| Fri 15 Dec 2006, 14:42 | | VKE - Vukile - Proposed Specific Issue and Amendme |
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VKE
VKE
VKE - Vukile - Proposed Specific Issue and Amendment of Debenture Trust Deed
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 2002/027194/06)
Share code: VKE & ISIN: ZAE000056370
("Vukile" or "the Company")
PROPOSED SPECIFIC ISSUE OF UNITS AND AMENDMENT OF DEBENTURE TRUST DEED
1. Introduction
Shareholders and debenture holders are referred to the company`s interim
results announcement dated 27 November 2006 in which unitholders were
advised that the directors of Vukile have resolved to convene general
meetings of the shareholders and debenture holders at which respective
meetings it will be proposed:
- that Vukile proceeds with a specific issue of units for cash to raise
approximately R200 million ("the specific issue"); and
- that Vukile`s Debenture Trust Deed be amended.
2. Rationale for the specific issue
Vukile has, in the recent past, taken a number of steps to enhance the
value of its property portfolio. This was achieved directly through
selective acquisitions and developments, and indirectly through the
virtually completed acquisition of MICC. Vukile is actively seeking new
property acquisitions and is planning further developments of its existing
portfolio.
The directors believe that it would be appropriate, and in the interests of
unitholders, to partly fund committed portfolio-enhancing capital
expenditure of approximately R160 million, and to allow for future
acquisitions, with permanent funding raised through the specific issue.
As a secondary benefit, such an issue would afford Vukile an opportunity to
further a strategic objective of increasing its unitholder spread.
3. Terms of the specific issue
It is proposed that Vukile issues 23 121 387 units at an issue price of
R8.65 per unit, i.e. for a total cash consideration of R200 000 000 to
various parties. The issue price was determined by a sub-committee of the
board after a bookbuilding exercise by Exchange Sponsors amongst selected
institutions, including both current and potential new investors.
The issue price represents a discount of 8% to the weighted average traded
price of Vukile units for the 30 trading days ended on 1 December 2006,
being the day before the finalisation of the bookbuilding process. It
represents a discount of 4,3% to the said traded price, on an ex-
distribution basis, taking into account the distribution of 35,75 cents per
unit announced by the Company and which is to take place on 27 December
2006.
The units to be issued will represent 7,8% of Vukile`s issued units after
the specific issue. On listing, all the issued units, including the new
units, will be of the same class and will rank pari passu in all respects.
Irrevocable undertakings have been obtained from ten investors to take up
the new units at the said price, subject to the conditions precedent being
fulfilled.
Sanlam Life Insurance Limited and Clidet 598 (Proprietary) Limited are non-
public unitholders of Vukile in terms of the Listings Requirements of the
JSE Limited ("JSE"). As they are related parties, Vukile has obtained an
opinion from Bridge Capital Advisors (Pty) Limited, acting as an
independent expert, that the terms of the specific issue for cash are fair
and reasonable to unitholders of Vukile.
4. Conditions precedent to the specific issue
A general meeting of Vukile shareholders will be held at 10:00 on Friday,
12 January 2007 at the offices of Vukile, 2nd floor, Meersig Building,
Constantia Boulevard, Constantia Kloof, in order to consider and, if deemed
fit, pass with or without modification, the ordinary resolutions required
to give effect to the specific issue for cash.
In terms of the Listings Requirements of the JSE, the passing of each such
resolution is subject to a majority representing not less than 75% of the
votes exercisable by Vukile shareholders present and voting, either in
person or by proxy, at the general meeting of shareholders. Each resolution
to approve and authorise a specific issue is subject to the passing of all
the other resolutions.
At the general meeting of shareholders the votes of any shareholder
participating in the specific issue will be taken into account in
determining a quorum at the general meeting, but will not be taken into
account in determining the results of the voting in relation to the
specific issue resolution relating to such party.
5. Listing of new units on the JSE
Subject to the said ordinary resolutions being passed, the JSE has granted
the listing of 23 121 387 new units to be issued in terms of the specific
issue from the commencement of trade on Monday, 22 January 2007.
6. Pro forma financial effects
The unaudited pro forma financial information, which is the responsibility
of the directors of Vukile, has been prepared for illustrative purposes
only and, because of its nature, may not give a true reflection of Vukile`s
financial position, changes in equity, results of operations or cash flows.
The unaudited pro forma financial information is merely intended to
illustrate how the specific issue, based on certain assumptions, might have
affected the unaudited interim financial results of Vukile for the six
months ended 30 September 2006 (which were released on SENS on 27 November
2006).
The table below sets out the unaudited pro forma financial effects of the
specific issue on Vukile:
Before Adjustments After Change
the the %
specific specific
issue (1) issue
Amount available for 36.30 .18 36.48 .50
distribution (cents per (2)
linked unit)
Net asset value (cents per 710 12 722 (3) 1.69
linked unit)
Tangible net asset value 679 14 693 (3) 2.06
(cents per linked unit)
Earnings per linked unit 57.55 (.94) 56.61 (1.63)
(cents)
Headline earnings per linked 37.03 .11 37.14 .30
unit (cents) (2)
Number of Vukile linked 272 429 23 121 295 550 8.49
units in issue (000)
Notes
1. The "Before the specific issue" column is based on Vukile`s published
unaudited interim results for the six months ended 30 September 2006.
2. The amount available for distribution in the "After the specific
issue" column has increased by an estimated reduction in new finance
costs of R9.2 million, less additional estimated taxation of R274 000
and assumes that the specific issue took place on 1 April 2006.
3. The net asset value and tangible net asset value in the "After the
specific issue" column are based on the following assumptions:
* the specific issue took effect on 30 September 2006;
* the transaction costs of R1.573 million have been offset against
the debenture premium.
7. Meeting of debenture holders
Two special resolutions will be proposed at the general meeting of
debenture holders.
The first special resolution will amend the Debenture Trust Deed to
accommodate the new IFRS accounting policies by amending the definition of
"net income".
The second special resolution will amend clause 4.2.1 of the Debenture
Trust Deed to increase the contractual interest entitlement on each
debenture in aggregate from a minimum of 90% of net income to 99% of net
income.
A general meeting of Vukile debenture holders will be held on Friday, 12
January 2007 at the offices of Vukile, 2nd floor, Meersig Building,
Constantia Boulevard, Constantia Kloof, at the conclusion of the general
meeting of shareholders referred to in 4 above, in order to consider and,
if deemed fit, pass with or without modification, the special resolutions
required to amend the Debenture Trust Deed.
8. Circular
A circular containing full details of the specific issue and the proposed
amendments to the Debenture Trust Deed will be mailed to shareholders and
debenture holders on Monday, 18 December 2006.
Johannesburg
15 December 2006
Corporate adviser and lead sponsor
Exchange Sponsors
Auditors and reporting accountants
Grant Thornton
Attorneys
Brink Cohen le Roux Inc.
Joint sponsor and independent expert
Bridge Capital
Date: 15/12/2006 14:42:01 Produced by the JSE SENS Department.
