| Tue 28 Jan 2003, 11:26 | | Redefine - Issue Of Linked Units In Redefine For C |
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Redefine Income Fund Limited
(Registration No. 1999/018591/06)
Share Code: RDF
ISIN Code: ZAE000023503
("Redefine" or "the company")
ISSUE OF LINKED UNITS IN REDEFINE FOR CASH
Introduction
Corpcapital Corporate Finance is authorised to announce that Redefine has, in
terms of the general authority granted to the Redefine board of directors,
issued 54 688 304 Redefine linked units ("issued units") for cash at a price of
R2,50 per linked unit, thereby raising R136 720 760 ("issue for cash").
The market demand for Redefine linked units has resulted in the overwhelming
success of the issue for cash.
The issued units were listed on the JSE Securities Exchange South Africa with
effect from Monday, 27 January 2003.
Rationale
The issue for cash will result in the following benefits:
- the reduction of long term debt, which had recently increased pursuant to the
acquisition of the Rand Leases Properties Limited ("Rand Leases") property
portfolio effective from 1 November 2002;
- the repayment of the bank overdraft;
- an increase in the market capitalisation of Redefine and the resultant
improvement in the liquidity of its linked units;
- an improvement in the net asset value of the company; and
- the increase in the spread of unitholders as a result of the subscription for
issued units by unitholders ranging from large institutions to individuals.
Redefine`s borrowings
The issue for cash will reduce Redefine`s borrowing levels (inclusive of the
acquisition of the Rand Leases property portfolio) from 59% to approximately
55,7% of gross assets, amounting to R 1,3 billion of borrowings.
Financial effects
The financial effects of the issue for cash on earnings, headline earnings and
net asset value per linked unit are set out below:
Pro forma Pro forma
before the after the
issue for issue for Change
cash cash %
(Cents) (Cents)
Historical earnings 8,52 (1) 12,49 (2) 46,60
Historical headline 37,07(1) 36,36 (3) (1,92)
earnings
Historical net asset value
including unpaid 244,00 (1) 245,38 (4) 0,57
distributions
Whilst the issue for cash is enhancing to both historical earnings and
historical net asset value per Redefine linked unit, the historical headline
earnings are minimally dilutionary. This results from the low interest rate
environment prevailing during the period from September 2001 to April 2002.
Current interest rate levels would have resulted in non-dilutionary headline
earnings.
(1) The historical earnings and headline earnings per Redefine linked unit as
set out in the "before issue for cash" column of the table, are based on
Redefine`s audited results for the year ended 31 August 2002. The historical net
asset value including unpaid distributions per Redefine linked unit as set out
in the "before issue for cash" column of the table is based on Redefine`s
audited balance sheet at 31 August 2002, in which the existing property
portfolio is stated at fair value.
(2) The historical earnings per Redefine linked unit as set out in the "after
issue for cash" column of the table, is based on the assumption that the issued
units were allotted on 1 September 2001. The interest saving is based on actual
monthly interest rates incurred on the overdraft and long-term borrowings. It
was further assumed that the proceeds were first utilised to settle the
overdraft and thereafter long-term liabilities. A weighted average of
333 784 000 linked units were assumed to be in issue for the entire financial
year.
(3) The historical headline earnings per Redefine linked unit as set out in the
"after issue for cash" column of the table, has been calculated in the manner
described for the historical earnings per Redefine linked unit but excludes the
"fair value" adjustment for the capital depreciation of the properties and
listed linked unit portfolio.
(4) The historical net asset value including unpaid distributions per Redefine
linked unit as set out in the "after issue for cash" column of the table, is
based on the assumption that the issued units were allotted on 1 September 2001
and the proceeds were first utilised to settle the overdraft and thereafter long
term liabilities. 375 756 000 linked units were assumed to be in issue for the
entire financial year.
Corporate Advisor and Sponsor Sole Placement House
Corpcapital Corporate Finance
(a sponsor registered with the BOE Personal Stockbrokers
JSE Securities Exchange South
Africa)
Date: 28/01/2003 11:17:26 AM Produced by the JSE SENS Department
