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Centrecity Property Fund - Centrecity Property Fund Announcement & Renewal
Ofcautionary Announcement
Centrecity Property Fund
("Cenprop")
Sharecode : CEN
ISIN : ZA000001335
(A Unit Trust Scheme in property shares registered in terms of the Unit Trusts
Control Act, No. 54 of 1981
("the Act"))
Managed by
PROPERTY FUND MANAGERS LIMITED
(Registration No. 1980/009531/06)
("PFM")
INFORMATION ANNOUNCEMENT TO UPDATE CENPROP UNITHOLDERS ("UNITHOLDERS") REGARDING
THE PROPOSED WINDING-UP OF CENPROP INCLUDING INFORMATION IN REGARD TO -
AN INCREASED PURCHASE PRICE TO BE PAID BY HYPROP PROPERTY INVESTMENTS LIMITED
("HYPROP") FOR THE ROSEBANK MALL AND JHI HOUSE;
OTHER OFFERS RECEIVED;
THE COURT CASE WITH CRADOCK HEIGHTS (PROPRIETARY) LIMITED ("CRADOCK HEIGHTS")
RELATING TO THE ROSEBANK MALL; AND
RENEWAL OF CAUTIONARY
Introduction
Further to the announcements in the press on 9 August 2002 and 30 September
2002, advising unitholders inter alia that various conditional transactions had
been concluded to dispose of the entire property portfolio of Cenprop and
reporting that certain other offers were being considered by the PFM Board, PFM
hereby advises unitholders of further developments regarding these transactions,
including receipt of a notice from Hyprop increasing the purchase price for the
acquisition of the Rosebank Mall and JHI House.
PFM also wishes to inform unitholders of its assessment of the implications of
the Order of Court granted to Cradock Heights, requiring demolition of part of
the Cradock Road entrance to the Rosebank Mall, and the removal of some pavement
chairs and tables ("the Cradock Heights Court Case") about which there has been
extensive media coverage which has considerably exaggerated the possible
negative effects to the Rosebank Mall.
Increased purchase price for the acquisition by Hyprop of the Rosebank Mall and
JHI House
In terms of the acquisition agreement dated 26 September 2002 ("the Hyprop
agreement") pursuant to which Hyprop purchased the Rosebank Mall and JHI House
from The Rosebank Mall (Proprietary) Limited, the Cenprop fixed property company
owning those properties ("the seller"), Hyprop reserved the right to increase
the purchase price, at its election, at any time prior to the meeting of Cenprop
unitholders referred to below. Hyprop has now notified PFM that it has increased
the purchase price from an aggregate of R304 million to an aggregate of R320
million, assuming completion of the Rosebank Mall refurbishment. The purchase
price is still to be discharged in Hyprop combined units issued at R10,25 per
combined unit, with unitholders entitled to elect to take up to 50% of the
purchase price in cash. Hyprop has notified PFM that it reserves its right in
terms of the Hyprop agreement to increase the purchase price still further,
should it so elect.
The Hyprop agreement is still subject to various suspensive conditions, namely,
a method of addressing the issues arising from the Cradock Heights Court Case to
the satisfaction of Hyprop and PFM, the obtaining of the requisite regulatory
approvals (ie the Financial Services Board, the Trustee, the JSE Securities
Exchange South Africa and the Securities Regulation Panel, to the extent
required), Cenprop and Hyprop unitholder approval, and the approval of the High
Court to the winding up of the Cenprop unit portfolio in terms of section 25(2)
of the Act. The Competition Authorities` approval has been received for the
transaction.
Following proposals by Hyprop, unitholders are further advised that negotiations
are in progress to amend the Hyprop agreement, inter alia, to provide that the
increased purchase price of R320 million should be discharged entirely in cash
or entirely in Hyprop combined units issued at R10,25 per combined unit or any
combination thereof, as unitholders may determine and that the effective date is
to be changed to 1 January 2003, to facilitate distributions to unitholders and
Hyprop unitholders. As part of such negotiations, PFM and Hyprop are seeking a
mutually satisfactory method of addressing the Craddock Heights Court Case,
which as noted above, comprises a suspensive condition to the Hyprop agreement.
The financial advisors appointed by PFM to provide the "fair and reasonable"
statement in respect of the Hyprop agreement unfortunately withdrew as a result
of a potential conflict of interest arising from Acucap`s unsolicited offers
referred to below, which has resulted in delays in the publication of the
financial effects announcement for the Hyprop agreement and the completion and
issue of the circular to unitholders. PFM has now appointed alternate financial
advisors to provide the requisite "fair and reasonable" statement.
Revised sale of 2 Long Street, Cape Town and Southway Mall, Durban to Capital
Property Fund ("Capital")
In order to facilitate distributions to Cenprop and Capital unitholders, the
effective date of the sales of 2 Long Street and Southway Mall has been amended
from 1 July 2002 to 1 January 2003. As a result, the purchase consideration for
2 Long Street has been increased from R52 million to R59 million. The purchase
consideration for Southway Mall remains unchanged at R9 million. The
consideration is still to be discharged by the issue of Capital units at an
issue price of R1,80 per unit. The suspensive conditions referred to in the
announcement published in the press on 9 August 2002 are still applicable and
are to be fulfilled by 28 February 2003.
Offers by Acucap Properties Limited ("Acucap") and Momentum Property Investments
(Proprietary) Limited ("Momentum")
As referred to in the paragraph headed "Further cautionary" in the announcement
of 30 September 2002, PFM is still in the process of evaluating certain other
offers for the Rosebank Mall and JHI House and the other properties in the
Cenprop property portfolio and in particular, a conditional offer from Acucap
for R345 million, 50% to be discharged in cash and the remainder in Acucap
linked units to be issued at R10 per linked unit for the Rosebank Mall and JHI
House with an effective date of 1 October 2002. Acucap has also indicated a
serious intention to make offers for the other properties in the Cenprop
property portfolio, to be implemented should any of the existing transactions
fail for any reason. Acucap`s offers are subject to the approval of Acucap`s
linked unitholders and regulatory approvals. Unitholders are referred to the
press announcement by Acucap published on Friday, 1 November 2002, for further
details of the Acucap offers.
The financial advisors referred to above have been instructed to investigate the
financial effects of the Acucap offers and to advise PFM accordingly. This
investigation should reveal whether any of the Acucap offers are at a premium to
the purchase price in the Hyprop agreement, or the purchase prices in respect of
the other property transactions, as intimated in the abovementioned press
announcement, particularly taking into account the increased purchase price to
be paid by Hyprop.
Momentum offered to purchase the Rosebank Mall and JHI House for R320 million,
payable in cash on transfer. This offer has expired. However, Momentum has
continued to express interest in the properties and unitholders will be informed
should Momentum submit a further offer which PFM believes should be drawn to the
attention of unitholders.
Further announcements and circular to unitholders
Any significant amendments to the Hyprop agreement arising out of the
negotiations referred to above, any further relevant details regarding the
Acucap offers and any other significant offers which may be received will be
dealt with, to the extent appropriate, in further announcements to unitholders
and the circular to unitholders which it is now anticipated will be issued
during December 2002.
The Cradock Heights Court Case
Unitholders are notified that PFM intends to take the Cradock Heights Court Case
on appeal. If the appeal is unsuccessful and the provisions of the Court Order
are implemented, PFM estimates that the costs of demolition will be in the order
of R600 000,00. PFM is of the view that potential claims from tenants will not
be significant.
Further cautionary
Unitholders are accordingly advised to continue to exercise caution in dealing
with their units until the further announcement is made.
Johannesburg
4 November 2002
Corporate Law Advisers and Consultants Sponsor
EDWARD NATHAN & FRIEDLAND SASFIN BANK LIMITED
(PROPRIETARY) LIMITED
Date: 04/11/2002 05:39:05 PM Produced by the JSE SENS Department
