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HYP
HYP
HYP - Hyprop - Realisation of Investment in SA Retail Properties Limited
Hyprop Investments Limited
(Registration No. 1987/005284/06)
Share code: HYP & ISIN code: ZAE000003430
(the "Hyprop")
REALISATION OF INVESTMENT IN SA RETAIL PROPERTIES LIMITED ("SA RETAIL")
INTRODUCTION
Further to the cautionary announcement issued by Hyprop on 11 January 2007,
Java Capital is authorised to announce that Hyprop has concluded an
unconditional agreement ("the agreement") with the Public Investment
Corporation Limited ("PIC") regulating the disposal by Hyprop of all the
linked units Hyprop holds in SA Retail (being 108 097 051 linked units)
("Hyprop`s SA Retail units") on the terms set out below ("the
transaction").
MATERIAL TERMS OF THE AGREEMENT
Hyprop has been advised by the PIC that SA Corporate Real Estate Fund ("SA
Corporate") intends making an offer to SA Retail unitholders or proposing a
scheme of arrangement (in terms of s440 or s311 of the Companies Act 61 of
1973, as amended) in terms of which SA Corporate will acquire 100% of the
units in SA Retail in consideration for SA Corporate units (the "SA
Corporate offer").
In terms of the agreement:
- Hyprop has undertaken to accept and/or vote in favour of the SA
Corporate offer in respect of Hyprop`s SA Retail units;
- on the implementation of the SA Corporate offer, the PIC shall acquire
the SA Corporate units received by Hyprop as consideration for the
disposal by Hyprop to SA Corporate of Hyprop`s SA Retail units (the
"SA Corporate consideration units") for an aggregate purchase
consideration of R1 135 019 035,50 being R10,50 per SA Retail unit,
together with interest thereon at 9% per annum calculated from 1
October 2006 until date of payment (both days inclusive);
- if for any reason whatsoever the SA Corporate offer has not been
implemented by 30 April 2007 (including by reason of the SA Corporate
offer not having been made) put and call option arrangements have been
agreed between Hyprop and PIC which, on implementation, will result in
the sale by Hyprop and the purchase by the PIC of Hyprop`s SA Retail
units at R10,50 per unit plus interest thereon at:
- 9% per annum calculated from 1 October 2006 until 30 April 2007
(both days inclusive);
- the prime rate of interest calculated from 1 May 2007 until date
of payment (both days inclusive).
RATIONALE
Given that Hyprop does not support SA Retail`s investment strategy Hyprop
sought to realise its investment in SA Retail.
The transaction affords Hyprop the opportunity of realising its entire
investment in SA Retail for cash in a single transaction and at a
significant profit. The transaction proceeds will provide Hyprop with the
ability to repay all of its existing borrowings. This will be earnings
enhancing, strengthen Hyprop`s financial position and enable Hyprop to
utilise its borrowing capacity for future opportunities.
FINANCIAL EFFECTS
The pro forma financial effects of the transaction on the net asset value,
tangible net asset value and distributable earnings per Hyprop combined
unit are set out below:
Pro forma Pro forma Change
before after %
disposal disposal
per per
combined combined
unit unit
(cents) (cents)(5)
Distributable earnings 110.23 118.03(3)(4 7.1
(3)(4) )
Historical net asset value 26.45(1)(3) 26.88(2) 1.6
(3)
Historical net tangible 26.45 26.88 (2) 1.6
asset value (1)(3) (3)
Weighted average combined 144 369 188 143 137 272
units in issue (000`s)
(1) The historical net asset value ("NAV") and tangible net asset value
("TNAV") per Hyprop combined unit as set out in the "before disposal"
column of the table are based on Hyprop`s reviewed balance sheet at 30
June 2006 ("Hyprop`s reviewed balance sheet"), in which the property
portfolio is stated at fair value.
(2) The NAV and TNAV per Hyprop combined unit as set out in the "after
disposal" column of the table, are based on the assumption that the SA
Retail units were disposed of on 30 June 2006 and the purchase
consideration was settled in cash on that date, after providing for
costs of R5,525 million (the "costs") and capital gains tax of R7,568
million.
(3) NAV, TNAV and distributable earnings as set out in the "after
disposal" column of the table have been based on the following
assumptions:
- Total costs of implementing the disposal of R5,525 million.
- The full amount of the proceeds, after providing for the costs and
capital gains tax ("CGT"), was applied towards reducing debt.
(4) Distributable earnings have been based on the following additional
assumptions:
- Total costs of implementing the disposal of R5,525 million have been
assumed to have been incurred and have reduced the net profit on sale.
- CGT has been assumed to be R9,103 million
ADDITIONAL DOCUMENTATION
A circular to shareholders in regard to the transaction will be issued in
compliance with the JSE Listings Requirements within 28 days of this
announcement.
WITHDRAWAL OF CAUTIONARY
The cautionary announcement dated 11 January 2007 is hereby withdrawn.
Rosebank
15 January 2007
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 16/01/2007 17:04:01 Produced by the JSE SENS Department.
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