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ApexHi Properties Limited - Financial effects of the
acquisition by apexhi of the entire business of prima
property trust, salient dates and withdrawal of cautionary
announcement
ApexHi Properties Limited
(Registration No. 1999/000238/06)
Share codes: APA ISIN codes: ZAE000033064
APB ZAE000033072
(`ApexHi`)
FINANCIAL EFFECTS OF THE ACQUISITION BY APEXHI OF THE ENTIRE
BUSINESS OF PRIMA PROPERTY TRUST, SALIENT DATES AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
INTRODUCTION
On 21 July 2005 ApexHi announced on SENS its acquisition of
the business comprising the property portfolio of Prima
Property Trust (`Prima`), for a purchase price of
R996,2 million, subject to certain conditions precedent (the
`acquisition`).
The financial effects of the acquisition and salient dates
are set out below.
FINANCIAL EFFECTS
The pro forma financial effects of the acquisition on the
historical earnings, headline earnings, net asset value and
tangible net asset value per combined unit comprising one
ApexHi A and one ApexHi B unit (`combined unit`) are set out
below. The financial effects have been calculated utilising
ApexHi`s published audited results for the financial year
ended 30 June 2005 (`ApexHi results`) on the assumption that
the acquisition occurred, for earnings and headline earnings
purposes, on 1 July 2004 and for net asset value and
tangible net asset value purposes, on 30 June 2005. These
financial effects are prepared for illustrative purposes
only and may not fairly represent ApexHi`s financial
position and results of its operations.
Pro forma Pro forma %
before after Change
acquisitio acquisitio
n n
(cents) (cents)
Earnings per combined unit 497.08 446.47(2) (10,18
)
Headline earnings per
combined unit 222.50 211.58(3) (4,91)
Net asset value per combined
unit 1533.31(1) 1610.60(4) 5,04
Net tangible asset value per 1533.31(1) 1610.60(4) 5,04
combined unit
The earnings and headline earnings per combined unit after
the acquisition as indicated in the table above are not
representative of the forward earnings and headline earnings
of ApexHi after the acquisition for the following reasons:
* the additional gearing raised and units issued in
consideration for the Ellerine Holdings and Standard
Bank property portfolio acquisitions (as announced on
SENS on 28 October 2004 and 6 January 2005,
respectively) have been taken into account in the Prima
results and the calculation of financial effects whereas
the income earned from these portfolios has only been
included in the Prima results for some of the period,
being six months in respect of the Ellerine Holdings
portfolio and four months in respect of the Standard
Bank portfolio. Both of these acquisitions were earnings
enhancing for Prima.
* The Prima audited results for the year ended 30 April
2005 (`Prima results`) include a management fee of 0.75%
per annum based on the market capitalisation plus
borrowings (`enterprise value`) of Prima whereas ApexHi
will pay 0.5% per annum of enterprise value of ApexHi on
the acquisition. This represents a saving for ApexHi of
approximately R2.2 million.
* ApexHi will pay a lower weighted average interest rate
on its borrowings in the next financial year.
* Savings in respect of the rationalisation of the
property management and other operating costs have not
been accounted for.
(1) The historical net asset value and tangible net asset
value per combined unit as set out in the `before
acquisition` column of the table are based on ApexHi`s
audited balance sheet at 30 June 2005 (`ApexHi`s audited
balance sheet`), in which the property portfolio is stated
at fair value.
(2)The historical earnings per combined unit as set out in
the `after acquisition` column of the table, is based on
the assumption that the acquisition was settled by the
payment of R236 277 000 in cash and the issue of
37 989 144 combined units. In addition, the following
adjustments have been made:
* the Prima results have been aggregated with the
ApexHi results. No adjustment for the straight
lining of income from leases has been made in the
Prima results as the adjustment is not expected to
be material to ApexHi;
* additional interest amounting to R3 725 000 has been
raised on the additional borrowings for the
acquisition as well as costs at a weighted average
interest rate of 9.28% per annum.
(3)The historical headline earnings per combined unit as
set out in the `after acquisition` column of the table,
has been calculated in the manner described for the
historical earnings per combined unit but includes the
headline earnings adjustments indicated in the ApexHi
results as well as the additional fair value adjustments
relating to the Prima properties in the Prima results.
(4)The historical net asset value and tangible net asset
value per combined unit as set out in the `after
acquisition` column of the table, are based on the
assumption that the acquisition was settled by the
payment of R236 277 000 in cash and the issue of the
37 989 144 combined units at R20 per combined unit on 30
June 2005. In addition, the following adjustments have
been made:
* the acquisition value of the Prima properties at
R996 060 000 has been aggregated with the ApexHi
audited balance sheet; and
* the assumed total costs of implementing the
acquisition and winding up of Prima of R20 026 000,
which have been either written off to share premium
or capitalised to the Prima properties, are assumed
to have been incurred on 30 June 2005.
SALIENT DATES
Circular to be posted on or about 5 September 2005
Anticipated effective date 1 October 2005
Listing of RLAs* on or about 17 October 2005
Listing of consideration units on or about 21 November 2005
* The tradeable renounceable letters of allotment to be
issued to Prima unitholders, given the agreement to delay
listing of the consideration units until after the record
date for ApexHi`s distribution period ending on the day
prior to the effective date.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
As the financial effects have now been published, ApexHi
unitholders are no longer required to exercise caution in
their dealings in ApexHi combined units.
Rosebank
5 August 2005
Corporate advisor, legal advisor and sponsor to ApexHi
Java Capital (Proprietary) Limited
Reporting accountants and auditors
Grant Thornton
Chartered Accountants and Auditors
Date: 05/08/2005 05:43:42 PM
Produced by the JSE SENS Department
