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PRIMA - ACQUISITION OF PROPERTIES FROM A WHOLLY-OWNED SUBSIDIARY OF ELLERINE
HOLDINGS LIMITED
PRIMA PROPERTY TRUST
Share code: PRM ISIN code: ZAE000005641
(`Prima`)
(A collective investment scheme in property managed by Prima Property Trust
Managers Limited (`PPTM`), in terms of the Collective Investment Schemes Control
Act, 45 of 2002)
ACQUISITION OF PROPERTIES FROM A WHOLLY-OWNED SUBSIDIARY OF ELLERINE HOLDINGS
LIMITED (`ELLHOLD`)
INTRODUCTION
Java Capital is authorised to announce that an agreement has been concluded for
the acquisition by Prima of the property letting businesses conducted in respect
of a portfolio of 34 properties (the `properties`) from Ellhold, the terms of
which are set out below (the `acquisition`).
RATIONALE FOR THE ACQUISITION
Prima continues to increase the size of its portfolio by acquiring quality
properties with capital values of under R15 million, thereby diversifying its
property portfolio and reducing its risk profile.
The acquisition will result in Prima`s income being spread over a larger
portfolio of properties and will also further increase the geographic spread of
the portfolio.
The properties comprise quality retail buildings tenanted predominantly by
national retailers such as Town Talk, FurnCity and Ellerine Furnishers in terms
of leases commencing 1st November 2004 with durations of between three and five
years.
The acquisition will enhance Prima`s property portfolio.
TERMS OF THE ACQUISITION
Prima is acquiring the properties from Ellhold with effect from 1 November 2004
(the `effective date`).
The aggregate purchase price of R82 million is payable as to R60 million in cash
and the balance by the issue of 24 444 444 units in Prima at 90 cents each (the
`consideration units`). The consideration units will rank for income
distributions with effect from the effective date.
CONDITIONS PRECEDENT
The acquisition is subject to inter alia:
- the unconditional approval to the acquisition being obtained from the
Competition Authorities; and
- the receipt of the approval of the JSE in writing for the listing of the
consideration units, subject to the properties having been transferred.
FINANCIAL EFFECTS
The pro forma financial effects of the acquisition set out in the table below
have been prepared for illustrative purposes only to provide information on how
the acquisition may have impacted on Prima. Because of their nature, the pro
forma financial effects may not give a fair reflection of Prima`s financial
position after the acquisition or the effect of the acquisition on future
earnings. The effects of the acquisition on earnings per unit, net asset value
per unit and tangible net asset value per unit are immaterial and have therefore
not been disclosed.
Before After %
acquisition acquisition Change
Headline earnings per 10.24 10.83 5.76
unit (cents)
Notes:
1. The historical headline earnings per Prima unit as set out in the `Before
acquisition` column of the table is based on Prima`s audited results for
the ten months ended 30 April 2004.
2. The historical headline earnings per Prima unit as set out in the `After
acquisition` column of the table are based on the following assumptions:
- the acquisition took effect on 1 July 2003;
- the acquisition and the costs thereof were funded by borrowings of R60
million and the issue of 24 444 444 Prima units at 90 cents per unit;
- the Prima units to be issued in partial consideration for the
acquisition were issued on 1 July 2003;
- interest on the borrowings was raised at an average rate of 10,2% per
annum; and
- the historical financial numbers used in respect of the properties
relate to a twelve month period and have been adjusted accordingly to
reflect a ten month period.
3. Fair value adjustments to the purchase consideration payable in respect of
the acquisition have been excluded for purposes of determining historical
headline earnings.
CIRCULAR TO PRIMA UNITHOLDERS
Given that the acquisition constitutes a Category 2 transaction in terms of the
JSE Listings Requirements, a circular to Prima unitholders will be issued in due
course.
Rosebank
28 October 2004
Corporate Advisor
Legal Advisor
Sponsor
Java Capital (Proprietary) Limited
Reporting accountants and auditors
Grant Thornton
Chartered Accountants (SA)
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