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Update and withdrawal of cautionary
RESILIENT REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/016851/06)
JSE share code: RES ISIN: ZAE000209557
Bond company code: BIRPIF
(Approved as a REIT by the JSE)
(“Resilient” or the “company”)
UPDATE AND WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Since the joint announcement released on SENS on 7 March 2018 by Resilient and Fortress REIT Limited
(“Fortress”), Resilient has made progress toward addressing shareholder concerns and this announcement
provides an update.
2. IMPLEMENTATION OF UNWIND OF CROSS-SHAREHOLDING
The cross-shareholding between Resilient and Fortress has been unwound by Resilient’s distribution of Fortress
B shares on 7 May 2018 (the “unwind of the cross-shareholding”).
3. UPDATE REGARDING SIYAKHA TRUSTS
Resilient has been informed that The Siyakha Education Trust (the “Siyakha Trust”) and The Siyakha 2
Education Trust (the “Siyakha 2 Trust”) have realised and continue to realise assets in order to settle all liabilities
to institutional lenders. As announced on 7 March 2018, subject to all required regulatory, third-party and
shareholder consents, it is intended that the Siyakha Trust be repositioned as a BEE ownership vehicle that owns
only Resilient shares and is funded only by Resilient and the Siyakha 2 Trust be repositioned as a BEE ownership
vehicle that owns only Fortress shares and is funded only by Fortress. Once this repositioning has been
implemented, the Siyakha Trust will be renamed the Resilient Empowerment Trust and the Siyakha 2 Trust will
be renamed the Fortress Empowerment Trust, at which stage Resilient will terminate its involvement with the
Fortress Empowerment Trust.
On the assumption of a Resilient share price of R57,00 and a Fortress B share price of R14,50, the fair value of
Resilient’s claim on loan account against each trust will result in an impairment totaling approximately R1,7
billion. The full amount of each loan will remain due to Resilient and will accrue interest at the agreed rate. For
purposes of determining distributable earnings, for so long as trust liabilities exceed the value of trust assets,
Resilient will recognise interest accrued on the loans advanced only to the extent that the accrued interest is
matched by dividends declared for the same period in respect of the shares held by the trust.
4. DISTRIBUTION GUIDANCE
Resilient provided distribution guidance in the announcement of 7 March 2018 of 601 cents for the 2018 financial
year and growth in distributions of approximately 8% for the 2019 financial year. A Resilient shareholder who
retains the Fortress B shares distributed in terms of the unwind of the cross-shareholding will receive a combined
dividend in line with the guidance previously provided. Therefore, following the unwind of the cross-
shareholding, Resilient expects its distribution guidance per share to be approximately 564 cents per share for the
2018 financial year (1H actual: 306 cents per share; 2H guidance: 258 cents per share) and approximately 569
cents per share for the 2019 financial year. This is based on current exchange rates and the further assumptions
that there will be no deterioration of the macro-economic environment, that no major corporate failures will occur
and that tenants will be able to absorb the recovery of rising utility costs and municipal rates. Budgeted rental
income is based on contractual escalations and market-related renewals. As regards dividends to be received by
Resilient on its investments, Resilient’s assumptions are in line with current guidance provided by the companies
in question. The forecast has not been audited, reviewed or reported on by Resilient’s auditors.
Distribution guidance Updated
per SENS of 7 March distribution
2018 guidance
Six months to Jun 2018
Distribution per Resilient share (“RES”) (cps) 295 258
Distribution per Fortress B share (“FFB”) (cps) 89
Year to Jun 2019
Distribution per RES (cps) - approximately 649 569
Distribution per FFB (cps) - approximately 188
Illustrative example of distribution to be received if FFB shares were retained by investor who holds
100 000 RES shares:
Before unwind of the After unwind of the
cross-shareholding cross-shareholding
Jun 2018 year
RES 100 000 295 000 258 000
FFB 40 000 n/a 35 600
295 000 293 600
Jun 2019 year
RES 100 000 649 000 569 000
FFB 40 000 n/a 75 200
649 000 644 200
5. UPDATE ON RESILIENT DEBT FACILITIES
Shareholders are advised that Resilient has repaid a bond of R190 million that expired in February 2018 and
extended a facility of R500 million that expired in March 2018 for a further five years. Resilient has secured
R1,45 billion in new debt facilities with direct property as collateral.
6. UPDATE ON INVESTIGATIONS OF ALLEGED MARKET ABUSE
The key findings of the independent review by Mr Fakie were published on SENS on 10 April 2018. Mr Fakie’s
report has been provided to the Financial Sector Conduct Authority. Shareholders will be informed of any new
facts or progress achieved in this regard.
7. WITHDRAWAL OF CAUTIONARY
The Resilient board has no further basis to advise shareholders to continue to exercise caution when dealing in
Resilient securities and the cautionary announcement first made on 7 March 2018 is withdrawn.
22 May 2018
Sponsor
Java Capital
Legal advisor
Cliffe Dekker Hofmeyr
Date: 22/05/2018 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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