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Arnold Property Fund Limited - PRESS RELEASE
Arnold Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2001/011887/06)
Share Code: ARP
ISIN Code: ZAE000031720
(`A-Prop` or `the company`)
PRESS RELEASE
A-PROP`S R312 m FACELIFT TO BOOST PORTFOLIO OVER R1 bn MARK
Following its turnaround in the past year, listed property fund A-Prop together
with Momentum Property Investments today announced their negotiations for the
acquisition by A-Prop of properties worth around R312 million in exchange for
the issue of new A-Prop units. The potential transaction, aimed at
repositioning the fund in terms of size and quality of earnings, is set to boost
A-Prop`s market capitalisation considerably and slash its current high gearing
ratio to in line with industry norms.
The transaction comes in the wake of a series of positive initiatives by
management to reposition the fund including recapitalising the company and
restructuring debt. Michael Aitken, a director of fund manager Corovest, says
that `the acquisition realises the turnaround strategy engineered by Corovest a
year ago. We initially concentrated on stabilising the fund and are now in a
position to bolster its portfolio to over the R1 billion mark,` he says. The
enhanced portfolio value will significantly raise the fund`s competitive profile
in the listed property sector.
`On completion of the transaction the new-look A-Prop, which will bear little
resemblance to the original fund, will be positioned to expand both its asset
base and investor spread,` says Aitken referring to the larger market cap that
will enable A-Prop to pursue further acquisitions while containing gearing
levels and at the same time make A-Prop an attractive opportunity for investors.
Corovest will be joined by RMB Properties in a joint venture to co-manage the
reconstituted fund. `Together we intend to continue to grow the fund
strategically and to improve the quality of earnings,` says Aitken.
Given that the consideration for the properties will take the form of new A-Prop
units, it is expected that the transaction, if concluded, will trigger a change
of control of the fund. The transaction will be conditional on A-Prop
unitholders waiving the mandatory offer by Momentum to all unitholders to buy
their units, which is automatically set in motion by a change of control. In
addition the potential transaction will be conditional on securing all necessary
unitholder and regulatory controls.
A-Prop is due to release year-end results to June 2004 in August. Aitken says
that the fund is on track to meet its forecast 7 cents per unit distribution.
Ends.
Issued by: Envisage Communications
Nicole Sacks
(011) 325 5944/083 287 2771
On behalf of: The Corovest Property Group
Michael Aitken
(011) 775 6509/083 419 0900
Issue date: 16 July 2004
Date: 15/07/2004 05:19:17 PM Produced by the JSE SENS Department
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