| Fri 28 Nov 2003, 9:22 | | Results of private placement and commencement of l |
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Emira Property Fund - Results of private placement and commencement of listing
Emira Property Fund
A property fund created under the Emira Property Scheme,
registered in terms of the Collective Investment Schemes Control Act
Share code: EMI ISIN: ZAE000050712)
("Emira")
Results of private placement and commencement of listing
1. Introduction
Further to the abridged pre-listing statement published on 18 November 2003,
RMB Corporate Finance is authorised to announce the results of the private
placement and information relating to the commencement of the listing of Emira
on the JSE Securities Exchange South Africa ("JSE").
2. Results of the private placement
In terms of Emira"s pre-listing statement, Emira offered 81 600 000
participatory interests ("PIs") at an issue price of 500 cents per PI in terms
of a private placement.
Subsequent to the issue of the pre-listing statement, Emira has reviewed its
agreement with Primeview Properties (Proprietary) Limited ("the vendor"), the
vendor of Market Square, Plettenberg Bay, in terms of which the purchase
consideration of R79 million will be settled through a cash payment of R29
million and the issue of 10 million PIs at 500 cents per PI. The pre-listing
statement stated that the purchase consideration would be settled in cash.
Accordingly, Emira has reduced the number of PIs issued in terms of the
private placement by 10 million PIs to 71 600 000 PIs, thereby raising R358
million. A further 10 million PIs will be issued to the vendor upon transfer
of the property.
3. PIs in issue
At the listing date, Emira has 262 133 684 PIs in issue.
4. Transfer of properties
The listing was conditional upon 67 properties with a value of R1 236
million being transferred by the listing date. At today"s date, 56 properties
have been transferred totaling R1,1 billion and a further nine properties have
been lodged for transfer totaling R138 million.
Although the conditions for listing relating to the transfer of properties,
as set out the pre-listing statement, have not been fulfilled, Emira is
confident that sufficient properties will be transferred in the immediate
future to enable such conditions to be satisfied. The JSE has approved the
listing on the basis that not all the properties will have been transferred by
listing date and Emira has received confirmation from investors who have
subscribed for PIs in terms of the private placement that they are in favour
of proceeding with the listing, notwithstanding the fact that all properties
have not been transferred by listing date.
5. Pro forma financial information
The pro forma financial information presented below is based on the
properties which will have been transferred to Emira by the listing date. The
pro forma financial information has been prepared for illustrative purposes
only and may not give an accurate reflection of Emira"s financial position and
performance. The reporting accountants have reviewed the pro forma financial
information and their report in this regard is available for inspection at the
offices of Emira, 6 Protea Place, Sandton, 2196.
5.1 Pro forma balance sheet
The revised pro forma balance sheet of Emira at the listing date is shown
below:
R"000
Non-current assets
Investment properties - freehold 1 031 777
Investment properties - leasehold 54 732
Investment properties - total 1 086 509
Fixed assets 16 332
Current assets
Sinking fund investment 22 297
Bank and cash 397 310
Assets 1 522 448
Participatory interests 1 299 520
Distributable reserve (197)
1 299 323
Borrowings 223 125
Equity and liabilities 1 522 448
PIs in issue ("000) 262 134
Net asset value per PI (cents) 496
The pro forma balance sheet listed above, has been prepared to reflect the
assets and liabilities envisaged as being owned and owed, respectively, at the
listing date, after taking account of the assumed conclusion of the following
transactions:
* transfer of the properties acquired as detailed in paragraph 4 above;
* the raising of borrowings of R226,1 million;
* the incurral of bond costs of R3 million in order to raise the borrowings
referred to above and the capitalisation of these costs to the original
borrowings in terms of the accounting policy in respect of borrowing financial
instruments;
* the settlement of listing and other transaction costs;
* the settlement in full of the considerations payable for the acquisitions
of the property portfolios by means of the issue of units and, in certain
instances, the payment of cash; and
* the acceptance, in full, of the offer of 71 600 000 Pls at 500 cents each,
raising cash of R358 million.
5.2 Pro forma income statement
The revised pro forma income statement of Emira for the most recent year-
ends of the properties included in the Emira portfolio at the listing date is
shown below:
Pro forma
aggregated historical
income statement
R"000
Revenue 216 096
Operating income 129 642
Net finance costs (43 028)
Net income available for distribution 86 614
The pro forma historical income statement information detailed above
presents the aggregated audited or reviewed, actual financial results of the
properties being acquired taking into account the reduced property portfolio
as set out in paragraph 4 above, notwithstanding:
* the fact that the financial reporting periods of the different
portfolios/entities are not coterminous;
* the fact that the financial reporting periods reflect results for less than
12 months in instances where trading income and expenditure have been earned
or incurred for a period of less than a year;
* the fact that the results reported incorporate costs arising from
borrowings of different amounts to the borrowings which have been raised for
the Emira Property Fund"s utilisation in the future;
* the fact that certain properties acquired were under development during the
pro forma reporting period and did not earn any income during this period, but
will earn such income in the future; and
* the fact that the results may incorporate certain transactions not
concluded at arm"s length due to the properties being utilised by the vendors.
6. Profit forecast
The revised profit forecast of Emira for the one-month period ending 31
December 2003 and the six-month periods ending 30 June 2004 and 31 December
2004 are shown below:
Forecast for the Forecast for the Forecast for the
one month ended six months ended six months ended
31 December 2003 30 June 2004 31 December 2004
R"000 R"000 R"000
Revenue 19 307 152 952 165 177
Operating income 11 109 86 906 95 667
Net finance costs 176 11 567 11 948
Net income
available for distribution 10 933 75 338 83 719
Distributions to PI holders (10 933) (75 338) (83 719)
Retained income
for period - - -
PIs in issue for
period ("000) 262 134 272 134 272 134
Net income per PI (cents) 4,2 27,7 30,8
Distribution per PI (cents) 4,2 27,7 30,8
Yield (based on annualised
distribution and listing
price) (%) - 11,1 12,3
The profit forecast is based on the following assumptions:
1. The property portfolio acquisitions are effective as at 1 December 2003
and consequently the fund is dormant for the period from 15 September 2003,
the date of registration by the FSB, to 30 November 2003, except for the
properties where transfers are delayed. These properties are included in the
forecast at management"s best estimate of the date of the transfers, with all
properties being transferred by 15 January 2004.
2. Revenue is largely based on existing lease agreements, with conservative
assumptions being applied in estimating lease renewals and take up of vacant
space.
3. Occupancy rates have been forecast assuming relative stability in letting
prospects.
4. Finance costs on borrowings have been calculated with reference to the
borrowing facilities and terms and conditions applicable thereto.
5. Cash on call has been offset against the floating rate borrowings where
possible and if not, cash balances earn interest at a rate of 7%.
6. The mortgage bond costs have been capitalised to the borrowings and
amortised over the terms of the facilities.
7. All net income after providing for amounts considered appropriate to cover
provision for doubtful debts and repairs to and maintenance of properties will
be distributed.
8. The distributions will take place within three months after the end of
each reporting period.
9. In order to project conservative forecasts, no capital appreciation in the
value of the property portfolios has been taken into account.
10. Despite the intention of Emira to grow the fund, no further properties
have been acquired. All PIs will be in issue from January 2004.
The reporting accountants have reviewed the revised profit forecast and
their report in this regard is available for inspection at the offices of
Emira, 6 Protea Place, Sandton, 2196.
7. Commencement of listing
The listing of Emira in the Financial - "Real Estate" sector of the JSE
lists will commence from the opening of trade today, 28 November 2003.
Sandton
28 November 2003
Merchant bank and joint sponsor
Rand Merchant Bank
Corporate Finance
A Division of FirstRand Bank Limited
Registration number 05/01225/06
Reporting accountants
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Attorneys
Hofmeyr Herbstein Gihwala Cluver & Walker Inc.
(Registration number 1997/001523/21)
Reporting accountants
Grant Thornton Kessel Feinstein
Chartered Accountants (SA)
Accountants, Auditors & Business Advisers
Lead sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Date: 28/11/2003 09:00:06 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
