| Fri 16 Feb 2007, 14:53 | | ERM/SBL - ERM/Sable - Increased investment in a pr |
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ERM SBL
ERM SBL
ERM/SBL - ERM/Sable - Increased investment in a property portfolio by ERM
and Sable consolidation of interests and further cautionary announcement
Enterprise Risk Management Limited
Incorporated in the Republic of South Africa
(Registration number: 1995/001603/06)
Share code: ERM & ISIN: ZAE000037701
("ERM")
Sable Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1968/010636/06)
Share code: SBL & ISIN: ZAE000006383
("SABLE")
INCREASED INVESTMENT IN A PROPERTY PORTFOLIO BY ERM AND SABLE
CONSOLIDATION OF INTERESTS
FURTHER CAUTIONARY ANNOUNCEMENT
INCREASED INVESTMENT IN A PROPERTY PORTFOLIO BY ERM AND SABLE
1. Introduction
Further to the announcement dated 30 November 2006 and the joint cautionary
announcement dated 25 January 2007, shareholders are advised that subsequent to
the acquisition by Amrich 58 Properties (Proprietary) Limited ("Amrich") of 34%
of the issued share capital of Rotaflex Investments (Proprietary) Limited
("Rotaflex"), agreement has been reached with the remaining shareholder of
Rotaflex, being Telematic Frontiers International Corporation, in terms of which
Amrich will acquire the remaining 66% of the issued share capital of Rotaflex
("the first transaction"), resulting in Amrich owning 100% of Rotaflex. Rotaflex
is a company with a diversified portfolio of retail, commercial, residential and
industrial properties.
2. Rationale for the first transaction
ERM had previously indicated its intention to invest in the property sector. ERM
believes that the first transaction will further enhance shareholder value and
contribute towards expanding its interests in property. Together with SABLE,
having been involved in the property industry in excess of 40 years, both
companies strongly believe that this transaction will enhance the development of
their joint property interests.
3. Salient terms of the first transaction
The purchase consideration, which amounts to R62.70 million, will be settled by
Amrich in cash and will be funded by way of a cash contribution of R31.35
million each by ERM and SABLE to Amrich. The net value of the Rotaflex portfolio
of properties is approximately R95 million made up of a gross property value of
R224 million and debt of R129 million. Payment in full will be made on the
effective date of the acquisition, being 31 March 2007.This will be funded
partly by reserves and partly by facilities.
4. Conditions precedent of the first transaction
The first transaction is conditional upon inter alia:
- Delivery of a written resolution passed by the directors of Amrich
approving the first transaction;
- Competition Commission approval;
- Approval by the Exchange Control Division of the South African Reserve
Bank; and
- Approval of the first transaction by the shareholders of SABLE and ERM.
CONSOLIDATION OF INTERESTS
1. Introduction
Simultaneously to the conclusion of the first transaction, ERM has agreed to
sell its 50% shareholding in Amrich to SABLE which consideration will be
discharged by the issue of SABLE ordinary shares to ERM. SABLE will issue a
further 392 500 ordinary shares at a price of R40 per share to ERM for cash
("the second transaction").
2. Rationale for the second transaction
SABLE has entered into the second transaction to increase the size, diversity
and geographical location of its property portfolio. SABLE is listed in the Real
Estate sector of the JSE Limited ("JSE") List, and is a property and treasury
investment company with interests in commercial, retail, residential and
industrial property developments in South Africa. Both transactions will
increase the gross property assets of SABLE to approximately R436 million,
excluding other property transactions and revaluations effected after 30 June
2006.
ERM has entered into the second transaction to increase its shareholding in
SABLE, thereby exposing itself to a much stronger and more diversified property
holding.
ERM and SABLE have identified a synergistic association, through which both
companies wish to grow, expand and diversify their property activities.
3. Salient terms of the second transaction
The purchase consideration, which amounts to R47.5 million, will be discharged
by the issue of
1 187 500 SABLE ordinary shares to ERM at a price of R40 per share.
The effective date of the second transaction is 30 May 2007. As a result of this
second transaction, ERM`s shareholding in SABLE will increase to an effective
holding of 21.49%.
4. Conditions precedent of the second transaction
The second transaction is conditional upon inter alia:
- Delivery of a written resolution passed by the directors of ERM and SABLE
approving the transaction;
- Competition Commission approval;
- ERM performing a due diligence investigation on the value of the SABLE
shares;
- Approval of SABLE shareholders to issue shares for cash; and
- Approval of the second transaction by ERM and SABLE shareholders.
CATEGORISATION AND DOCUMENTATION
In terms of the JSE Listings Requirements, the combined transactions will be
category 1 transactions both for SABLE and for ERM, which require the posting of
circulars and notices of general meetings to ERM and SABLE shareholders.
FURTHER CAUTIONARY ANNOUNCEMENT
Further to the above, shareholders are advised that they should continue to
exercise caution when dealing in the respective companies` securities until a
further announcement is made which will include the financial effects and the
details of further discussions between SABLE and ERM. Circulars relating to both
transactions will be issued in due course.
Randburg
16 February 2007
Corporate Adviser and Sponsor to ERM and SABLE
Sasfin Capital
A division of Sasfin Bank Limited
Date: 16/02/2007 14:53:02 Produced by the JSE SENS Department.
