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SZA
SZA
Sizafika - Acquisition, Proposed BEE Transaction, Change of Sector and
Withdrawal of Cautionary Announcement
Sizafika Property Investments Limited
(Formerly Adonis Knitwear Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1969/002908/06)
Share code: SZA & ISIN: ZAE000080198
("Sizafika or "the company")
ACQUISITION OF PROPERTIES (INCLUDING ACQUISITIONS FROM RELATED PARTIES) FOR
AN AGGREGATE PURCHASE CONSIDERATION OF R580 885 000, ENTERING INTO OF THE
ZILTREX MANAGEMENT AGREEMENT, PROPOSED BLACK ECONOMIC EMPOWERMENT ("BEE")
TRANSACTION, CHANGE OF SECTOR AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the renewal of cautionary announcement dated Tuesday, 19
September 2006, Sizafika linked unitholders are advised that Sizafika
has concluded agreements dated February 2006 - October 2006 with
various vendors ("the vendors") to acquire 67 commercial properties
(the "Property Portfolio") from various vendors (collectively the
"proposed acquisitions"), for an aggregate purchase consideration of
R580 885 000 ("the purchase consideration"). The proposed acquisitions
are subject to the fulfillment of the suspensive conditions as set out
in paragraph 2.4 below. Given that Sizafika has over the period
February 2006 - October 2006 had to renegotiate various terms of the
aforementioned agreements as a result of various changes, including
changes in market conditions, the board of directors of Sizafika ("the
board") considers the timing of announcement of the proposed
acquisitions to now be opportune.
In addition, Sizafika has entered into a Memorandum of Understanding
("MOU") with Indlunkulu Property Investments (Pty) Limited
("Indlunkulu"), in terms of which Indlunkulu will be entitled to
acquire up to 20% of the issued linked units in Sizafika at 300 cents
per linked unit ("the Indlunkulu option").
2. THE PROPOSED ACQUISITIONS
2.1 Rationale for the proposed acquisitions
The proposed acquisitions will provide a base for Sizafika from
which to grow its portfolio while simultaneously yielding
sustainable returns and cashflows for investors.
Sizafika"s objective is to offer growth in income and capital to
its linked unitholders over the medium to long term. In doing so,
Sizafika will seek further acquisition opportunities which will
enhance the quality of the Property Portfolio as well as provide
sustainable growth in distributions to linked unitholders.
Sizafika also seeks to maintain a sectorally well-balanced,
geographically diversified property portfolio. The board is of
the opinion that the proposed acquisitions are in line with such
investment criteria.
2.2 Salient details of the proposed acquisitions
The properties making up the Property Portfolio are mostly "B"
and "C"-grade" commercial properties with a few "A"-grade
properties and a total Gross Lettable Area ("GLA") of 310 141m2.
Most of the properties are situated in Gauteng (76.1% based on
value) and Kwazulu Natal (14.8% based on value), with the
remaining properties located in the Free State, Mpumalanga and
the Northern Cape.
The Property Portfolio consists mainly of office, industrial and
retail buildings. The Property Portfolio has been acquired at an
average forward yield of 11.95%, which is forecast to result in
an annualised distribution yield of 11% or 33 cents per linked
unit. The reporting accountants, Horwath Levitt and Boner, have
provided a report on the forecast income statements for the
periods ending 30 September 2007 and 2008 and a copy of their
report in this regard will be included in the circular referred
to in paragraph 7 below. The effective date of the proposed
acquisitions will be the date of transfer of each property. At
the date of transfer the vacancies will be 3.9% based on GLA. The
bulk of the leases expire between 2006 and 2009.
Details of the properties comprising the Property Portfolio are set out
below:
Physical Gross Vacancy Weighted Purchase Independent
address and Lettable (m2) average Price Market
registered Area rental (R (R"000) valuation
property (m2) per m2) (R"000)
description (Note 2)
1 Goodman Portion 2 1 139 43 116.30 15 500 15 000
Gallery of Erf 976,
163 Jan Smuts Parkwood
Avenue,
Parkwood,
Johannesburg,
Gauteng
2 TBC House Erf 198, 751 0 62.02 6 000 6 000
49 River Woodmead
Road, Ext 1
Woodmead,
Gauteng
3 WSP House Portion 1 1 920 0 108.59 13 900 14 000
Cnr Leeuwkop of Erf
and Simba 1366,
Roads, Sunninghill
Sunninghill, Ext 61,
Gauteng Gauteng
4 Charter House Sections 1 3 624 498 43.13 11 000 11 000
77 Crompton - 11, SS
Street, Charter
Pinetown, House,
KwaZulu Natal Scheme
154/1988,
Erf 1856,
Pinetown
5 Kuit Street Erf 60, 7 649 0 24.24 14 000 16 500
320 Kuit Waltloo
Street,
Waltloo,
Pretoria,
Gauteng
6 Eastside Portion 1, 8 821 695 41.94 28 185 30 000
Corporate Portion 2
Richards and
Drive, Remaining
Halfway Extent of
House, Erf 690,
Gauteng Halfway
House Ext
80 and
Portion 1,
Portion 2
and
Remaining
Extent of
Erf 691,
Halfway
House Ext
93
7 Elite Park Erf 371, 6 799 0 41.82 30 600 31 000
Cnr Suttie Halfway
and James House Ext
Crescent, 35
Richards
Drive,
Halfway House
Ext 35,
Midrand,
Gauteng
8 5 Main Road Erf 1099, 1 531 0 17.96 3 000 2 500
5 Main Road, Florida Ext
Florida Ext,
Roodepoort,
Gauteng
9 Lidonga House Portion 123 819 0 76.44 7 500 5 000
Unit 3, of Erf 711,
Burnside Craighall
Island, 210 Park
Jan Smuts
Avenue,
Craighall
Park,
Johannesburg,
Gauteng
10 GC Star Erf 687, 6 671 0 52.87 28 500 28 500
New Road, Halfway
Grand House Ext
Central, 13
Halfway
House,
Gauteng
11 328 Kent Erf 835, 4 179 0 53.48 15 500 13 100
328 Kent Ferndale
Road,
Randburg
12 Civilia Erf 22081, 6 555 922 25.50 15 000 15 000
Elizabeth Bloemfontei
Street, n
Bloemfontein,
Free State
13 Roban House Erf 192, 3 287 0 35.01 10 500 9 600
178 Erasmus Meyerspark
Street,
Meyerspark,
Pretoria,
Gauteng
14 Market House Erven 9542 3 350 270 59.82 17 800 16 000
Cnr Southey - 9547,
and Transvaal Erven 9552
Roads, - 9556,
Kimberley, Erven 9561
Northern Cape - 9564
Kimberley
15 Tower Centre Erf 3303, 2 776 110 55.32 15 000 16 500
Cnr Charl Standerton
Cilliers and
Burger
Streets,
Standerton,
Mpumalanga
16 Rutland Place Erf 1440, 2 189 0 15.67 2 400 2 800
Cnr F H Germiston,
Odendall and
President
Streets,
Germiston,
Gauteng
17 Allied Portion 2 2 012 0 25.31 3 400 3 200
Building of Erf 545,
Cnr F H Germiston
Odendaal and
Meyer Street,
Germiston,
Gauteng
18 Metro Kuruman Erf 2639, 2 102 0 9.27 1 750 2 200
Voortrekker Kuruman
Street,
Kuruman,
Northern Cape
19 Metro Portion 1 1 596 0 11.43 1 750 2 100
Greytown of Erf 356
117 York and Portion
Street, 4 of Erf
Greytown, 355,
Umvoti, Greytown
KwaZulu Natal
20 Horizon View Erf 293, 20 785 4 768 33.18 53 000 58 000
Shopping Horizon
Centre View
Crane Avenue,
Horizon View,
Roodepoort,
Gauteng
21 Midway Portion 137 3 332 0 32.15 9 200 9 200
Main of the Farm
Vereeniging Harsenbergf
Road, ontein 332
Walkerville IQ
22 Price City Leasehold, 10 416 0 38.67 28 700 28 000
350 Umgeni Lot 12390,
Road, Durban Durban,
Certificate
of
Consolidate
d Title No.
T18676/1995
, leased
from South
African
Rail
Commuter
Corporation
23 Standard Bank Erf 1978, 1 887 0 32.98 6 600 6 500
Springs Springs
5th Street,
Springs,
Gauteng
24 Reuven 02 Erven 1 and 2 307 0 15.45 3 150 3 000
2 Andrea Road 2, Reuven
cnr Booysens
Road, Reuven,
Johannesburg,
Gauteng
25 Richards Portion 218 4 320 0 24.34 7 300 9 200
Drive of the Farm
912 Richards Waterval 5
Drive, IR
Halfway
House,
Midrand,
Gauteng
26 Mayberry Park Erf 13, 1 520 0 19.95 2 150 2 200
1 Onyx Mayberry
Street, cnr Park Ext 1
Onyx and
Delphinium
Streets,
Mayberry Park
Ext 1
Alberton,
Gauteng
27 OK Bazaars Erf 2073, 6 222 0 9.49 5 100 5 300
Roodepoort Roodepoort
Cnr Lambert &
Van Wyk
Street,
Roodepoort
28 Arrowfield Erf 7610, 1 450 0 23.92 2 700 3 300
33 Hillclimb Pinetown
Road, Ext 72
Mahogany
Ridge,
Pinetown Ext
72, Ethekwini
29 Maydon Wharf Leasehold, 24 641 0 25.35 42 000 42 000
187-209 Notarial
Maydon Road, Deeds of
Maydon Wharf, Lease no.s
Durban, 62/1960L,
KwaZulu Natal 47/1960L,
63/1960L
comprising
nine
properties,
Durban, KZN
30 Park Central Erf 116, 8 154 0 12.48 9 500 9 300
03 Park
Broad Street, Central
Park Central,
Johannesburg,
Gauteng
31 Park Central Erven 7 to 11 089 0 10.96 11 200 11 600
04 24, Park
Broad Street, Central
cnr Simmonds
Southway,
Park Central,
Johannesburg,
Gauteng
32 Park Central Erf 124, 4 362 823 17.46 6 6 200
05 Park 300
Wall Street, Central
cnr Simmond
Southway,
Park Central,
Johannesburg,
Gauteng
33 Park Central Erven 50 to 3 313 0 15.99 4 4 100
06 56, Park 600
Wall Street, Central
cnr Amsterdam
Avenue, Park
Central,
Johannesburg,
Gauteng
34 Park Central Erven 65 to 2 706 0 17.47 4 3 890
09 73, Park 100
London Lane Central
and Simmonds
Southway,
Park Central,
Johannesburg,
Gauteng
35 Park Central Remaining 4 564 0 14.21 5 4 800
10 Extent Erf 000
Landsborough 120, Park
Street, Park Central
Central,
Johannesburg,
Gauteng
36 Park Central Erven 88 966 0 17.60 1 1 250
11 and 89, 400
Amsterdam Park
Road, Park Central
Central,
Johannesburg,
Gauteng
37 Park Central Erven 90 to 3 977 0 15.41 4 5 070
12 96, Park 900
Ruargh Street Central
and cnr
Simmonds
Southway,
Park Central,
Johannesburg,
Gauteng
38 Reuven 01 Erf 107, 2 586 0 11.80 2 3 000
5 Andrea Reuven Ext 800
Road, Reuven, 1
Johannesburg,
Gauteng
39 Reuven 04 Erven 3 and 3089 0 18.42 5 5 000
66-68 7, Reuven 000
Booysens
Road, Reuven,
Johannesburg,
Gauteng
40 Reuven 05 Erf 116, 6 463 0 17.45 9 9 000
Mandy Road, Reuven 000
Reuven,
Johannesburg,
Gauteng
41 Reuven 07 Erven 26 1 414 0 16.91 2 1 900
21 Mandy and 27, 250
Road, Reuven, Reuven
Johannesburg,
Gauteng
42 Reuven 09 Erven 97 2 640 0 16.76 3 600 3 800
39 Andrea and 98,
Road cnr Reuven
Andrea and
Ivanseth,
Reuven,
Johannesburg,
Gauteng
43 Reuven 11 Erf 95, 1 999 0 16.46 2 600 2 700
6 Ivanseth Reuven
Road, Reuven,
Johannesburg,
Gauteng
44 Reuven 12 Erf 91 to 9 845 0 8.33 7 500 9 700
8,10,11,12 94, Reuven
Ivanseth
Road, Reuven,
Johannesburg,
Gauteng
45 Reuven 14 Erven 34 2 053 0 15.76 2 600 2 700
20 Ivanseth and 35,
Road, cnr Reuven
Ivanseth and
Heronmere
Roads,
Reuven,
Johannesburg,
Gauteng
46 Anderbolt 06 Erven 185 4 186 0 16.69 4 900 4 900
88 Kirschner and 186,
Road, Anderbolt
Anderbolt Ext Ext 24
24, Boksburg,
Gauteng
47 Sebenza Erf 200, 1 214 0 20.52 2 150 2 100
23 Buwbes Sebenza Ext
Road 1
Sebenza Ext
1, Edenvale,
Gauteng
48 Wally"s Minis Portions 3, 8 842 616 15.59 10 900 10 300
5 Birmingham 4 and 5,
Road, Benoni, Erf 2787,
Gauteng Benoni
South Ext
and Portion
49 of the
Farm Benoni
77 IR
49 Welkom Erf 9058, 5 182 0 6.34 3 000 3 200
15th Street, Welkom Ext
Voorspoed 24
East, Welkom
Ext 24, Free
State
50 Wilbart Erf 22, 1 926 0 17.99 3 200 3 200
22 Mountjoy Wilbart
Street,
Wilbart,
Germiston,
Gauteng
51 Alrode 01 Erf 238, 2 338 0 12.48 2 500 2 300
28 Fuchs Alrode Ext
Street, 2
Alrode Ext 2,
Alberton,
Gauteng
52 Alrode South Portion 1 952 0 13.54 1 200 1 020
02 and
8 De Beer Remaining
Street, Extent of
Alrode South Erf 83,
Ext 3, Alrode
Alberton, South Ext 3
Gauteng
53 Alrode South Erf 224, 1 670 0 12.84 2 000 1 900
07 Alrode
257 Bosworth South Ext 1
Street,
Alrode South
Ext 1,
Alberton,
Gauteng
54 Alrode South Erf 220, 1 568 0 12.21 1 450 1 350
08 Alrode
249 Bosworth South Ext 1
Street,
Alrode South
Ext 1,
Alberton,
Gauteng
55 Alrode South Erven 175 1 356 0 15.02 1 500 1 700
09 and 176,
9/11 Barnato Alrode
Avenue, South Ext 1
Alrode South
Ext 1,
Alberton,
Gauteng
56 Alrode South Erf 442, 432 0 14.77 600 600
10 Alrode
39 Statler South Ext 2
Street,
Alrode South
Ext 2,
Alberton,
Gauteng
57 Dovehouse Erf 19, 3 928 617 9.77 2 400 3 000
1 Walton Aeroton
Road,
Aeroton,
Johannesburg,
Gauteng
58 FT Alrode Erf 16, 10 070 0 10.60 4 500 5 900
15 Alrode
Vereeniging
Avenue,
Alrode,
Alberton,
Gauteng
59 KMI Erf 234, 7 410 0 7.71 4 800 5 250
17 Fuchs Alrode Ext
Street, 2
Alrode Ext 2,
Alberton,
Gauteng
60 Midwest Sections 1, 1 551 0 13.42 1 800 2 500
1217 Leader 2, 3 and 4,
Avenue, SS Midwest
Robertville, Park -
Roodepoort, Scheme
Gauteng 54/1990,
Portion 4,
Erf 267,
Robertville
Ext 2 and
Portion 5,
Erf 338,
Robertville
61 Serbian Erf 77, 2 399 0 15.31 3 500 3 600
1133 Anvil Robertville
Road, Ext 1
Robertville
Ext 1,
Johannesburg,
Gauteng
62 Stormill 88 Sections 1, 2168 0 17.25 3 700 3 640
Remstang cnr 2, 3, 4, 5,
Ratchet 6, 7 and 8
Avenues, SS Stand
Stormill Ext 88,
3, Stormill -
Roodepoort, Scheme No
Gauteng 66/1998,
Erf 88,
Stormill
Ext 3
63 Stormill 90 Sections 2, 2243 382 12.24 2 150 3 700
Remstang cnr 3, 4, 5, 6,
Ratchet 7, 8 and 9,
Avenues, SS Stand
Stormill Ext 90,
3, Stormill -
Roodepoort, Scheme No
Gauteng 65/1998,
Erf 90,
Stormill
Ext 3
64 Anmerity Erf 38, 7 782 2205 10.58 5 500 6 400
38 Hendrik van Rosslyn
Eck Street,
Rosslyn,
Pretoria, Gauteng
65 Del Engineering Remaining 12 809 0 11.39 13 600 12 500
11 Marthinus Rass Extent of
Street, Rosslyn, Erf 11,
Pretoria, Gauteng Rosslyn
66 Putco Rosslyn Erf 94, 4 145 0 19.36 7 500 7 000
94 Piet Rosslyn
Rautenbach
Street, Rosslyn,
Pretoria, Gauteng
67 Rosdev Remaining 12 400 0 12.92 14 500 13 000
53 Hendrik van Extent
Eck Street, Erf 53
Rosslyn, and Erf
Pretoria, Gauteng 69,
Rosslyn
Notes:
1. There are 395 tenants within the Property Portfolio. The majority,
particularly in the multi-let buildings, occupy 3 to 5 year leases.
Certain major tenants have longer leases on a fully repairing and
maintaining basis.
2. Based on forecast information
2.3 Purchase consideration
Subject to the fulfillment of the suspensive conditions in
paragraph 2.4 below, the purchase consideration is to be
discharged as follows:
2.3.1 a vendor placing to institutions and private investors
of 86 826 667 Sizafika linked units ("subscription
linked units") at 300 cents per linked unit amounting
to 44.8% (R260 480 000) of the purchase consideration;
2.3.2 an issue to vendors, in partial settlement of the
purchase consideration, of 16 801 667 Sizafika
linked units ("consideration linked units") at 300
cents per linked unit amounting to 8.7% (R50 405 000)
of the purchase consideration; and
2.3.3 mortgage bonds over the properties in the sum of R270
000 000 amounting to the remaining 46.5% of the
purchase consideration.
2.4 Suspensive conditions
The proposed acquisitions are subject to the fulfilment of the
following suspensive conditions:approval by the Competition
Commission to the extent required;
2.4.1 approval of the proposed acquisitions by the requisite
majority of Sizafika linked unitholders in a general
meeting of Sizafika linked unitholders to be convened
to approve, inter alia, the acquisitions ("the Sizafika
general meeting") (in terms of the Listings
Requirements of the JSE Limited ("JSE Listings
Requirements"), the proposed acquisitions are
classified as a category 1 transaction);
2.4.2 Sizafika obtaining the relevant bank or financial
institutions" approval for the mortgage bonds referred
to in paragraph 2.3.3 above and Sizafika raising
sufficient capital in terms of a vendor placing of the
subscription linked units;
2.4.3 guarantees being issued by the financial institutions
in 2.4.3 for the respective purchase considerations
payable to the vendors in terms of the proposed
acquisitions by the relevant due dates therefor;
2.4.4 where required, approval by the investment committees
and shareholders of the vendors; and
2.4.5 any other regulatory approvals that may be required.
2.5 Valuation of the properties
The properties have been valued, with the effective date of
valuation being 1 June 2006, at a total amount of R589 770 000 by
Galleon Valuation Services (Pty) Limited, an independent external
valuer, who is registered as a professional valuer in terms of
the Property Valuers Profession Act, 47 of 2000, as defined by
Section 13 of the JSE Listings Requirements. Where relevant,
extracts from the valuation report containing further details of
the properties within the respective portfolios will be published
in the circular referred to in paragraph 7 below.
2.6 Financial effects of the proposed acquisitions
The impact of the proposed acquisitions on net asset value
("NAV") and tangible net asset value ("TNAV") of the property
portfolio is set out below. This information has been prepared
for illustrative purposes only and because of its nature, may not
fairly present the company"s financial position, or give a fair
reflection of the effect of the acquisitions on a Sizafika linked
unit holder:
Before the After the Percentage After the
proposed proposed change (%) proposed
acquisitions acquisitions acquisitions
(cents) other than including
related related
party party Total
transactions transactions percentage
(cents) (cents) change (%)
NAV and 148.5 263.5 77.4
TNAV per
Sizafika
linked unit
264.9 78.3
Linked 8 739 790 109 971 551
units in
issue 117 368 123
Assumptions:
1. The NAV and TNAV per Sizafika linked unit, as set out in the
"Before the proposed acquisitions" column of the table, are based
on the pro forma balance sheet of Sizafika at 31 March 2006.
2. The NAV and TNAV per Sizafika linked unit, as set out in the
"After the proposed acquisitions other than the related party
transactions" column of the table, are based the assumptions that
the proposed acquisitions (other than the related party
transactions set out in paragraph 5 below) and the Ziltrex
management agreement, details of which are set out in paragraph 3
below, were implemented on 31 March 2006.
3. The NAV and TNAV per Sizafika linked unit as set out in the
"After the proposed acquisitions including the related party
transactions" column of the table are based on the assumptions
that the proposed acquisitions and the Ziltrex management
agreement, details of which are set out in paragraph 3 below,
were implemented on 31 March 2006.
The above forecast financial information is the responsibility of the
board and has been reported on by the reporting accountants. Their
report in this regard will be contained in the circular referred to in
paragraph 7 below.
3. THE ZILTREX MANAGEMENT AGREEMENT
3.1 The management of Sizafika and the Property Portfolio has been
outsourced to Ziltrex 77 (Pty) Limited ("Ziltrex"), the directors
of which are also directors of Sizafika.
3.2 Ziltrex has subcontracted the property management to Helen Dudley
Property Management (Pty) Limited t/a Alchemy Property
Management, a specialist property management company with the
appropriate expertise to perform the property management
function. Helen Dudley is also a non-executive director of the
company and therefore a related party to Sizafika in terms of the
JSE Listings Requirements.
3.3 In terms of paragraph 13.25(a) of the JSE Listings Requirements,
the Ziltrex management agreement is subject to the approval by
the requisite majority of Sizafika linked unitholders, excluding
related parties and its associates, at the Sizafika general
meeting.
3.4 Full details of the remuneration payable by Sizafika in terms of
paragraph 3.1 and 3.2 above will be contained in the circular to
Sizafika linked unitholders referred to in paragraph 7 below.
4. BLACK ECONOMIC EMPOWERMENT PARTICIPATION
4.1 Sizafika has entered into a MOU with Indlunkulu, a private
company of which 51% is controlled by a Broad Based Economic
Entity led by Constance ("Connie") Nkosi. In terms of the MOU,
subject to the suspensive conditions in paragraph 4.2, Indlunkulu
will be entitled to acquire up to 20% of the issued linked units
in Sizafika at 300 cents per linked unit ("the Sizafika BEE
transaction"). Pursuant to the transactions in paragraph 5.2
below, 2 566 667 consideration linked units will be issued to
Indlunkulu.
Connie Nkosi is a non-executive director and deputy chairman of
Sizafika. Accordingly, in terms of the JSE Listings Requirements,
the granting by Sizafika of the Indlunkulu option is a specific
issue of shares for cash and related party transaction. An
independent expert will be appointed to provide a fair and
reasonable statement on this transaction at a future date.
4.2 Suspensive conditions to the Sizafika BEE transaction
The Sizafika BEE transaction is subject to the fulfillment of the
following conditions:
4.2.1 approval by the requisite majority of Sizafika linked
unitholders, excluding related parties and its
associates, at the Sizafika general meeting; and
4.2.2 the conclusion of formal agreements between Sizafika
and Indlunkulu.
5. RELATED PARTY TRANSACTIONS
5.1 One of the properties being acquired is TBC House (49 River Road,
Woodmead Extension, Gauteng), for R6 000 000 from Co-Props 56
(Pty) Limited, of which the Adventure Family Trust is the sole
shareholder and Bryan Smith is the Trustee of the Adventure
Family Trust. Bryan Smith is the Chief Executive Officer of
Sizafika. In terms of the JSE Listings Requirements, this
acquisition is classified as a small related party transaction.
Moores Rowland has been appointed as independent expert to
provide an opinion on whether the terms of this transaction are
fair and reasonable to Sizafika linked unitholders.
5.2 Two of the properties being acquired in terms of the proposed
acquisitions, Price City (350 Umgeni Road, Durban) and Lidonga
House (210 Jan Smuts Avenue, Johannesburg), to be acquired for
R28 700 000 and R7 500 000 respectively, will be acquired from
Indlunkulu. In terms of the JSE Listings Requirements, Indlunkulu
is a related party to Sizafika. These acquisitions are related
party transactions. Moores Rowland has been appointed as
independent expert to provide an opinion on whether the terms of
these transactions are fair and reasonable. Their opinion in this
regard will form part of the circular referred to in paragraph 7
below and will lie open for inspection at the offices of
Sizafika, 1st floor, 43 Wierda Road West, Wierda Valley,
Johannesburg, 2128. In addition, these acquisitions will require
the approval by the majority of Sizafika linked unitholders
(excluding Indlunkulu and its associates).
The proposed acquisitions, the entering into by Sizafika of the
Ziltrex management agreement, the Sizafika BEE transaction and the
related party transactions described in paragraph 5 above, are
hereinafter collectively referred to as "the proposed Sizafika
transactions".
6. CHANGE OF SECTOR
Application will be made to the JSE to, subject to the proposed
transactions becoming unconditional, to transfer Sizafika from the
"Personal & Household Goods - Personal Goods" sector to the "Financial
Services - Real Estate" sector of the JSE list under the abbreviated
name of `Sizafika" on or about the effective dates of the proposed
acquisitions.
7. CIRCULAR TO SIZAFIKA LINKED UNITHOLDERS AND WITHDRAWAL OF THE
CAUTIONARY ANNOUNCEMENT
A circular, incorporating the relevant information required for the
proposed transactions and incorporating the notice convening the
Sizafika general meeting at which Sizafika linked unitholders will
vote on the implementation of the proposed transactions, will be
posted to Sizafika linked unitholders within 28 days of this
announcement
8. OPINIONS, RECOMMENDATIONS AND UNDERTAKINGS
The board is of the opinion that the terms of the proposed
transactions are beneficial to Sizafika linked unitholders. Those
members of the board who hold Sizafika linked units have undertaken to
vote in favour of the proposed Sizafika transactions, where eligible
to do so. Accordingly, the board recommends that Sizafika linked
unitholders vote in favour of the resolutions to be proposed at the
Sizafika general meeting in respect of the proposed Sizafika
transactions.
As at the date of this announcement, eligible Sizafika linked
unitholders currently holding 59% of Sizafika"s linked units have
irrevocably undertaken to vote in favour of all the necessary
resolutions to give effect to the proposed acquisitions.
Sandton
24 October 2006
Independent Lead Sponsor
Imara Corporate Finance Spouth Africa (Pty) Limited
Corporate Advisers and joint sponsor
Investec Bank Limited
Date: 25/10/2006 04:38:39 PM Produced by the JSE SENS Department
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