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PRA
PRA
Paraprop - General issue of linked units for cash
PARAMOUNT PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1945/019928/06)
Share code: PRA
ISIN: ZAE000028577
("Paraprop" or "the Company")
GENERAL ISSUE OF LINKED UNITS FOR CASH
1. Introduction.
Linked unitholders are advised that Paraprop has issued a total of 31
150 000 linked units for cash, in terms of the general authority to
issue shares for cash granted by Paraprop linked unitholders at the
annual general meeting held on Friday, 24 February 2006 ("the cash
issue").
The rationale for this issue is that the company has acquired 17
properties during the course of the current year, for a total
consideration of R723 million. Part of the purchase consideration for
these acquisitions is being funded by bond finance and the balance
through equity, which has been raised through a combination of vendor
placements and the current cash issue.
2. Consideration and number of new Paraprop linked units issued in terms
of the cash issue
In total, 31 150 000 linked units were issued at a price of 646 cents
per linked unit, inclusive of an interest distribution of 26 cents per
linked unit. The linked units were issued at a premium of 11 cents
(1.8%) over the 30 day volume weighted average price prior to 11
August 2006, being the date the Board approved the cash issue.
A total cash amount of R201 229 000 has been raised in terms of the
cash issue and the new Paraprop linked units issued in terms of the
cash issue rank pari passu with the existing issued linked units in
issue, including the right to distribution for the period ending 31
July 2006.
3. Financial effects of the cash issue
The pro forma financial effects of the cash issue on earnings
("EPLU"), headline earnings ("HEPLU"), net asset value ("NAV") and
tangible net asset value ("NTAV") per linked unit are set out below.
This unaudited pro forma financial information has been prepared for
illustrative purposes only and because of its nature may not give a
fair reflection of Paraprop"s financial position and results of
operations, nor the effect and impact of the cash issue going forward
and is the responsibility of Paraprop"s directors.
Before After Change
(1) (2) (%)
EPLU (cents) 27.9 28.0 0.3
HEPLU (cents) 25.4 25.9 1.9
NAV (cents) 526 538 2.2
NTAV (cents) 525 538 2.5
Number of shares for EPLU and 173 274 204 424 -
HEPLU purposes ("000)
Number of shares for NAV and 198 862 230 012 -
NTAV ("000)
Notes:
1. Based on Paraprop"s unaudited results for the six months ended 30
April 2006.
2. Based on the assumption that the cash issue took place on 1
November 2005 for income statement purposes and on 30 April 2006
for balance sheet purposes.
3. After taking into account the adjustment for a reduced interest
expense as a result of the R201,229 million cash amount raised in
terms of the cash issue being used to reduce Paraprop"s short
term borrowings. The reduced interest expense was arrived at by
using 10.56%, being the average interest rate incurred by
Paraprop on its long-term borrowings for the six months ended 30
April 2006.
Cape Town
5 October 2006
Investment bank and sponsor
Nedbank Capital
Date: 05/10/2006 11:16:04 AM Produced by the JSE SENS Department
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