to be more favourable to Samstocks.
Financial effects
The following table reflects the proforma effects on the published audited
annual financial statements of Samrand for the year ended 31 March 2002 had the
acquisition not been implemented:
AUDITED1 PROFORMA2 CHANGE3
cents cents %
EARNINGS PER SHARE 0.8 1.7 (52.9)
HEADLINE EARNINGS PER 0.8 1.7 (52.9)
SHARE
NET ASSET VALUE PER 126.1 127.0 (0.7)
SHARE
TANGIBLE NET ASSET VALUE 126.1 127.0 (0.7)
PER SHARE
Note:
1. The figures in the "audited" column are extracted from the published audited
results of Samrand for the year ended 31 March 2002.
2. The figures in the "proforma" column reflect the position as at and for the
year ended 31 March 2002 on the assumption that Samrand did not make the
acquisition.
3. The figures in the "change" column compare the "audited" column with the
"proforma" column.
Prospects
A leading property management company has been appointed as property managers
for the entire property portfolio of Samstocks. Each property is managed as a
separate business unit with detailed budgets and financial reports available for
inspection.
The current tenancy levels and the gross yields being achieved in the various
properties, offer continuous cash surpluses on nett rentals [gross rentals less
operating expenses] and such cash in-flows are applied directly in the reduction
of debt advanced by the various financiers to Samstocks.
Wherever it would be more advantageous to reduce debt exposure and financing
charges, consideration will be given to the disposal of any specific property,
provided that such a disposal would offer greater returns to Samstocks than
managing such a property in the longer term.
Johannesburg
17 July 2002
SPONSOR
SASFIN BANK LIMITED
Date: 17/07/2002 03:44:49 PM Produced by the JSE SENS Department
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