| Wed 19 Nov 2003, 17:06 | | DISPOSAL OF CORPCAPITAL"S PROPERTY DIVISION |
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CORPCAPITAL LIMITED - DISPOSAL OF CORPCAPITAL"S PROPERTY DIVISION
CORPCAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 1983/011384/06)
Share code CPA
ISIN ZAE000034260
("Corpcapital" or "the company")
DISPOSAL OF CORPCAPITAL"S PROPERTY DIVISION
1. Introduction
Java Capital (Proprietary) Limited is authorised to announce that
Corpcapital"s wholly-owned subsidiaries Corpcapital Investments
(Proprietary) Limited ("Corpcapital Investments") and Corpcapital
Investments Two (Proprietary) Limited (collectively, the "Corpcapital
Group") have concluded an agreement ("the agreement") with The Standard
Bank of South Africa Limited ("Standard Bank"), Marc Wainer ("Wainer")
and Wolf Cesman ("Cesman") in terms of which, subject to the fulfilment
of the conditions precedent set out in paragraph 4 below (the "conditions
precedent") will result in the corporatisation and subsequent realisation
of the Corpcapital Group"s property division as more fully described in
paragraph 2 below ("CPD").
2. Corporatisation Of CPD
The corporatisation of the CPD shall be effected by way of the sale, as a
going concern, of CPD"s business comprising the following activities,
namely:
* property fund management and property asset management;
* property trading and property investments; and
* property consulting and property advisory, but excluding any units in
Redefine Income Fund Limited ("Redefine") and any units in Prima
Property Fund ("Prima") held by the Corpcapital Group (collectively,
the "CPD business").
The CPD business will be disposed of by the Corpcapital Group to a newly
incorporated company, Madison Property Fund Managers (Proprietary) Limited
(the "new property vehicle"), which will initially constitute a wholly-
owned subsidiary of Corpcapital Investments.
3. Acquisition Of Shareholding In New Property Vehicle By Standard Bank
And Executive Management
Corpcapital has agreed to sell:
* 30% of its shares in and claims on loan account (collectively,
"equity") against the new property vehicle, to Standard Bank for a
purchase consideration of R18 450 000;
* 15% of the equity in the new property vehicle to Wainer at a
consideration equal to 15% of the net asset value of the CPD as
reflected in the audited balance sheet of the CPD at 31 August 2003,
being an amount of approximately R2 560 000;
* 15% of the equity in the new property vehicle to Cesman at a
consideration equal to 15% of the net asset value of the CPD as
reflected in the audited balance sheet of the CPD at 31 August 2003,
being an amount of approximately R2 560 000.
Wainer and Cesman"s ongoing involvement and commitment to the new property
vehicle will ensure the sustainability of the business and has facilitated
the realisation by the Corpcapital Group of its 30% equity interest in the
new property vehicle to Standard Bank. Furthermore their equity interest in
the new property vehicle is anticipated to engender value for the
Corpcapital Group"s remaining 40% equity shareholding in the new property
vehicle. In recognition of these factors, Wainer and Cesman have been
afforded the opportunity to acquire an investment in the new property
vehicle at an entry price determined with reference to the net asset value
of the CPD at 31 August 2003 (excluding any goodwill).
4. Realisation Of Corpcapital"s Remaining 40% Interest In The New Property
Vehicle
The Corpcapital Group is entitled, subject to certain limited restrictions
set out in the agreement, to dispose of its remaining 40% equity in the new
property vehicle to a third party purchaser/s. The parties to the agreement
have agreed the terms and procedure pursuant to which if Corpcapital does
not dispose of its remaining 40% equity in the new property vehicle to a
third party purchaser, Standard Bank, Wainer and Cesman will acquire the
remaining 40% equity.
The corporatisation of the CPD and the sale by Corpcapital Investments of
its equity in the new property vehicle is, collectively, referred to herein
as "the transaction".
5. Rationale For The Transaction
On 28 February 2003 Corpcapital announced a strategy to unlock value for
shareholders by the responsible realisation of the company"s investments
and the return of capital to shareholders. The transaction is in line with
this strategy.
6. Conditions Precedent
The transaction is subject to the fulfilment of the following conditions
precedent, namely:
* if the transfer by the CPD of any of the constituent assets of the
business would trigger any pre-emptive (or similar) rights in favour
of any third party/ies, the Corpcapital Group being able to secure a
waiver of any such third party/ies pre-emptive (or similar) rights;
* the securing, to the extent necessary, of any other regulatory
approvals required for the conclusion and implementation of the
agreement.
The regulatory approvals contemplated in the second bullet point include
the securing, to the extent necessary, of Competition Board approval and
the approval of the relevant Registrar of the Financial Services Board
("FSB") for the transfer of shares or the interest in certain of the
property management entities in which the CPD currently holds an equity
interest where the transfer of the equity interest is statutorily subject
to the securing of the requisite FSB approval. It is anticipated these
conditions precedent would be fulfilled by 31 January 2004.
7. Financial Effects
As detailed in Corpcapital"s 13 November 2003 trading update, financial
results for the year ended 31 August 2003 are in the course of preparation.
It is expected that the financial results will be released before the end
of November 2003. As the transaction is effective post 31 August 2003 (the
effective date being 8 September 2003), it has been determined that, for
comparative purposes, the 2003 financial results are the most applicable.
The financial effects, showing the pro forma effects of the transaction on
the 2003 full year results, shall be released after the dissemination of
the 31 August 2003 results.
Rosebank
19 November 2003
Corporate Advisor and Sponsor to Corpcapital
Legal Advisor to Corpcapital
Reporting Accountants and Auditors
Date: 19/11/2003 04:49:28 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
