| Tue 18 Nov 2003, 8:58 | | TERMS OF THE CLAWBACK-OFFER, DISPOSAL OF VOORTREKK |
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Arnold Property Fund Limited - Terms Of The Clawback-Offer, Disposal Of
Voortrekker Centre And Withdrawal Of Cautionary Announcement
Arnold Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/011887/06)
Share code: ARP ISIN: ZAE000031720
("A-Prop")
1. Introduction
Linked unitholders are advised that, subject to the conditions precedent set
out below, the board of directors of A-Prop has resolved to proceed with a
claw-back offer to A-Prop linked unitholders (the "claw-back offer") and to
dispose of the property letting business of the Voortrekker Centre ("the
disposal"), as further described below.
2. Terms of the claw-back offer
A-Prop will raise R30 000 000 through the subscription by Redefine Income
Fund Limited ("Redefine") and Spearhead Property Holdings Limited
("Spearhead") (collectively "the proposers"), in the ratio of 70:30
respectively, for new A-Prop linked units ("new A-Prop linked units") at 50
cents per A-Prop linked unit.
In terms of the claw-back offer, A-Prop linked unitholders or their
renouncees will have the right to "claw-back" the new A-Prop linked units from
the proposers by acquiring their pro rata portion of the new A-Prop linked
units at 50 cents per A-Prop linked unit plus an amount calculated by applying
JIBAR plus 0,5% calculated from the date the R30 000 000 is advanced to the
date of acceptance of the claw-back offer by the A-Prop linked unitholder (the
"subscription price"). By way of dematerialised letters of allocation, A-Prop
linked unitholders may accept, renounce or sell their rights to their pro rata
entitlement of the new A-Prop linked units. The ratio per linked unit will be
announced on 16 December 2003.
A-Prop will pay the proposers interest in order to compensate them for the
time value of money in respect of the period from the date the R30 000 000 is
advanced to the closing date of the claw-back offer at JIBAR plus 0,5%.
The proceeds of the claw-back offer will be utilised to:
pay half the cost (amounting to approximately R13 500 000) of the unwind of
the existing interest rate hedges on A-Prop"s loan facilities. The balance of
the unwind costs will be capitalised to the new loan facilities with A-Prop"s
bankers, as further described below;
fund half of the outstanding vendor liabilities of approximately R7 900 000,
with the remainder payable on 30 June 2004 on an interest free basis;
meet the outstanding distribution plus interest to linked unitholders for
the period ended 30 June 2003. The dates of the distribution will be announced
shortly after the last of the conditions precedent is fulfilled or waived; and
meet A-Prop"s existing commitments and future working capital requirements.
Once the claw-back offer has closed, an amount equivalent to the subscription
price of those new A-Prop linked units subscribed and paid for by linked
unitholders (other than the proposers) or their renouncees under the claw-back
offer will be paid to A-Prop. The balance of the new A-Prop linked units not
subscribed and paid for by linked unitholders or their renouncees will be
allotted and issued to the proposers.
The new A-Prop linked units to be issued in terms of the claw-back offer,
will rank pari passu with the A-Prop linked units currently in issue.
The claw-back offer is conditional upon:
the JSE Securities Exchange South Africa ("JSE") approving the claw-back
offer documents and granting the required listing of letters of allocation and
new A-Prop linked units;
the Registrar of Companies registering the claw-back offer documents;
the securing, to the extent necessary, of the approval of Webber Wentzel
Bowens (in its capacity as trustee for A-Prop debentureholders) to the
conclusion and implementation of the claw-back offer; and
the securing of a ruling from the Securities Regulation Panel ("SRP") on
Takeovers and Mergers to the effect that the acquisition by Redefine of new A-
Prop linked units pursuant to the claw-back offer will not trigger a mandatory
offer under the Rules of the Securities Regulation Code on Takeovers and
Mergers should Redefine"s unitholding in A-Prop exceed 35% of A-Prop"s unit
capital (the "SRP ruling"),
to be fulfilled or waived by no later than 28 February 2004, or such later
date agreed by A-Prop, or the claw-back offer will be of no force and effect.
3. SRP ruling
The SRP has confirmed to A-Prop that, subject to any representations which
may be made to the SRP by A-Prop unitholders before 16:00 on 21 November 2003,
the SRP will make the SRP ruling in favour of the proposers.
A-Prop linked unitholders wishing to make representations to the SRP in
respect of the proposed SRP ruling should do so by no later than 16:00 on 21
November 2003 to the SRP (Attention: Richard Connellan) on (011) 482 5630
(telephone), (011) 482 5635 (fax) or by way of written submissions addressed
to Richard Connellan, Securities Regulation Panel, 2 Sherborne Road, Parktown,
2196.
4. The disposal
With effect from 24 October 2003, A-Prop has unconditionally disposed of the
Voortrekker Centre in Mokopane for a gross cash consideration of R20 500 000
to Resilient Properties (Pty) Limited.
The proceeds of the disposal have been used to reduce the borrowings owing to
Investec Bank Limited and to unwind the interest rate fixes thereon.
5. Borrowings
Subsequent to the claw-back offer and the disposal being successfully
implemented, the borrowings in A-Prop will decrease from approximately R606
000 000 to approximately R602 000 000. In addition, A-Prop has negotiated
interest only facilities for a period of 36 months with its financiers,
subject to concluding agreements to unwind the current interest rate fixes
(which averaged 13,9%) and entering into new interest rate fixes of one, two
and three years.
6. Financial effects
The pro forma historical financial effects of the claw-back offer and
disposal set out in the table below have been prepared for illustrative
purposes only to provide information on how the disposal and claw-back offer
may have impacted on A-Prop. Because of their nature, the pro forma historical
financial effects may not give a fair reflection of A-Prop"s financial
position after the disposal and claw back offer or the effect of the disposal
and claw back offer on future earnings.
Before the After the
disposal disposal
and claw- After the and claw-
back offer disposal back offer %
(cents) (cents) (cents) Change
Distribution per linked unit 14,27 1 14,18 2 11,36 6 (20,39)
Historical earnings per linked unit (104,56)1 (104,38)3 (87,86)7 15,97
Historical headline earnings per
linked unit 40,97 1 40,97 4 29,58 8 (27,80)
Historical net asset value
per linked unit 51,31 1 51,47 5 38,98 9 (24,03)
Historical tangible net asset value per
linked unit 51,31 51,47 5 38,98 9 (24,03)
Weighted average number of shares in
issue (000"s) 155 692 155 692 215 692
Notes:
1. The historical distribution, earnings and headline earnings, net asset
value and net tangible asset value per A-Prop linked unit as set out in the
"Before the disposal and claw-back offer" column of the table are based on A-
Prop"s reviewed results for the year ended 30 June 2003.
2. The distribution per A-Prop linked unit in the "After the disposal" column
of the table is based on the assumption that the disposal took effect on 1
July 2002 and the requisite borrowings were repaid on that date. The net
income before interest of Voortrekker Centre for the year ended 30 June 2003
has been excluded. Interest on the borrowings at a rate of 14,24% has been
saved.
3. The historical earnings per A-Prop linked unit as set out in the "After the
disposal" column of the table is based on the assumption that the disposal
took effect on 1 July 2002 and the requisite borrowings were repaid on that
date. The net income before interest of Voortrekker Centre for the year ended
30 June 2003 has been excluded. Interest on the borrowings at a rate of 14,24%
has been saved. The fair value write down of approximately R8,8 million, which
occurred during the year, has been reversed ("the fair value adjustment") and
the loss on disposal of approximately R8,5 million has been included ("loss on
disposal").
4. The historical headline earnings per A-Prop linked unit as set out in the
"After the disposal" column of the table was undertaken on the same basis as
the historical earnings after the disposal calculation but excludes the fair
value adjustment and loss on disposal.
5. The historical net asset value and net tangible asset value per A-Prop
linked unit as set out in the "After the disposal" column of the table is
based on the assumption that the disposal took effect on 30 June 2003 and the
requisite borrowings were repaid on that date. The surplus cash from the
disposal has been included in the cash resources of A-Prop.
6. The distribution per A-Prop linked unit in the "After the disposal and
claw-back offer" column of the table is based on the distribution per A-Prop
linked unit after the disposal calculation and further adjusts the overall
effective interest rate to reflect an indicative interest charge of 11,72% on
total borrowings including the capitalisation of the unwind costs.
7. The historical earnings per A-Prop linked unit as set out in the "After the
disposal and claw-back offer" column of the table is based on the earnings per
A-Prop linked unit after the disposal calculation and further adjusts the
overall effective interest rate to reflect an indicative interest charge of
11,72% on total borrowings including the capitalisation of the unwind costs.
The adjustments now include an exceptional item for the unwind costs of the
transaction of approximately R27,0 million incurred on the reorganisation of
the borrowings (the "exceptional item").
8. The historical headline earnings per A-Prop linked unit as set out in the
"After the disposal and claw-back offer" column of the table was undertaken on
the same basis as the historical earnings after the disposal and claw-back
offer calculation but excludes the exceptional item.
9. The historical net asset value and net tangible asset value per A-Prop
linked unit as set out in the "After disposal and claw-back offer" column of
the table is based on the historical net asset value and net tangible asset
value per A-Prop linked unit after the disposal calculation, respectively, and
further assumes that the R30 million cash is received on 30 June 2003 and the
requisite linked units issued on that date. These linked units have not been
fair valued and remain included in the debentures at 49,05 cents per debenture
less the costs associated with the claw-back offer which were written off the
debenture capital. Of the approximately R27,8 million of costs, R14,3 million
is paid from the cash raised and the remaining R13,5 million capitalised to
borrowings.
7. Salient dates of the claw back offer
The salient dates in respect of the claw-back offer are reflected in the
table below. Any changes to these dates will be published on SENS and in the
press.
2004
Last day to trade in A-Prop linked units in order to participate in the claw-
back offer Friday, 23 January
Listing of letters of allocation on the JSE Monday, 26 January
A-Prop linked units commence trading ex rights on the JSE Monday, 26 January
Record date for participation in the claw-back offer Friday, 30 January
Claw-back offer opens at 09:00 on Monday, 2 February
Claw-back offer circular posted to A-Prop linked
unitholders Monday, 2 February
Last day to trade letters of allocation on the JSE Friday, 13 February
New A-Prop linked units listed on the JSE Monday, 16 February
Claw-back offer closes at 14:30 on Friday, 20 February
Record date for letters of allocation Friday, 20 February
Results of claw-back offer announced on SENS Monday, 23 February
New A-Prop linked units issued Monday, 23 February
Results of the claw-back announced in the press Tuesday, 24 February
Notes:
1. Dematerialised linked unitholders are required to inform their CSDP or
broker as to their instructions in terms of the claw-back offer in the manner
and time stipulated in the agreement governing the relationship between the
linked unitholder and their CSDP or broker.
2. Unit certificates may not be dematerialised or rematerialised between
Friday, 23 January 2004 and Friday, 30 January 2003, both days inclusive.
8. Circular and withdrawal of cautionary announcement
A circular providing full details of the claw-back offer will be sent to A-
Prop linked unitholders in due course. Unitholders are no longer required to
exercise caution in their dealings in A-Prop linked units.
Sandton
18 November 2003
Corporate Advisor, Legal Advisor
and Sponsor
JAVACAPITAL
Date: 18/11/2003 05:56:31 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
