| Thu 8 Aug 2002, 0:00 | | Hyprop/capital/cenprop/apexhi - Detailed Cautionar |
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HYPROP/CAPITAL/CENPROP/APEXHI - DETAILED CAUTIONARY
Hyprop Investments Centrecity Property Fund ApexHi Properties
Limited ("Cenprop") Limited
(Registration (Share Code - CEN) (Registration
No.1987/005284/06) (ISIN Number - ZAE000001335) No.1999/000238/06)
("Hyprop") Capital Property Fund ("ApexHi")
("Capital")
(Share Code: CPL)
(ISIN Number:ZAE000001731)
Share Code HYP (Unit trust funds established in Share Code APA
ISIN ZAE00003430 terms of the Unit Trusts Control ISIN ZAE000033064
Act, No. 54 of 1981 ("the Act")) Share Code APB
Managed by Property Fund Managers ISIN ZAE000033072
Limited (Registration No.
1980/09531/06) ("PFM")
JOINT DETAILED CAUTIONARY ANNOUNCEMENT RELATING TO THE PROPOSED WINDING UP OF
THE CENPROP UNIT PORTFOLIO, THE DISPOSAL OF CENPROP`S PROPERTIES TO HYPROP,
CAPITAL AND APEXHI AND RENEWAL OF CAUTIONARY
Introduction
Further to the cautionary announcements published in respect of Hyprop and
Cenprop on 11 April 2002, 28 May 2002 and 4 July 2002 and in respect of Capital
on 22 May 2002 and 11 July 2002, Corpcapital Corporate Finance is authorised to
announce that, subject to the suspensive conditions set out below, PFM:
- has resolved to implement a process pursuant to which the Cenprop unit
portfolio will be wound up in terms of section 25(2) of the Act ("the
winding up");
- has concluded agreements with Hyprop and ApexHi and between Capital and
Cenprop to dispose of Cenprop`s properties or the shares in its property
owning subsidiaries, save for the property known as Andersen Park ("the
disposals"); and
- are in the process of negotiating with various parties in relation to the
disposal of Andersen Park,
(collectively "the transactions").
The winding up
PFM has resolved to wind up the Cenprop unit portfolio in terms of section 25(2)
of the Act and to make application to the High Court of South Africa ("the High
Court") for the requisite approval. Pursuant to the winding up PFM will dispose
of all of Cenprop`s properties or the shares in its property owning subsidiaries
and distribute the proceeds from the disposals (less any costs relating to the
transactions) to its unit holders.
The disposal to Hyprop
Hyprop has agreed to acquire the Rosebank Mall and JHI House from Cenprop with
effect from the effective date which will be 1 October 2002 for an aggregate
purchase price of between R273 323 459 and R304 000 000, payable by the issue of
Hyprop combined units at R10,25 per combined unit with a cash alternative in
respect of 50% of the consideration as set out below. The final purchase price
will depend upon the capital expenditure still required to complete the
refurbishment of Rosebank Mall on the transfer date.
Cenprop unit holders will have an election to receive cash instead of Hyprop
combined units, provided that the cash portion of the purchase price will not
exceed 50% of the total purchase price. The final proportion of combined units
to cash will depend upon the election made by Cenprop unit holders.
The disposal to Capital
Capital has agreed to acquire the shares in Garforres Investments (Proprietary)
Limited and Titren Road Properties (Proprietary) Limited which own the
properties known as 2 Long Street and Southway Mall respectively from Cenprop
with effect from 1 July 2002 for an aggregate purchase price of R61 000 000
payable by the issue of Capital units issued at a price to be determined on the
issue date in accordance with the relevant provisions of the Act and the Capital
trust deed.
The disposal to ApexHi
ApexHi has agreed to acquire the properties known as Innes Chambers and the NBS
Building with effect from the date on which the properties are transferred into
the name of ApexHi for an aggregate purchase price of R18 000 000, R6 300 015 of
which will be paid in cash and R11 699 985 by the issue of 1 017 390 ApexHi "A"
and 1 017 390 ApexHi "B" linked units.
Rationale for the transactions
Over time the Cenprop property portfolio which consists predominantly of a high
quality shopping centre and adjacent office block along with medium to high
yielding properties has become unbalanced. In addition, in relation to other
listed property companies, Cenprop`s low market capitalization has adversely
affected its liquidity.
The winding up will result in Cenprop unit holders having the opportunity to
remain indirectly invested in the Rosebank Mall, JHI House, 2 Long Street and
Southway Mall through the distribution of the Hyprop combined units and Capital
units. The receipt of the Hyprop and Capital units will provide Cenprop unit
holders with more focused and tradable investments. To the extent that Cenprop
unit holders receive, or elect to receive, a cash distribution they will be able
to retain or reinvest this money.
For Hyprop, the acquisition of the Rosebank Mall and JHI House will further
enhance the quality and diversification of its portfolio of prime retail and
office property investments.
For Capital the acquisition of 2 Long Street and Southway Mall will improve the
quality of the its portfolio and the distribution of the Capital units to
Cenprop unit holders will increase the liquidity of the fund. This forms part of
an aggressive strategy that has been formulated in terms of which Capital`s
portfolio of properties will be expanded with the objective of creating a fund
focused on reasonable quality office, retail and industrial properties located
in high demand areas.
The ApexHi disposal provides ApexHi with an opportunity to acquire high yielding
properties to supplement its existing portfolio.
Hyprop`s borrowings
Depending upon the purchase price payable in terms of the Hyprop disposal and
the extent to which the purchase consideration comprises cash, Hyprop may
require additional borrowings of up to R152 000 000, which together with
Hyprop`s available facilities of R211 000 000 will equate to 29% of the open
market valuation of Hyprop`s property portfolio.
Suspensive conditions
The winding up, the disposal to Hyprop and the disposal to Capital are subject
to the fulfilment of the following suspensive conditions:
- the conclusion of written agreements containing the terms and conditions
above and other terms, conditions and warranties as are usual for
agreements of this nature which in the event of a dispute in regard to such
provisions will be referred to a senior corporate attorney at Webber
Wentzel Bowens for determination;
- the approval of the Cenprop unit holders;
- the approval of the Capital unit holders;
- the requisite approval of the Hyprop combined unit holders (in respect of
the disposal to Hyprop);
- all requisite regulatory approvals including to the extent necessary, the
approval of the JSE Securities Exchange South Africa ("the JSE"), the
Registrar of Unit Trust Companies, the Securities Regulation Panel ("the
SRP") and the Competition Authorities;
- the approval of the Trustee of Cenprop and Capital, ABSA Bank Limited;
- the High Court granting an order for the winding up of the Cenprop unit
portfolio in terms of section 25(2) of the Act; and
- an agreement being concluded for the disposal of Andersen Park,
by no later than 31 October 2002, save for the winding up order and the approval
of the Competition Authorities which must be obtained by no later than
30 November 2002, (or such later dates as Hyprop and Cenprop may agree) failing
which they will be of no force and effect.
The disposal to ApexHi is subject to the fulfilment of the following suspensive
conditions:
- the securing of finance in respect of the cash portion of the purchase
price of the properties in question;
- the securing of a lease over a portion of NBS building with a government
department for a minimum period of one year on terms and conditions
satisfactory to ApexHi;
- all requisite regulatory approvals including to the extent necessary, the
approval of the JSE, the Registrar of Unit Trust Companies and the SRP;
- the High Court granting an order for the winding up of the Cenprop unit
portfolio in terms of section 25(2) of the Act; and
- the approval of the Trustee of Cenprop, ABSA Bank Limited,
by no later than 30 November 2002 (or such later date as may be agreed between
ApexHi and Cenprop) failing which it will be of no force and effect.
Further announcement
A further announcement containing details of the disposal and the winding-up,
including financial effects and salient dates and times will be published as
soon as possible. In the interim Cenprop unit holders, Hyprop combined unit
holders and Capital unit holders are advised to continue exercising caution when
dealing in the securities of the companies concerned.
Johannesburg
9 August 2002
Corporate advisors to Sponsor to Cenprop and Trustee to Cenprop and
Hyprop, Cenprop, Capital Capital Capital
and ApexHi
Corpcapital Corporate Sasfin Bank Limited ABSA Bank Limited
Finance
Sponsor to Hyprop and Joint corporate law Corporate law advisors
ApexHi advisors and to Hyprop and ApexHi
Corpcapital Corporate consultants to Capital Corpcapital Transaction
Finance and Cenprop Support
ENF (Pty) Ltd and
Corpcapital Transaction
Support
Date: 08/08/2002 05:49:23 PM Produced by the JSE SENS Department
