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Arnold Property Fund Limited - Acquisition Of Property Letting Enterprises And Further Cautionary Announcement Arnold Property Fund Limited (Incorporated in the Republic of South Africa) (Registration No. 2001/011887/06) Share code: ARP ISIN code: ZAE000031720 (`A-Prop`) ACQUISITION OF PROPERTY LETTING ENTERPRISES AND FURTHER CAUTIONARY ANNOUNCEMENT Further to the announcement published on SENS on 15 July 2004, Java Capital is authorised to announce that Arnold Properties (Proprietary) Limited (`Arnold Properties`), a wholly owned subsidiary of A-Prop, has concluded agreements with: Momentum Property Investments (Proprietary) Limited (`Momentum Properties`) for the acquisition of property letting enterprises conducted by Momentum Properties (which enterprises include R4 000 000 cash) in respect of 15 immovable properties (the `Momentum Properties portfolio`) for an aggregate purchase consideration of R249 797 000; and Momentum Property Group Limited (`Momentum Group`) for the acquisition of property letting enterprises conducted by Momentum Group in respect of 2 immovable properties as well as leasehold rights in respect of 2 properties (the `Momentum Group portfolio`) for an aggregate purchase consideration of R62 510 000, (collectively, the `transactions`). The transactions result in A-Prop acquiring 1 retail, 11 commercial and 7 industrial properties with a combined rentable area of 190 116 m2 situated in the major metropolitan areas of Gauteng, Durban and Bloemfontein. The transactions, which are indivisibly inter-related, are subject to the following principal terms and conditions: - the aggregate purchase price payable for the Momentum Properties portfolio and the Momentum Group portfolio, being R312 307 000, is to be discharged by way of the allotment and issue by A-Prop of 405 593 507 linked units at an issue price of 77 cents per linked unit (the `consideration units`). The Momentum Properties portfolio and the Momentum Group portfolio have been acquired at an anticipated forward yield of 13%. This yield has been calculated based on the net rental income of the Momentum Properties portfolio and the Momentum Group portfolio before fund expenses but after having capitalised the costs of the transactions; the agreements are subject to the fulfilment of various suspensive conditions including: - the securing of the requisite approval of the Competition Authorities in accordance with the provisions of the Competition Act; to the extent necessary, unitholders resolving in general meeting to: - ratify the conclusion and implementation of the transaction; - waive any requirement of the JSE Securities Exchange South Africa and/or the Securities Regulation Panel that an offer be made to minority unitholders in terms of s440 of the Companies Act, 1973, arising from the conclusion and implementation of the agreements and the issue of the consideration units; - the conclusion of a management contract between Arnold Properties and a new joint venture management company to be formed as between RMB Properties (Proprietary) Limited and Corovest Property Group (Proprietary) Limited; - the possession of the underlying enterprises shall be acquired by Arnold Properties on 1 November 2004 from which date Arnold Properties shall be entitled to every benefit and all income arising from the enterprises and from which date the enterprises shall be held by Arnold Properties at its risk and expense; - Momentum Properties or Momentum Group, as the case may be (the `seller`) or its renouncee shall be entitled to the benefit of the consideration units with effect from 1 November 2004. A mechanism has been incorporated in the agreement to procure that the seller shall effectively not be entitled to distributions paid in respect of income generated by Arnold Properties prior to 1 November 2004; - transfer of each of the properties comprising the enterprise is to be effected as soon as possible on or after 1 November 2004; the agreements are subject to warranties normal for a transaction of the nature contemplated. The financial effects of the transactions on A-Prop linked unitholders and the salient dates applicable to the transactions will be published shortly. In the interim, unitholders should continue to exercise caution in their dealings in A- Prop linked units. Sandton 22 September 2004 Corporate advisor, legal advisor and Sponsor to A-Prop Java Capital (Proprietary) Limited Merchant bank to Momentum Properties and Momentum Group RMB Corporate Finance Legal advisor to Momentum Properties and Momentum Group Werksmans Attorneys
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