| Fri 15 Jun 2001, 0:00 | | Acquisition By Gold Edge Of Bond Street Centre And |
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KRIGE BUILDING
GOLD EDGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/021085/06)
("Gold Edge")
ACQUISITION BY GOLD EDGE OF BOND STREET CENTRE AND CISCO SYSTEMS/BOOGERTMAN
KRIGE BUILDING
1 Introduction
Further to the cautionary announcement published in the press on 20 April
2001, Bridge Capital is authorised to announce that, subject to the
conditions precedent detailed in paragraph 4 below, Gold Edge has concluded
the acquisitions of:
* Erf 440 - 443, 465, 540, 541 and 546 Kensington B, Gauteng, known as
"Bond Street Centre", as well as the lease agreements currently in existence
in respect of Bond Street Centre ("the Bond Street acquisition"). Bond
Street Centre is a retail and commercial centre, located at the intersection
of two primary transport routes through Randburg, catering mainly for the
motor trade. Hollard Insurance is the major office tenant; and
* Portion 1 of Erf 5209 Bryanston Ext 64 situated at 15 Georgian Crescent,
Bryanston, known as "Cisco Systems/Boogertman Krige Building", as well as
the lease agreements currently in existence in respect of Cisco
Systems/Boogertman Krige Building ("the Cisco acquisition"). Cisco
Systems/Boogertman Krige Building is an "A" grade office development
situated in a prime position in Bryanston,
collectively, "the acquisitions".
2 Rationale for the acquisitions
As disclosed in the circular to Gold Edge shareholders, dated 20 April 2001,
regarding the acquisition of Killarney Mall, Gold Edge's strategy is to
increase the overall quality of its property portfolio through strategic
acquisitions. The acquisitions are in pursuit of this strategy.
3 Terms of the acquisitions
3.1 The Bond Street acquisition
Gold Edge acquired Bond Street Centre for a total purchase consideration of
R46 000 000, exclusive of VAT, from ABSA Trust Participation Bond Managers
(Proprietary) Limited ("ABSA Trust").
The purchase consideration is payable as follows:
* R1 000 000 in cash on registration of transfer of Bond Street Centre into
the name of Gold Edge; and
* ABSA Trust shall grant to Gold Edge a loan of R45 000 000 secured by a
first participation mortgage bond over Bond Street Centre.
The effective date of the Bond Street acquisition is 31 March 2001.
Warranties normal for a transaction of this nature have been provided by
ABSA Trust.
3.2 The Cisco acquisition
Gold Edge acquired Cisco Systems/Boogertman Krige Building for a total
purchase consideration of R39,1 million, exclusive of VAT, from Acme
Property Developments (Proprietary) Limited ("Acme").
The purchase consideration is payable as follows:
* R38,1 million in cash on the date of registration of transfer;
* Gold Edge will issue Gold Edge ordinary shares to Acme to the value of
R500 000 at the price ruling on the JSE Securities Exchange South Africa
("JSE") on the date of registration of transfer; and
* Gold Edge will assume a portion of Acme's liability to Seeff Commercial
Properties and Knight Frank in the sum of R500 000.
The effective date of the Cisco acquisition is the date of registration of
transfer. Warranties normal for a transaction of this nature have been
provided by Acme.
4 Conditions precedent
The acquisitions are conditional upon the fulfilment of the following
material conditions precedent:
* approval by the Competition Commission and the JSE; and
* approval by Gold Edge shareholders in general meeting.
5 Financial effects of the acquisitions
Gold Edge Pro forma
unaudited after the
results for acquisition
six months of Killarney Mall Pro forma
ended (based on the after the
31 December profit forecast for Bond Street %
2000 Killarney Mall) acquisition
change
Headline earnings/(loss)
per share (cents) (3,23) (2,84) (1,27) 55,18
Earnings per share (cents) 10,91 11,30 12,87 13,87
Net asset value
per share (cents) 18,98 18,98 18,98 -
Weighted average number
of shares 29 013 250 29 013 250 29 013 250
Pro forma
after the Pro forma
Cisco Percentage after the Percentage
acquisition change acquisitions change
Headline earnings/(loss)
per share (cents) (0,67) 76,39 (0,90) 131,58
Earnings per share (cents) 13,47 19,20 15,04 33,07
Net asset value
per share (cents) 18,98 - 18,98 -
Weighted average number
of shares 29 013 250 29 013 250
The table above sets out the pro forma financial effects of the acquisitions
based on Gold Edge's unaudited interim results for the six months ended 31
December 2000, published on Friday, 30 March 2001, taking into account the
acquisition of Killarney Mall. The calculations assume that the acquisitions
had been in effect from 1 July 2000 for the purpose of the earnings per
share and headline earnings per share calculation and the date of
acquisitions for the purpose of the net asset value per share calculation.
The pro forma financial effects of the acquisitions have been based on
forecasts for the 12 months after the effective dates of the acquisitions
using the following assumptions:
* in respect of the Bond Street acquisition, a net rental income from the
Bond Street Centre of R6 348 583 before financing costs, for the 12 months
after the effective date. An effective interest rate of 13,9% has been used
for the mortgage bond (interest only) raised to finance the Bond Street
acquisition. The mortgage bond is R41 million for the first year to 31 March
2002 and R45 million thereafter. Taxation has been provided at 30%; and
* in respect of the Cisco acquisition, a net rental income from Cisco
Systems/Boogertman Krige Building of R5 005 219 before financing costs, for
the 12 months after the effective date. An effective interest rate of 14%
has been used for the R29 000 000 mortgage bond (interest only) to be
raised, and 9% on the vendor liability assumed, to finance the Cisco
acquisition. The weighted average number of shares in issue does not take
into account the shares to be issued as part consideration for the Cisco
acquisition, as the number of shares to be issued will only be determined on
the date of registration of transfer and such number is not expected to be
material. Taxation has been provided at 30%.
6 Circular to shareholders
A circular showing full details of the acquisitions, the financial effects
of the acquisitions and convening a general meeting of shareholders of Gold
Edge, incorporating the necessary resolutions to be passed thereat, will be
sent to shareholders within 28 days of this announcement or such later date
as may be agreed to by the JSE. Shareholders are thus no longer required to
exercise caution when dealing in their shares.
Johannesburg
15 June 2001
Corporate advisor and sponsor
Bridge Capital Services (Pty) Limited
(Registration number 1998/016301/07)
