| Mon 15 Aug 2005, 16:31 | | Alpina - Update To Previous Announcements |
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Alpina - Update To Previous Announcements And Agreements; Disposal Of Further
Properties; Specific Repurchase Of Linked Units; Update On Circular; And
Withdrawal Of 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`)
UPDATE TO PREVIOUS ANNOUNCEMENTS AND AGREEMENTS; DISPOSAL OF FURTHER PROPERTIES;
SPECIFIC REPURCHASE OF LINKED UNITS; UPDATE ON CIRCULAR; AND WITHDRAWAL OF
CAUTIONARY
1. INTRODUCTION
Imara Corporate Finance South Africa (Pty) Ltd is authorised to announce a
number of changes to announcements previously. The announcements referred to,
are as follows:
On 10 March 2005, Alpina made an announcement on SENS and in the press on 11
March 2005 that inter alia dealt with:
The disposal of two property owning subsidiaries, Gold Edge II (Pty) Ltd (`Gold
Edge II`) and Ixia Trading 532 (Pty) Ltd (`Ixia`), which companies together
owned 12 properties, to Bonatla Property Holdings Ltd (`Bonatla`) for a
consideration of R1 533 774 to be settled by the repurchase of 9 022 199 `b-
class` Alpina linked units at 17 cents per linked unit; and
the acquisition of a portfolio of properties from the Orion Group for R225 000
000 which would result in 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).
- On 11 May 2005, Alpina made an announcement on SENS and in the press on 12 May
2005 that the disposal agreement entered into with Bonatla had lapsed.
New agreements have been entered into, to provide for:
- The disposal of Gold Edge II to ABSA Mortgage Fund Managers (Pty) Limited
(`AMFM`); and
- The disposal of two properties owned by Ixia to Bonatla and the specific
repurchase of the Alpina linked units owned in Alpina by Bonatla.
The agreement with the Orion Group has been amended, which will result in one
property no longer being acquired. In addition, the Orion Group has agreed
conditionally to subscribe for linked units to be issued for cash.
The details of the above agreements, as approved by the board of Alpina are set
out below.
2. DISPOSAL OF GOLD EDGE II AND GENERAL ISSUE OF LINKED UNITS FOR CASH
On 23 May 2005, an agreement was signed between Alpina and AMFM in terms of
which AMFM acquired, with effect from 1 June 2005, the entire issued share
capital and loan accounts of Gold Edge II, a subsidiary of Alpina, for a
purchase price of R100.
The carrying value of the property owned by Gold Edge II, being Erven 440, 441,
442, 443, 465, 540, 541, 546 and 547 Kensington B Township, Randburg, known as
the Bond Street Centre Complex, is R39 300 000 and the first participation
mortgage bond outstanding to Combined Mortgage Nominees (Proprietary) Ltd is R45
000 000.
The conditions of the agreement were that Pace Properties was to be appointed as
the managing agents of the property (been fulfilled); that the directors of
Alpina approve the disposal by 25 May 2005 (been fulfilled); and that the full
rates liability up to 31 May 2005 be settled by Alpina within six months of the
completion date (which date was 15 June 2005), being 17 December 2005. An amount
of R739 000 out of a total of R1 431 000 has been paid by Alpina. In addition,
the disposal is to be ratified by Alpina`s shareholders.
A further condition is that Alpina is to pay R1 200 000 exclusive of VAT to AMFM
in terms of a deed of suretyship whereby Alpina has bound itself in favour of
AMFM in respect of the property owned by Gold Edge II. This amount is to be
settled partially by the issue to AMFM of 3 000 000 Alpina `b-class` linked
units at 20 cents each for a total consideration of R600 000 (regarded as an
issue of shares for cash), and the payment of the balance of R600 000 in cash
within six months of the completion date. The general issue of linked units for
cash has been undertaken in terms of a resolution approved at Alpina`s 2004
annual general meeting held on 14 March 2005, at 20 cents being the price at
which linked units have recently traded.
Rationale: The disposal of the Bond Street Centre complex has been undertaken to
coincide with the expiry of a lease in respect of a major tenant.
3. DISPOSAL OF PROPERTIES TO BONATLA AND SPECIFIC REPURCHASE OF LINKED UNITS
OWNED IN ALPINA BY BONATLA, A RELATED PARTY
On 4 August 2005, a new agreement was signed between Alpina and Bonatla in
terms of which Alpina`s subsidiary, Ixia, will dispose of the following
properties, at the selling prices indicated, with the consideration due to
Alpina being settled by Bonatla assuming the mortgage bonds and Alpina
repurchasing the linked units that Bonatla owns in Alpina:
Selling Mortgage bonds being assumed by
Price Bonatla and Alpina `b-class`
linked units being repurchased
by Alpina
Manchester Park, being R5 500 000 R4 489 182 and 5 222 951 linked
Section 5 of Sectional units
Title SS663/96, Erf 663
Manchester Park, Pinetown
VLC House, being Portion R4 000 000 R3 310 818
9 being a portion of and 3 799 248 linked units
Portion 2 of Erf 19
Edenburg, 326 Rivonia
Boulevard, Rivonia
Total R9 500 000 R7 800 000
and 9 022 199 linked units
The properties are being sold by an Alpina subsidiary, Ixia, to wholly-owned
subsidiaries of Bonatla with effect from the fulfillment of the various
suspensive conditions. The consideration being attributed to the 9 022 199 `b-
class` Alpina linked units is R1 700 000, equivalent to 18,84 cents per unit.
The suspensive conditions comprise the completion of due diligence
investigations, the approval of mortgage bond facilities and the various
shareholder, JSE Limited (`JSE`), Securities Regulation Panel and Competition
authority approvals. An accompanying settlement agreement entered into on 4
August 2005 between Alpina and Bonatla deals with the assumption by Bonatla of
obligations in respect of the properties relating to tenant installations,
tenant deposits and certificates of electrical compliance. The transaction will
take effect once all of the conditions have been met and transfer of the
properties has been concluded.
Rationale: These agreements also facilitate the dissolution of the relationship
that has historically existed between Alpina and Bonatla.
As the holder of the `b-class` Alpina linked units and the purchaser of the
properties, Bonatla is regarded as a related party in terms of the Listings
Requirements of the JSE. Accordingly, a fair and reasonable opinion will be
obtained from an independent professional expert in relation to the disposal of
properties and the specific repurchase of the linked units. A majority of linked
unit holders other than Bonatla are required to approve the disposal of the
properties and a 75% majority of linked unit holders other than Bonatla, are
required to approve the repurchase of the `b-class` linked units.
4. AMENDMENT TO THE ACQUISITION OF THE ORION PROPERTY PORTFOLIO, SPECIFIC ISSUE
OF LINKED UNITS FOR CASH AND RESULTANT REVERSE TAKE-OVER
As referred to above, Alpina announced on 10 March 2005, that it had entered
into a number of agreements with various companies within the Orion Group to
acquire the Orion property portfolio for R225 000 000, payable in cash to the
extent of R125 000 000 (to be funded by the raising of mortgage bonds) 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 agreements in respect of all of the properties being acquired have been
extended in terms of addenda signed on 31 May 2005, except for the Waterford
Shopping Centre agreement. Accordingly, Alpina will no longer acquire this
property. Further, the Orion Group has agreed to subscribe for 35 300 000 Alpina
linked units at 17 cents each, amounting to R6 001 000 on the condition that the
Orion Group is able to implement the sale of Waterford Shopping Centre. This
specific issue of linked units for cash will require the approval by a majority
of 75% of linked units at the general meeting to be held to approve the various
transactions referred to in this announcement.
Amendments have been made to the agreement relating to the acquisition of the
Orion Centre property, effectively reducing the mortgage bond to be assumed and
increasing the number of linked units to be issued, as set out in the table
below.
With regard to the acquisition of the Orion property portfolio, the financing
arrangements have been concluded.
As announced on 10 March 2005, the Orion property portfolio is being acquired on
a projected net income (rentals less operating costs) yield of 13,5% (for the
year to 31 October 2005) to the acquisition prices for the property portfolio
being acquired and assuming that interest at 9,5% per annum would be payable on
mortgage bonds.
The table below sets out and reconciles the amendments made in acquiring the
Orion property portfolio:
Previous Adjustments Adjusted Summary of
Agreement to Orion for Revised
Centre Waterford Agreement
(company) Shopping
acquisition Centre
not being
acquired
Purchase R225 000 Property R189 600 000
consideration 000 of R35
for the Orion 400 000
property not being
portfolio acquired
Payable in R125 000 R3 210 000 Decrease R103 190 000
cash against 000 decrease in of R18
registration mortgage 600 000
of mortgage bond mortgage
bonds bond
Issue of R100 000 Increase of Decrease R86 410 000
Alpina linked 000 being R3 210 000 of R16 being 508 294
units for the 588 235 being 18 882 800 000 118 linked units
balance at 17 294 353 linked being 98
cents each linked units 823 529
units linked
units
Subscription Cash of R6 001
of R6 001 000 000 raised
at 17 cents through the
per linked issue of 35 300
unit 000 linked units
The effect of the acquisition of the Orion property portfolio and the specific
issue of linked units for cash is that the Listings Requirements of the JSE
relating to a Reverse take-over will apply. Alpina is required to prepare a
Category 1 circular and revised listing particulars which is to be sent to be
shareholders within 28 days of this announcement. This circular will advise
linked unit holders whether or not the JSE will continue to grant a listing to
Alpina if linked unit holders approve this acquisition. Linked unit holders are
therefore alerted to this uncertainty of a continued listing.
5. FINANCIAL EFFECTS
The financial effects of the disposal of Gold Edge II, the disposal of
properties to Bonatla, the repurchase of linked units and the amendment of the
Orion Group transaction are set out below. The calculations have been based on
Alpina`s interim results for the six months ended 31 December 2004.
In respect of the Gold Edge II disposal, the income statement has been adjusted
as if the disposal occurred at the beginning of the six month period and
assuming that the 3 000 000 units had been in issue for the full period. Similar
assumptions apply to the disposal of properties to Bonatla and the repurchase of
9 022 199 units.
In respect of the Orion Group acquisition, projected income for a six month
portion of the year ended 31 October 2005 has been accounted for. The financial
effects also take into account income at 9,5% per annum on the R6 001 000
subscription for linked units.
It should be noted that the financial effects as calculated have been done for
illustrative purposes only over a six month period based on the low number of
linked units in issue. Accordingly, the results of the calculations may not be
meaningful.
Earnings Headline Net (and Number of
per unit earnings per tangible) linked units
(cents) unit (cents) asset in issue
value per
unit
(cents)
Interim Results for (7.3) (16.7) 15.2 18 139 125
the six months
ended 31 December
2004
After Gold Edge II (11.8)) (21.2) 21.3 18 139 125
disposal before
issue of linked
units for cash
Change % (61.5) (26.9) 40.2
After Gold Edge II (10.1) (18.2) 18.3 21 139 125
disposal and issue
of linked units for
cash
Change % (38.6) (8.9) 20.3
After disposal of (9.2) (17.2) 25.9 21 139 125
properties to
Bonatla before
specific repurchase
of linked units
Change % (25.4) (3.2) 70.1
After disposal of (16.0) (30.0) 31.1 12 116 926
properties to
Bonatla and
specific repurchase
of linked units
Change % (118.8) (80.0) 104.5
After Orion Group 1.1 1.1 18.6 529 527 970
acquisition, as
amended before
issue of linked
units for cash
Change % 115.9 106.9 21.9
After Orion Group 1.1 1.1 18.5 564 827 970
acquisition, as
amended including
issue of linked
units for cash
Change % 115.6 106.8 21.6
6. UPDATE ON CIRCULAR AND REVISED LISTINGS PARTICULARS AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
As negotiations have been concluded, a circular and revised listings particulars
to unit holders is being prepared and it is expected that it will be mailed
within 28 days. The cautionary announcement is accordingly being withdrawn.
Sponsor
Imara Corporate Finance South Africa (Pty) Limited
15 August 2005
Date: 15/08/2005 04:15:08 PM
Produced by the JSE SENS Department
