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Fairvest Property Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/005011/06)
Share code FVT IN ZAE000034658
("Fairvest" or "the Company")
ANNOUNCEMENT REGARDING:
THE FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION
1. Introduction and Financial Effects of the Proposed Acquisition
LPC Manhattan Sponsors (Pty) Ltd is authorised to announce that, further to the
announcements dated 12 November 2002 and 10 December 2002 concerning the
proposed indirect acquisition of a portfolio of properties with a value of R420
million, which value has subsequently been adjusted to about R385 million ("the
acquisition"), the financial effects of the proposed acquisition are as follows:
Actual Pro forma % change
Before After -
(Cents) (Historical)
(See Comment
below)
Earnings per linked
unit 13.2 3.0 (77.2)
Headline earnings per
linked unit 9.1 8.3 (8.1)
Net asset value per
linked unit 119.5 117.5 (1.7)
Tangible net asset
value per linked unit 116.3 115.1 (1.0)
Number of linked units
in issue 98 263 654 132 808 217 +35.2
Notes:
a. These financial effects have not been reviewed by the company`s auditors.
The full finacial effects will be the subject of an accountants` report to be
contained in the circular to shareholders referred to in paragraph 3. below.
b. The figures in the "before" column are extracted from the reviewed annual
results of Fairvest for the year ended 30 September 2002.
c. Earnings per linked unit in the "after" column have been arrived at by
aggregating the earnings for the most recent reporting period of the properties
or companies to be acquired and adding these to the "before" earnings. Where
these reporting periods were not full years, the results have been grossed up
34 545 663 linked units are to be issued to the vendors of the acquisitions in
part settlement of the purchase considerations, resulting in a total weighted
average of 132 808 217 linked units in issue.
Net asset value and tangible net asset value per linked unit has been arrived at
after taking into account the issue of 34 545 663 linked units at R1,50 each,
estimated transaction costs of R3,5 million and a fair value adjustment, writing
down investment properties by R13 212 850.
The effect on fully diluted earnings has not yet been calculated but will be
included in the circular to shareholders.
2. Comment
There are two factors leading to an understatement of the benefit to the company
of this acquisition:
* the financial effects have been compiled on the basis of the historical actual
net rental amounts recorded and not on the net rental to be received in the 12
month period following this acquisition; and
* in three instances, namely the Graydon, Rentmeester and Mostert portfolios,
the properties were historically not fully rent producing. This is no longer
the case. In these instances, the rental to be received during the twelve
months from the effective date should reflect the increased rentals achieved.
These factors result in the earnings shown above not properly reflecting the
basis on which the acquisitions have been made.
3. Circular
A detailed circular regarding the acquisition and incorporating a notice of
general meeting will be posted to shareholders in due course.
Wierda Valley
13 February 2003
Sponsor Attorneys
LPC Manhattan Moss Morris
Date: 14/02/2003 11:03:10 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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