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Paraprop - ANNOUNCEMENT REGARDING THE ACQUISTION OF NEW PROPERTIES
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA
ISIN: ZAE000028577
("Paraprop")
ANNOUNCEMENT REGARDING THE ACQUISTION OF NEW PROPERTIES
1. Introduction
Linked unit holders are advised that, Paraprop has entered into agreements to
acquire La Rocca Units A and D (situated in Bryanston, Johannesburg) from Stand
4587 La Rocca (Proprietary) Limited and Morningside Close Office Park Units 1, 2
and 3 (situated in Morningside, Johannesburg) from Greveridge Investments
(Proprietary) Limited ("the acquisitions" or "the properties") with effect from
1 September 2003.
2. Rationale for the acquisitions
This acquisition is in terms of growing the fund in order to improve its capital
structure and diversify its portfolio by acquiring good properties in well-
located areas.
3. Consideration for the acquisitions
The consideration for the purchase of the properties is as follows:
Property Total Cash Value to be
consideration portion settled
R"000 R"000 through the
(1) issue of
new
Paraprop
linked
units (2)
R"000
La Rocca Unit A 8 250 4 950 3 300
La Rocca Unit D 7 300 4 380 2 920
Morningside Close 8 600 5 160 3 440
Office Park, Unit
1
Morningside Close 7 000 4 200 2 800
Office Park, Unit
2
Morningside Close 7 400 4 440 2 960
Office Park, Unit
3
Total 38 550 23 130 15 420
Notes
1) To be funded through debt.
2) The shares will be issued at 342,8 cents, being the
30-calendar day weighted average traded price of
Paraprop immediately preceding 1 September 2003, on
the transfer date of the properties.
4. Financial effects of the acquisitions
Based on the unaudited results of Paraprop for the 6 months ended 30 April
2003, the pro forma financial effects of the acquisitions on Paraprop"s earnings
per linked unit, headline earnings per linked unit, distribution per linked
unit, net asset value per linked unit and borrowings ratio are set out below.
This pro forma financial information has been prepared for illustrative purposes
only and because of its nature may not give a true picture of Paraprop"s
financial position and results of operations, nor the effect and impact of the
acquistions on Paraprop going forward.
Before the After the % Change
acquisitions(1) acquisitions(2)
Earnings per linked unit 24.1 24.6 2.1
(cents)
Headline earnings per 24.1 24.7 2.5
linked unit (cents)
Distribution per linked 24.0 24.7 2.9
unit holder (cents)
Net asset value per 480.8 464.7 (3.3)
linked unit (cents)
Borrowings: total fixed 64% 64% -
assets
Linked units in issue 34 042 706 38 540 956 13.2
Weighted average linked 34 042 706 38 540 956 13.2
units in issue
Notes
1) Based on the published consolidated unaudited results of Paraprop for the 6
months ended 30 April 2003;
2) Based on the assumption that the acquisitions have been completed, and the
transfer of the five properties has taken place;
3) Based on the assumption that the consideration linked units were issued on 1
November 2002. Earnings and headline earnings have been adjusted to include the
income attributable to the new properties for the 6-month period November 2003
to April 2004. Forecast earnings have been used as several of the properties
were under construction during the comparative historical periods. These
earnings have been reviewed by Paraprop"s auditors, Deloitte and Touche and
their forecast review opinion is available for inspection at Paraprop"s
registered offices. Earnings and headline earnings have also been adjusted to
take into the interest expense, calculated at rates relevant to the period under
review, to be incurred on the debt finance relating to the properties.
4) Based on the assumption that all net income after financing expenses be
distributed to linked unit holders. The adjustments to earnings and headline
earnings per linked unit as noted in 3) above, were also made in arriving at
this amount; and
5) Based on the assumption that the properties were transferred and the
consideration relating to the properties, settled on 30 April 2003;
5. Conditions precedent of the acquisitions
All conditions precedent of the transactions have been fulfilled.
6. Categorisation of the acquisitions
The acquisition of the properties from Greveridge and La Rocca have been
categorised as category 3 transactions respectively in terms of section 9.5 (a)
of the JSE Listings Requirements.
Cape Town
15 September 2003
Investment bank and Fund and property
sponsor managers
Nedbank Corporate Spire Property
Services (Pty) Ltd
Date: 15/09/2003 02:41:09 PM
Produced by the JSE SENS Department
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