| Tue 28 Mar 2006, 17:09 | | Orion - Acquisition of property; |
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ORE
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Orion - Acquisition of property;
Update on transactions previously approved; and
Cautionary announcement
ORION REAL ESTATE LIMITED
(Formerly Alpina Investments Limited)
(Incorporated in the Republic of South Africa
Registration number 1997/021085/06
Share code: ORE & ISIN ZAE000075651
("Orion")
ACQUISITION OF PROPERTY;
UPDATE ON TRANSACTIONS PREVIOUSLY APPROVED; AND
CAUTIONARY ANNOUNCEMENT
Introduction
Imara Corporate Finance South Africa (Pty) Ltd and Bishop Corporate Finance
(Pty) Ltd are authorised to announce that Orion has entered into an agreement to
acquire a commercial property for R33 000 000.
Acquisition of property
Following the approval by unit holders of the Orion Property Portfolio on 15
February 2006, on 24 February 2006 the board of Orion approved an acquisition
agreement that was signed by the Orion Property Holding Trust on 7 December
2005. This agreement relates to the acquisition of The Promenade Nelspruit
Hotel and Shopping Centre ("Promenade") from Liberty Group Limited for R33 000
000 payable on transfer of the property, which is due shortly.
The purchase consideration will be settled through the payment of R6 000 000 in
cash and the raising of a mortgage bond of R27 000 000.
The above retail, offices and hotel property is situated at Louis Trichardt
Street, Nelspruit and comprises gross lettable area ("GLA") of 15 686 m2
comprising retail space 7 274 m2, offices of 3 312 m2 and hotel space of 5 100
m2 with the following major tenants, viz Promenade Hotel, Mr Price, Dunns
Clothing, Shoe City and John Craig collectively occupying 44,8% of the GLA
space. The property is 95% let.
The applicable suspensive conditions, comprising the procurement of mortgage
bond finance and the completion of a due diligence investigation have been
complied with.
Warranties as are usual for such an agreement have been provided for by the
seller.
The acquisition is classified as a Category 3 transaction in terms of the
Listings Requirements of the JSE Limited.
The property is being acquired at a historic net rental income yield of 14,5%
and will accordingly enhance the earnings of Orion and complement the Orion
property portfolio.
Pro forma financial effects of the acquisition
The pro forma financial effects of the Promenade acquisition have been
calculated on the assumption that the property was acquired at the beginning of
the year ended 30 June 2005.
The following table and accompanying notes are the responsibility of the
directors of the company and set out the unaudited pro forma financial effects
of the acquisition. It has been prepared for illustrative purposes only and
because of its nature, may not fairly present Orion"s financial position,
changes in equity, results of operations or cash flows.
Since the publication of the 30 June 2005 audited financial statements, the
composition of Orion"s portfolio has changed considerably and a comparison to
those statements is not considered to be meaningful.
The pro forma financial statements for the Orion group after inclusion of all of
the disposals and acquisitions that were approved at the general meeting held on
15 February 2006 are also reflected in the table below (these pro forma figures
were included in the circular to unit holders dated 23 January 2006). The
comparison of the acquisition of Promenade to these figures is considered to be
more meaningful.
The pro forma financial effects have been prepared in compliance with SAICA
guidelines, GAAP and IFRS.
The financial effects are as follows:
Group Pro forma Pro forma Change
audited after after %
financial Disposals Promenade
statements and Orion acquisition
30 June 2005 Property
Portfolio
Acquisition
Earnings per unit 38,46 3,04 3,13 3,0
(cents)
Headline earnings per (18,24) 0,38 0,64 68,4
unit (cents)
Net asset and Net 77,95 18,28 18,28 0,0
tangible asset value per
unit (cents)
Number of linked units 18 139 564 828 564 828
in issue (`000s)
Update on acquisitions and disposals approved on 15 February 2006
The board wishes to inform unit holders that the acquisition by Orion
(previously named Alpina Investments Limited) of the company owning the Orion
Centre in Edenvale has been concluded and 130 647 058 linked units have been
issued to the Franz Gmeiner group ("FGA").
The property transfers in respect of the balance of the properties acquired and
those being disposed of, are proceeding following Competition Commission
approval of the acquisitions.
Issue of linked units for cash
At the general meeting held on 15 February 2006, unit holders approved the
specific issue of 35 300 000 linked units to FGA at 17 cents per linked unit,
resulting in the raising of R6 001 000 in cash.
Linked units in issue
Following the implementation of the transactions set out above, 187 180 910
linked units are in issue. A further 9 022 199 linked units are subject to a
specific repurchase once the properties being disposed of to Bonatla Property
Holdings Limited, have been transferred. As and when the above-mentioned
property transfers are completed for the balance of the properties being
acquired from FGA, a further 377 647 058 linked units will be issued to FGA.
Cautionary Announcement
Linked unit holders are advised that the board of Orion has entered into
negotiations to dispose of certain properties. Accordingly, unit holders should
exercise caution in dealing with their linked units in Orion until a further
announcement is made.
Sponsor
Imara Corporate Finance
Corporate advisor
Bishop Corporate Finance
28 March 2006
Date: 28/03/2006 05:09:05 PM Produced by the JSE SENS Department
