| Fri 1 Apr 2005, 16:35 | | ACQUISITION OF A 50% IN WILLOWBRIDGE RETAIL CENTRE |
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Pangbourne Properties Limited - Acquisition Of A 50% Undivided Share In
Willowbridge Retail Centre, Bellville
PANGBOURNE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
(Share code: PAP ISIN: ZAE000005252)
(`Pangbourne`)
ACQUISITION OF A 50% UNDIVIDED SHARE IN WILLOWBRIDGE RETAIL CENTRE, BELLVILLE
1.INTRODUCTION
Pangbourne combined unitholders are advised that agreement has been reached
between Newshelf 769 (Proprietary) Limited, a wholly-owned subsidiary of
Pangbourne, (`the purchaser`) and Mini-Cape Developments (Proprietary) Limited
(`MCD`)in terms of which the purchaser will acquire a 50% undivided share in Erf
38722 (a portion of Erf 21750), Belville, Cape Town (`the property`) from MCD
(`the transaction`) on the basis that MCD will, at its own cost and risk,
complete the development on the property of an upmarket convenience and
lifestyle-focused shopping centre, to be known as Willowbridge, (`Willowbridge`)
and that Pangbourne will be given a preferential opportunity to be appointed as
the manager of Willowbridge. The transaction is subject to the fulfilment of
certain conditions precedent as set out in paragraph 4 below.
2.THE RATIONALE FOR THE TRANSACTION
The transaction is in line with Pangbourne`s strategy of acquiring quality
properties that contribute to consistent growth in distributions to combined
unitholders.
3.PURCHASE CONSIDERATION
The purchase consideration will comprise two components, namely:
- a component calculated at a multiple of 10 on 50% of the anticipated net
rental (excluding turnover rental) earned from Willowbridge for the first year
following its completion, which anticipated net rental will be determined prior
to the date of transfer with reference to contractual rentals and anticipated
rentals in respect of any vacant space. MCD has guaranteed the first years` net
rental to the purchaser; and
- a component calculated at a multiple of 10 on 50% of the turnover rental from
Willowbridge for the first and second years (following completion of
Willowbridge), which component will not exceed R15 million.
The current estimate of the purchase consideration, based on market-related
rental rates, leases currently under negotiation and the maximum turnover based
portion of the price, is R171.1 million. The first component of the purchase
consideration, less a retention fund (`retention fund`) and less an income
reserve (`income reserve`)and will be settled in cash against transfer of the
50% undivided share to the purchaser, by the purchaser utilising existing
banking facilities within the Pangbourne group. In as much as the purchaser will
be paying a portion of the purchase consideration before the development of
Willowbridge is completed, MCD has undertaken to pay the purchaser interest on
such prepayment.
The retention fund will be paid progressively, after such transfer, with
reference to the level of completion of Willowbridge. The income reserve will be
paid progressively in quarterly instalments, after transfer of the 50% undivided
share to the purchaser, such instalments being calculated with reference to
vacant space in Willowbridge which becomes let, the final instalment being
payable on the same date as the rental guarantee amount is payable by MCD to the
purchaser.
The second component of the purchase consideration will be settled within 7
business days of the determination of such turnover rental.
4.CONDITIONS PRECEDENT TO THE TRANSACTION
The transaction is subject to the conclusion of a written co-ownership agreement
between the purchaser and MCD (which will govern the respective rights and
obligations of MCD and the purchaser as co-owners of the property) and the
completion of a satisfactory due diligence investigation by the purchaser within
21 business days of signature of the agreement governing the transaction and,
inter alia, the following conditions precedent:
- unconditional approval of the agreement governing the transaction by the
boards of directors of MCD, the purchaser and Pangbourne, respectively;
- MCD delivering a shareholders` resolution in terms of section 228 of the
Companies Act, approving the transaction;
- unconditional approval of the relevant Competition Authorities to the
transaction;
- MCD advertising the transaction in compliance with section 34 of the
Insolvency Act 24 of 1936 and no consequences (adverse to the purchaser) arising
therefrom;
- an independent quantity surveyor confirming to the purchaser on or before 31
January 2006 that at least 80% of the building and completion costs of
Willowbridge have been incurred;
- the purchaser being furnished with satisfactory proof that all amounts due and
payable for services rendered and/or goods or materials supplied in connection
with Willowbridge up to such level of completion have been paid in full;
- the minimum requisite leases, as set out in the agreement governing the
transaction, have been concluded on or before 30 June 2005 (or such later date,
but not later than 31 January 2006). The main components required in order to
satisfy this condition are that:
- 80% of the lettable area of Willowbridge has been let; and
the anchor tenants have signed for at least 10 000 square metres of lettable
area;
- the purchaser being satisfied, on or before 31 May 2005, that suitable
insurance cover is in place in respect of the development of Willowbridge;
- that on or before 31 May 2005, ABSA Bank Limited (`ABSA`)agrees to release the
undivided half share from the existing mortgage bond registered over the
property in favour of ABSA; and
- that the City of Cape Town grants its unconditional consent for the transfer
of the 50% undivided share from MCD to the purchaser.
5.EFFECTIVE DATE, WARRANTIES AND ADJUSTMENT ACCOUNT
Risk and benefit in respect of the 50% undivided share in the property will pass
to the purchaser on the date of registration of transfer thereof in the name of
the purchaser.
The transaction is subject to warranties and adjustment account provisions that
are normal for a transaction of this nature.
6.FINANCIAL EFFECTS
The pro forma financial effects of the transaction on the earnings, headline
earnings, net asset value and tangible net asset value per Pangbourne combined
unit are not material.
Craighall
1 April 2005
Investment bank and sponsor
STANDARD BANK
Corporate law advisers and consultants
Prinsloo, Tindle and Andropoulos - Attorneys
Auditors and reporting accountants
Deloitte & Touche Chartered Accountants (SA)
Registered Accountants and Auditors
Date: 01/04/2005 04:31:56 PM
Produced by the JSE SENS Department
