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Alpina - Acquisition And Disposal Of Properties, Change Of Control And
Release Date: 10/03/2005 17:56:26 Code(s): ALA
Alpina - Acquisition And Disposal Of Properties, Change Of Control And
Cautionary
Alpina Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1997/21085/06)
Share Code: ALA ISIN: ZAE000048377
(`Alpina` or `the company`)
ACQUISITION AND DISPOSAL OF PROPERTIES, CHANGE OF CONTROL AND CAUTIONARY
Introduction
Imara Corporate Finance South Africa (Pty) Ltd is authorised to announce that
Alpina, with the approval of its board of directors, has entered into
agreements, which if implemented, with various parties will result in:
- The acquisition of a R225 000 000 property portfolio;
- A change in control of Alpina and a restructure of its equity and debenture
capital;
- The disposal of two wholly-owned subsidiaries of Alpina, which own the
existing property portfolios; and
- A change of name to Orion Real Estate Limited.
Disposal of property portfolios
On 8 December 2004, an agreement was signed between Alpina and Bonatla Property
Holdings Limited (`Bonatla`) in terms of which Bonatla will acquire the entire
issued share capital and loan accounts of two of the principal property owning
subsidiaries of Alpina, i.e. Ixia Trading 532 (Pty) Limited (`Ixia`) and Gold
Edge II (Pty) Limited (`Gold Edge II`), for a total consideration of R1 533 774
to be settled by the repurchase of the 9 022 199 `b` class Alpina linked units
at 17 cents per linked unit.
The effective date of the Bonatla transaction is 7 January 2005, subject to the
successful conclusion of various conditions precedent.
Ixia and Gold Edge II own the following properties located in Johannesburg
(except where indicated otherwise):
Bonatla House offices in Edenvale, Erkurhuleni;
Merino Avenue warehouse in City Deep;
John Street warehouse in Selby;
Gothic House building in Linden;
Hendrik Verwoerd Drive offices and retail in Kensington B, Randburg;
Lepus Road warehouse in Crown Mines;
Spoornet House offices in Braamfontein;
Standard Bank offices in Bramley;
VLC House offices in Rivonia;
Manchester Park warehouse in Pinetown, KwaZulu Natal;
SAB Building warehouse complex in Isando, Erkurhuleni; and
Bond Street Centre office and retail complex in Kensington B, Randburg.
The investment valuations of the properties at 30 June 2004 amounted to R102 900
000 and the mortgage bonds outstanding at that date amounted to R99 900 000.
In the year ended 30 June 2004, the above portfolio reflected an operating loss
before tax of R519 000, before fair value adjustments to investment properties.
Bonatla, through Ixia and Gold Edge II, will assume trade creditors of R2 500
000 as at 7 January 2005.
Acquisition of property portfolio
On 11 February 2005, Alpina entered into a number of agreements with various
companies within the Orion Group of companies, in terms of which Alpina will
acquire the Orion property portfolio for R225 000 000, payable in cash to the
extent of R125 000 000 and by the issue of 588 235 294 linked units in Alpina at
17 cents per linked unit (equivalent to a total value of R100 000 000). The
acquisitions are accepted from the date of transfer of the properties. One of
the agreements, as indicated below, is due to be signed shortly.
The principal shareholders of the Orion Group are Mr Franz Gmeiner and his
family interests.
The properties, all of which are located in Gauteng, that being acquired,
comprise:
Properties Acquisition Price
(Rands)
Waterford Shopping Centre, Fourways 35 400 000
ACA Krans, Offices in Auckland Park 38 200 000
Primrose Mall and Meyers Building, retail, Germiston 11 300 000
Devonshire House, hotel, offices and retail, Braamfontein 27 200 000
Northcliff Atrium Centre, offices and retail, Northcliff 8 200 000
Wendywood Shopping Centre, Wendywood 12 800 000
Intec House, 130 Marshall Street, Johannesburg 3 200 000
Laser Park industrial complex, Laser Park, Roodepoort 26 500 000
Eastgate Gardens Commercial Park, Marlboro 28 000 000
Orion Centre, retail and flats, Edenvale (this agreement is 34 200 000
to be signed once audited accounts are finalised)
225 000 000
The Orion Group portfolio is being acquired based on a projected net income
(rentals less operating costs) yield of 13,5% and assuming that interest at
10,5% per annum would be payable on mortgage bonds.
Other Property disposals
Prior to the signing of the agreements entered into with Bonatla, Ixia had
entered into agreements to dispose of the following two properties, the proceeds
of which will be paid to Alpina by Ixia through the repayment of loan accounts
and are not part of the transaction with Bonatla:
Profurn House in Braamfontein, Johannesburg:
Selling price: R9 000 000
Mortgage bond: R5 349 291
Buyer: 14 Stars Property Investment CC
Delta City, Salisbury Claims, Johannesburg:
Selling price: R2 500 000
Mortgage bond: R2 500 000
Buyer: Factaprops 52 (Pty) Limited
Rationale for the transactions
The objective of the board of Alpina has been to grow the portfolio into a
significant listed property owning group through acquisitions of properties that
will generate positive cash flows, and at the same time to dispose of those
properties that do not fit the profile that the board of directors intends
achieving.
In terms of the negotiations to acquire the Orion portfolio, it was decided to
dispose of the Ixia and Gold Edge II portfolios. The negotiations with Bonatla
results in the decision to sever all relationships with Bonatla and its
shareholders by the repurchase of the linked units owned by Bonatla in Alpina.
At the time of Alpina`s acquisition of the Ixia portfolio in July 2003, it was
envisaged that Bonatla would distribute its holding in Alpina to its
shareholders.
Conditions Precedent
All the above agreements are subject to the normal terms and conditions
applicable to agreements of this nature, including but not limited to:
- The approval of the shareholders of Alpina, and in the case of Bonatla, in
general meeting; and
- Alpina, and in the case of Bonatla, complying with the rules and requirements
of the JSE Securities Exchange South Africa (`JSE`), the Securities Regulation
Panel and the Competition Commission.
- Alpina raising mortgage bonds against the properties in order to meet the cash
payment.
Irrevocable undertakings
Bonatla has given Alpina an irrevocable undertaking that it will vote in favour
of the resolutions to give effect to the transactions.
Shareholders of Alpina holding 74,3% of the `a` class linked units have given
irrevocable undertakings to vote in favour of the transactions.
Restructure of Linked Units
It is proposed that in order to simplify the capital structure of Alpina, a
bonus issue of linked units will be made to the existing holders of the `a`
class linked units on the basis of one new `a` class linked unit for every one
linked unit held and that the different classes of linked units in Alpina will
be consolidated into one class of linked unit ranking pari passu in all respects
with all the existing and future linked units in issue.
In addition it will be proposed to increase the authorised capital of Alpina to
ensure the growth of the company.
These proposals are conditional upon the various agreements referred to above
being unconditionally implemented.
Offer to Minorities
In terms of a ruling of the Securities Regulation Panel, a resolution will be
proposed to the `a` class linked unit holders that they will waive an offer that
may be required to be made by the Orion Group of companies.
The holders of 74,3% of the `a` class linked units have provided Alpina with
written undertakings not to accept any mandatory offer required to be made or
made by the Orion group and to vote in favour of the resolution to waive the
offer.
Financial Effects of the transactions on the Linked Unit Holders
The financial effects have been calculated for each of the transactions based on
the audited accounts of Alpina at 30 June 2004 and / or based on the following
assumptions:
- All the agreements referred to above are declared unconditional and are
implemented;
- The effective date of all the transactions is the first day of the financial
year ended 30 June 2004, irrespective of the date of implementation; and
- All Alpina linked units are converted into one class of linked unit once the
`b` class linked units are repurchased by Alpina, with effect from the
conclusion of the disposal of Ixia and Gold Edge II, and a bonus issue is made
to the `a` class linked unit holders.
Audited After After After After all After the
June Profurn Delta Ixia and the disposals
2004 City Gold Edge disposals and the
II Orion
acquisition
Income / (88.8) (85.7) (73.3) (21.6) (6.1) 2.7
(Loss) per
unit
(cents)
Change 3.5% 17.4% 75.7% 93.2% 103.1%
Headline 8.1 (2.8) 7.0 (14.9) (53.6) 2.0
income /
(loss) per
unit
(cents)
Change (135.0)% (13.6)% (283.3)% (760.2)% (75.3)%
Net 18.4 21.7 25.9 (12.1) 0.6 19.3
(tangible)
asset
value per
unit
(cents)
Change 18.0% 40.4% -165.4% 97.0% 4.9%
Linked 18 139 18 139 18 139 9 117 18 234 606 469
units in
issue
(`000s)
It should be noted that the financial effects as calculated have been done for
illustrative purposes and as the base number of linked units is low, the results
of the calculations may not be meaningful.
Change in the composition of the board
The composition of board of directors of Alpina will change once the
transactions referred to above have been implemented.
Circular to Linked Unit Holders
A circular to Alpina linked unit holders is in the process of preparation and
will be posted to linked unit holders of Alpina in due course.
Cautionary Announcement
Linked unit holders are advised to continue to exercise caution in dealing with
their linked units in Alpina.
Sponsor
Imara Corporate Finance
10 March 2005
