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Pangbourne - Acquisition of Letting Portfolio and Detailed Cautionary
Pangbourne Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP ISIN: ZAE000005252
(`Pangbourne`)
ACQUISITION OF LETTING ENTERPRISES AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Pangbourne combined unitholders are advised that agreement has been reached
between Pangbourne and Strupot Property Investments (Proprietary) Limited
(`Strupot`) whereby, subject to the fulfilment of certain conditions precedent
as set out in paragraph 3 below, Pangbourne will acquire a portfolio of letting
enterprises, including the related immovable properties and assets (`the
portfolio`) from Strupot (`the transaction`) for a total consideration of
approximately R439 million (`the total consideration`).
2. THE RATIONALE FOR THE TRANSACTION
The portfolio consists of 26 properties situated mainly in KwaZulu-Natal and
Gauteng. The portfolio is well let with 55% of leases expiring after June 2007.
The portfolio offers Pangbourne, under its own management, an opportunity to
improve on occupancies in certain of the buildings.
The properties have been acquired on a forward yield of 13,56% on the total
consideration. Pangbourne`s existing bank facilities will be utilised to settle
the total consideration in cash. On the assumption that the net borrowing rate
will be 12,03% nacm (fixed for three years) management expects the transaction
to add at least R6,5 million, or 3,69 cents per combined unit, to its
distribution on an annualised basis.
Management expects that the properties will be transferred to Pangbourne
subsequent to 1 July 2004. Accordingly Pangbourne will own the portfolio for
less than a full year and the impact of the transaction on distributions made in
respect of the financial year ending 30 June 2005 will be lower than the above
forecast numbers.
3. CONDITIONS PRECEDENT TO THE TRANSACTION
The transaction is subject to the following conditions precedent:
- the approval of the relevant Competition Authorities on an unconditional basis
or on conditions which are acceptable to Strupot and Pangbourne;
- the approval of Pangbourne combined unitholders in general meeting;
- the obtaining of all the necessary regulatory approvals including the approval
of the JSE Securities Exchange South Africa; and
- the procuring by the purchaser of land surveyor certificates in respect of
each property within the portfolio.
4. RIGHTS OF PRE-EMPTION
A number of the properties within the portfolio are subject to rights of pre-
emption in favour of tenants. Accordingly, the purchase by Pangbourne of each
property (and consequently the letting enterprise of which such property forms
part) so affected by such rights of pre-emption, is subject to the right of pre-
emption not being exercised. In the event that any of the rights of pre-emption
are exercised, the transaction will continue in respect of the remaining letting
enterprises. In such event, the consideration referred to in paragraph 1 above
will be adjusted accordingly.
5. EFFECTIVE DATE
The effective date in respect of each letting enterprise comprising the
portfolio is the date on which the immovable property forming part of such
enterprise is transferred to Pangbourne.
6. FURTHER CAUTIONARY ANNOUNCEMENT
The forecast financial information set out in paragraph 2 above has not been
reviewed by Pangbourne`s auditors. Such forecast financial information merely
reflects management`s expectations regarding the financial performance of the
portfolio in the short term and must therefore be treated with caution. An
announcement containing, inter alia, details of the reviewed pro forma financial
effects of the transaction and a notice of general meeting will be published in
due course, until which time combined unitholders are advised to continue to
exercise caution when trading in their Pangbourne combined units.
Craighall
14 June 2004
Investment bank and sponsor
Standard Bank
Legal adviser
Prinsloo, Tindle & Andropoulos Inc.
Attorneys
Date: 15/06/2004 07:48:04 AM Produced by the JSE SENS Department
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