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PPR
PPR
Putprop - New Lease Conditions Agreed With Putco Limited And
Cautionary Announcement
Putprop Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/001085/06)
Share code: PPR & ISIN: ZAE000072310
("Putprop" or "the Company")
NEW LEASE CONDITIONS AGREED WITH PUTCO LIMITED AND CAUTIONARY ANNOUNCEMENT
Ernst & Young Sponsors (Proprietary) Limited are authorised to announce
that Putprop has recently negotiated a new lease agreement with Putco
Limited ("Putco"), its major tenant.
Despite the previous lease agreement with Putco covering the period of nine
years and eleven months up to and including 30 November 2007 the new
agreement runs from 1 January 2007 for a period of six years and ultimately
terminating on 31 December 2012. The new lease agreement includes the
following salient terms:
- contractual rentals escalate at 9% per annum; and
- in the previous agreement maintenance costs were shared on a 50 : 50
basis between Putprop and Putco whilst the new agreement requires that
Putprop only be responsible for the maintenance of the underlying
structures and the roofing of premises tenanted by Putco.
Given the certainty and longer term sustainability accorded by a new lease,
Putprop"s Board of directors agreed to renegotiate the agreement ahead of
time. However, following a detailed analysis of the rental market for each
of the relevant properties tenanted by Putco, their specific locations and
comparable property rentals, Putprop agreed to reduce the planned escalated
rentals as from 1 January 2007, by an average 31.6%.
Putprop negotiated a six year lease to accord with its tenant"s requirement
to tie in its own lease commitments with the duration of its bus tender
contract periods.
The Putprop directors are of the opinion that the new contractual rentals
will nevertheless produce a satisfactory and market related return to
Putprop, although obviously not at historic levels. Once Putprop has had an
opportunity to calculate the pro forma and/or anticipated financial effects
of the new lease, and had such confirmed by its external auditors a further
announcement will be made to shareholders. The anticipated timing of that
announcement is early in January 2007.
Accordingly, shareholders are advised to exercise caution when dealing in
the company"s securities until that further announcement is made.
SANDTON
1 December 2006
Registered OfficeCarlin House8, 4th Street, Wynberg, Johannesburg 2090P O
Box 39002, Bramley, Johannesburg 2018
Share Transfer SecretariesComputershare Investor Services 2004 (Pty)
Limited70 Marshall StreetMarshalltownP O Box 61051, Johannesburg 2107
AuditorsErnst & YoungWanderers Office Park52 Corlett Drive, IllovoP O Box
2322, Johannesburg 2000
Sponsor
Ernst & Young Sponsors (Pty) Ltd
Incorporated in the Republic of South Africa
(Registration number 2000/031843/07)
Date: 01/12/2006 10:00:05 AM Produced by the JSE SENS Department
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