| Tue 15 Feb 2005, 17:37 | | INTRODUCTION OF BEE SHAREHOLDERS |
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SPEARHEAD PROPERTY GROUP LIMITED - INTRODUCTION OF BLACK ECONOMIC EMPOWERMENT
(`BEE`) SHAREHOLDERS, ACQUISITION OF TWO NEW PROPERTIES AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Spearhead Property Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/005827/06)
Share code: SPE ISIN: ZAE000019162
(`Spearhead` or `the company`)
INTRODUCTION OF BLACK ECONOMIC EMPOWERMENT (`BEE`) SHAREHOLDERS, ACQUISITION OF
TWO NEW PROPERTIES AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1 Introduction
Further to the cautionary announcement dated 19 January 2005 the company is
proud to announce that it has, in principle, concluded certain BEE transactions
with a number of parties to acquire, in terms of a general authority to issue
linked units for cash granted at the company`s annual general meeting held on 8
December 2004, linked units in the company (`the cash issue`), as set out in
paragraph 2 below.
The company has also concluded two new property acquisition transactions to
bolster its commercial property portfolio, as set out in paragraph 3 below.
2 BEE TRANSACTIONS
2.1 Background to the BEE shareholders
2.1.1 Ngatana Property Investments (Proprietary) Limited (`Ngatana`) is a
Western Cape-based empowerment company whose shareholders include:
2.1.1.1 Seena Marena Investments (Proprietary) Limited, a company founded by
Lance Manala, a leading black businessman who is also the chairman of Prescient
Investment Management (Proprietary) Limited;
2.1.1.2 Prescient Real Estate (Proprietary) Limited;
2.1.1.3 Inkari Basadi (Proprietary) Limited; and
2.1.1.4 Sakhikamva Investments (Proprietary) Limited (`Sakhikamva`), the
shareholders of Sakhikamva include The Big Issue, The Black Sash Trust and
Ikamva Labantu (`The future of our nation`).
2.1.2 Abu Varachhia who is the chief executive of a firm of quantity surveyors,
Letchmiah, Daya and Varachhia.
2.1.3 The Public Investment Commissioners (`PIC`).
2.2 The cash issue
2.2.1 Ngatana will subscribe for a total of 3 500 000 linked units as follows:
- 980 000 linked units in terms of the cash issue; and
- 2 520 000 linked units in terms of the vendor placing as set out in paragraph
3 below
representing 12.80% of the total number of linked units in issue after the cash
issue and the vendor placing, at an issue price of R15.50 per linked unit. The
issue price represents an 8.82% discount to the weighted average trading price
of Spearhead linked units on the JSE Securities Exchange South Africa (`the
JSE`) for the 30 business days prior to 8 December 2004.
2.2.2 Varachhia will subscribe for 1 000 000 linked units representing 3.66% of
the total number of linked units in issue after the cash issue and the vendor
placing, at an issue price of R15.50 per linked unit. The issue price represents
an 8.82% discount to the weighted average trading price of Spearhead linked
units on the JSE for the 30 business days prior to 8 December 2004.
2.2.3 The PIC will subscribe for 1 250 000 linked units representing 4.57% of
the total number of linked units in issue after the cash issue and the vendor
placing, at an issue price of R16.00 per linked unit. The issue price represents
a 5.88% discount to the weighted average trading price of Spearhead linked units
on the JSE for the 30 business days prior to 8 December 2004.
2.2.4 The transactions referred to above are all subject to the conclusion of
relevant comprehensive agreements and the approval of the JSE or any other
regulatory authority for the implementation of the relevant transactions.
2.3 Subscription consideration
The subscriptions will be paid for in cash against issue. All of the parties
subscribing are either self funding or have arranged and secured their own
funding to enable them to participate in the empowerment transaction.
2.4 Rationale
2.4.1 The primary reasons for the cash issue are:
2.4.1.1 to achieve a significant black economic empowerment profile and in so
doing the company will take a lead amongst its peers.
2.4.1.2 to further capitalise the company and so enable it to pursue further
opportunities and expand its property portfolio.
2.4.1.3 to promote the transformation of the management of the company through
key black appointments.
3 PROPERTY ACQUISITIONS
3.1 Property transactions
The company has entered into independent agreements for the acquisition of two
new properties (`the property acquisitions`), details of which are set out
hereunder:
Purchase Effective
Property Price (Rm) Date Vendor
Manhattan/Omnipark R42.00 Registration Erf 1559
of Transfer Montague
Gardens Trust
Viking Park R29.60 Registration of Picardi Holdings
Transfer Limited
3.2 Consideration for the property acquisitions
3.2.1 Manhattan/Omni Park
The consideration for the acquisition of Manhattan/Omni Park, being R42 million
will be paid in cash raised substantially through a vendor consideration
placement to Ngatana (`the vendor placing`). The vendor placing will comprise
the issue of 2 520 000 linked units to Ngatana at R15.50 per linked unit (`the
issue price`). The issue price represents an 8.82% discount to the weighted
average traded price of Spearhead linked units on the JSE over the 30 business
days prior to 8 December 2004. The balance of R2.94m will be settled in cash
making use of Spearhead`s available cash resources.
The acquisition and the vendor placing are subject to the fulfilment of the
following suspensive conditions:
- Approval being granted by the Competition Authorities; and
- Approval being granted by the JSE for the listing of the Spearhead linked
units subscribed for by Ngatana.
3.2.2 Viking Park
All conditions precedent relating to the acquisition of the Viking Park property
have been fulfilled and the purchase consideration will be settled in cash out
of the company`s available cash resources and its borrowing facilities.
3.3 Rationale for the property acquisitions
In line with the company`s long-term objective to grow the quality of its
property portfolio and further enhance its tenant mix and diversity, the company
has embarked on a policy of selectively acquiring additional properties.
4. FINANCIAL EFFECTS OF THE CASH ISSUE AND THE PROPERTY ACQUISITIONS
The pro forma unaudited financial effects of the cash issue and the property
acquisitions, which are the responsibility of the company`s directors, set out
in the table below have been prepared solely to illustrate the effects of the
cash issue and the property acquisitions on the company. Because of their
nature, the pro forma financial effects may not necessarily represent or
indicate sustainable earnings or future profits of the company or give a fair
reflection of the company`s financial position after the cash issue and property
acquisitions or the effect thereof on future earnings.
Before the After the
cash issue cash issue
and the but before
property the property %
acquisitions acquisitions change
Note i ii
Headline earnings per
linked unit (cents) 117.55 111.66 (5.01)
Net asset value per
linked unit (rands) 14.36 14.53 1.18
Weighted average number
of linked units
in issue (`000) 20 353 - 23 583
After the
cash issue After the After the
but before acquisition acquisition
the property of Manhattan % of Viking %
acquisitions Plaza change Park change
Note ii iii iv/v
Headline earnings per
linked unit (cents) 111.66 110.00 (1.49) 111.13 (0.47)
Net asset value per
linked unit (rands) 14.53 14.62 0.62 14.62 0.62
Weighted average
number of linked
units in issue (`000) 23 583 26 103 - 26 103 -
Notes:
i. The `Before the cash issue and property acquisitions` column is based on the
reviewed results of Spearhead for the six months ended 31 December 2004.
ii. The `After the issue for cash but before the property acquisitions` column
is based on the reviewed results of Spearhead for the six months ended 31
December 2004 and the issue of 3 230 000 linked units for R50 690 000 on 1 July
2004.
iii. The `After the acquisition of Manhattan Plaza` column is based on the
reviewed results of Spearhead for the six months ended 31 December 2004, the
issue of a total of 5 750 000 linked units for R89 750 000 and the acquisition
of Manhattan Plaza for R42m.
iv. The `After the acquisition of Viking Park` column is based on the reviewed
results of Spearhead for the six months ended 31 December 2004, the issue of a
total of 5 750 000 linked units for R89 750 000, the acquisition of Manhattan
Plaza for R42m, and the acquisition of Viking Park for R29.6m.
v. An interest rate of 9.5% p.a. has been assumed for borrowings.
5. Withdrawal of cautionary announcement
Having regard to the information contained in this announcement the cautionary
announcement dated 19 January 2005 is hereby withdrawn.
Cape Town
15 February 2005
Sponsor
Bridge Capital
Attorneys
Hofmeyr
Date: 15/02/2005 05:31:44 PM
Produced by the JSE SENS Department
