| Thu 18 Dec 2003, 17:42 | | DISPOSAL BY RENTSURES SUBSIDIARY AND CAUTIONARY A |
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RENTSURE - DISPOSAL BY RENTSURES SUBSIDIARY AND CAUTIONARY ANNOUNCEMENT
RENTSURE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1946/023539/06)
(Share Code: RNT)
(ISIN code: ZAE000012811)
(Rentsure or the company)
SUPPLEMENTARY ANNOUNCEMENT REGARDING THE DISPOSAL BY RENTSURES SUBSIDIARY,
RENTMEESTER ASSURANCE LIMITED, OF ITS BUSINESS OF OWNING AND LETTING IMMOVABLE
PROPERTY TO DAISY STREET INVESTMENTS 127 (PTY) LIMITED, AND CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 25 June 2002, 2
August 2002, 17 September 2002 and the detailed announcement, dated 25 September
2002, concerning the disposal by Rentmeester Assurance Limited (Rentmeester)
of certain of its properties to Daisy Street Investments 127 (Pty) Limited
(Daisy Street)Bridge Capital Services (Pty) Limited is authorised to announce
that:
- the agreement dated 20 September 2002 concluded between Rentmeester and
Daisy Street, in terms of which Rentmeester would have disposed of certain
of its properties (the properties) to Daisy Street has, following further
negotiations between Rentmeester and Daisy Street, been superceded by an
amended agreement dated 28 November 2003; and
- in terms of the amended agreement, the business of Rentmeester of owning
and leasing the properties (the business) will be disposed of to Daisy
Street (the disposal).
2. SALIENT TERMS OF THE DISPOSAL
The salient terms of the disposal are as follows:
- the disposal consideration is R91 000 000 (the disposal consideration),
which is to be settled as set out paragraph 5 below;
- the effective date of the disposal is the date of transfer of the
properties into the name of Daisy Street (the effective date);
- certain leasable portions of the property known as Rentmeesterpark, which
forms part of the properties, will be leased to Rentmeester for a period of
10 years from the effective date, and the rental will escalate annually at
a rate of 9%;
- certain other leasable portions of the properties will be leased to
Rentmeester for a period of 3 years from the effective date and the rentals
in respect of these properties will escalate annually at a rate of 10%; and
- Rentmeester has furnished Daisy Street with warranties customary to a
transaction of this nature.
3. RATIONALE FOR THE DISPOSAL
The board of directors of Rentmeester has approved the disposal for the
following reasons:
- to reduce Rentmeesters exposure to immovable property and thereby enhance
its asset distribution;
- to realise a significant portion of Rentmeesters current property
portfolio in cash in order to increase future returns on its assets; and
- to redistribute, with reference to the property-based instruments forming
part of the disposal consideration, its investment risk profile over a
significantly larger property portfolio (relative to the properties) with
the possibility of realising such property-based instruments within 2 to 3
years from the effective date.
4. CONDITIONS PRECEDENT
The disposal is subject to, inter alia, the following conditions precedent:
- the relevant statutory and regulatory approvals being obtained, including
approval by the shareholders of Rentsure in general meeting in compliance
with the provisions of the Listings Requirements of the JSE Securities
Exchange South Africa (JSE) applicable to Rentsure, and the approval of
the Competition Commission, to the extent that such approval may be
required;
- Rentmeester satisfying itself that the convertible redeemable debentures of
Fairvest Property Holdings Limited (Fairvest), referred to in paragraphs
5 and 6 below, will be converted into linked units in Alpina Investments
Limited (Alpina); and
- the delivery of certain guarantees by Fairvest in respect of the disposal.
5. DISCHARGE OF DISPOSAL CONSIDERATION
The disposal consideration will be discharged as follows:
- an amount of R20 000 000 will be paid to Rentmeester in cash on the
effective date; and
- the balance of the disposal consideration will be discharged by the issue
to Rentmeester of:
- compulsory convertible debentures in Alpina to the value of R20 000
000 (Alpina CCDs); and
- 34 000 000 convertible redeemable debentures in Fairvest at R1.50 each
to the value of R51 000 000 (Fairvest CRDs).
6. SALIENT TERMS AND CONDITIONS OF THE ALPINA CCDs AND FAIRVEST CRDs
6.1 Alpina CCDs
The Alpina CCDs carry a coupon of 12% (NACA) payable semi-annually.
The Alpina CCDs are convertible into linked units in Alpina, that
will be, subject to the necessary regulatory approvals, listed on the
JSE (Alpina linked units), on the earlier of the date of disposal by
Alpina of the property known as Rentmeesterpark or the expiry of a
period of 24 months from the date of the issue of the Alpina CCDs.
Upon conversion of the Alpina CCDs into Alpina linked units,
Rentmeester shall have the option to require Alpina to purchase the
Alpina linked units.
6.2 Fairvest CRDs
The Fairvest CRDs carry a coupon of 12% (NACQ) payable annually.
Rentmeester shall be entitled to require the Fairvest CRDs to be
converted into Alpina linked units with a monetary value equal to R51
000 000 within 90 days from the effective date. Daisy Street has
warranted that the Alpina linked units shall, for a period of not less
than 36 months from the effective date, yield a return of no less than
12% per annum.
7. FINANCIAL EFFECTS OF THE DISPOSAL AND CAUTIONARY ANNOUNCEMENT
As Rentsure has not yet published its results for the year ended 30 June 2003,
the financial effects of the disposal will only be published when the
aforementioned results are published. Until such time as the financial effects
of the disposal are published, shareholders are advised to exercise caution when
dealing in their Rentsure shares.
8. CIRCULAR TO SHAREHOLDERS
A circular to Rentsure shareholders, subject to the approval of the JSE,
incorporating details of the disposal and including a notice of general meeting
of shareholders, will be posted to shareholders within 28 days of the date on
which the company publishes its financial results for the financial year ended
30 June 2003.
9. EARLIER ANNOUNCEMENT
Save as disclosed in this supplementary announcement, there have been no other
significant changes affecting any matter contained in the announcement of 25
September 2002 and no other significant new matters have arisen that would have
been required to be mentioned in the announcement of 25 September 2002, if they
had arisen at the time of preparation of that announcement.
Pretoria
18 December 2003
Sponsor:
Bridge Capital Services (Pty) Limited
Attorneys to Rentsure Holdings Limited:
Roodt Inc.
Date: 18/12/2003 05:15:05 PM Produced by the JSE SENS Department
