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HYP
HYP
Hyprop - Hyprop Black Economic Empowerment Initiative
Hyprop Investments Limited
(Registration No. 1987/005284/06)
Share code: HYP & ISIN code: ZAE000003430
(the "Hyprop")
HYPROP BLACK ECONOMIC EMPOWERMENT ("BEE") INITIATIVE
INTRODUCTION AND RATIONALE
Hyprop has entered into various agreements with black owned financial services
group Vunani Capital (Proprietary) Limited, via its subsidiary Vunani Properties
(Proprietary) Limited ("Vunani") to facilitate the establishment of a BEE
property fund known as Vunani Property Investment Fund (Proprietary) Limited
("VPIF"). This transaction is part of Hyprop"s overall BEE strategy and
transformation initiative and is driven by Hyprop"s desire to contribute to
enterprise and skills development in line with the Codes of Good Practice on
Broad-Based Black Economic Empowerment published by the Department of Trade and
Industry and the Property Sector Transformation Charter (collectively, the
"Codes").
OBJECTIVES OF VPIF
Hyprop and Vunani intend to grow VPIF"s property portfolio both in size and
value in accordance with sound investment principles and consistent with the
provisions of the Codes, with a view to it ultimately listing on the JSE
Limited.
ESTABLISHMENT OF VPIF
Each of Hyprop and Vunani have initially committed to sell (or to procure the
sale of) property portfolios to VPIF valued at approximately R175 million
(approximately R350 million in aggregate). VPIF is in the process of negotiating
for the acquisition of additional property portfolios.
The purchase price payable for the Hyprop and Vunani property portfolios will be
settled by VPIF partially in cash and partially by the issue by VPIF of combined
units (comprising an ordinary share linked to an unsecured variable rate
debenture) in VPIF, with the result that Hyprop and Vunani shall, immediately
after the acquisition of the property portfolios, hold 49.8% and 50.2%
respectively of the total issued combined units in VPIF.
The cash portion of the purchase prices shall be funded by way of third party
senior debt funding. Hyprop has agreed to provide credit enhancement to VPIF in
respect of such senior funding for a market related fee payable by VPIF.
ESTABLISHMENT OF A BEE ASSET MANAGER
The asset management of VPIF shall be conducted by a new asset management entity
to be known as The Vunani Property Fund Management Trust, the beneficial
interests in which will be held 51% by a BEE consortium lead by Vunani and 49%
by Hyprop Management Company (Proprietary) Limited, Hyprop"s asset manager. The
Vunani Property Fund Management Trust will provide asset management services to
VPIF on arms-length terms, which will include performance criteria standard for
agreements of this nature.
BEE NATURE OF THE FUND
In recognition of the fact that the establishment of the fund comprises a BEE
initiative, Vunani has undertaken that it will retain its BEE status and
credentials for a period of at least 7 years.
BOARD REPRESENTATION
The VPIF board will initially comprise Chris Nissen (Chairperson), Ethan Dube,
Evelyn Chimombe-Munyoro, Pieter Mackenzie, Pieter Prinsloo, Laurence Cohen and
Nicole Greenstone.
Rosebank
28 March 2006
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 29/03/2006 09:00:08 AM Produced by the JSE SENS Department
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