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Investment into Tradehold and the Collins Group – Revised Transaction Terms, Withdrawal of Cautionary Announcement
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
JSE code: TDH
ISIN: ZAE000152658
(“Tradehold” or the “Company”)
INVESTMENT INTO TRADEHOLD AND THE COLLINS GROUP – REVISED TRANSACTION TERMS AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcements (the "Previous Announcements") published on 27 February 2019, 6
March 2019, 5 April 2019 and 30 April 2019. Unless the context indicates otherwise, words and phrases defined in the
Previous Announcement dated 6 March 2019 bear the same meanings in this announcement.
Shareholders are advised that:
1.1 the due diligence process has been completed by the Investor and its wholly-owned subsidiary U REIT Collins (Pty)
Ltd (“URC”), formerly K2017224756 (South Africa) Proprietary Limited, to their satisfaction; and
1.2 detailed agreements have been concluded by Tradehold, CPP, URC and the Investor (“the Agreements”) recording,
inter alia, that the agreed tangible net asset value (the “TNAV”) of CPP for purposes of the Transaction is
R2 407 699 050, which is as at 30 April 2019 and not the closing date of the Transaction (“the Closing Date”), as
previously agreed.
2. REVISED TERMS
As at the signature date of the Agreements, CPP, Imbali 21 and Saddle 69 were wholly-owned subsidiaries of Tradegro
Holdings which is in turn is a wholly owned subsidiary of Tradehold.
Creation of the Collins Group
Tradegro Holdings will dispose of all its shares in Imbali 21 and Saddle 69 to CPP in exchange for the issue of new ordinary
shares in CPP, and cede and transfer to CPP all its loan claims in and against Imbali 21 and Saddle 69. In addition, Tradegro
Holdings will capitalise substantially all the loans extended to CPP. The result will be that CPP will be a single holding
company with two subsidiaries, namely Imbali 21 and Saddle 69 and their subsidiaries and associates (the "Collins
Group"). Pursuant to the Agreements, CPP will no longer immediately be converted into a public company with a MOI
that accords with the requirements of the JSE for a Real Estate Investments Trust (“REIT”), and such conversion has been
delayed until such time as the decision is taken to list CPP on the JSE Limited (“JSE”) (or any other recognised securities
exchange) as a REIT. The intention is however to operate CPP as near as possible in compliance with the JSE's
requirements for REITs with a view to a possible listing of CPP at an appropriate time. This will include adopting an
appropriate distribution policy in line with REIT requirements.
Collins Group subscription
Following the above creation of the Collins Group, URC will subscribe (“the CPP Subscription”) for ordinary shares equal
to R833 million (a shareholding of approximately 25.7% and not 27% as originally estimated) in CPP at the TNAV.
This subscription amount will comprise of R500 million of the Investors’ cash and R333 million of cash lent to the Investor
by CPP (“the CPP Loan”). The CPP Loan is on market related terms, with a revised interest rate which will now be
calculated at the prime lending rate (currently 10.25%) less 0.5% and must be repaid within 5 years of the Closing Date.
Security for the repayment of the CPP Loan comprises a pledge of all the CPP shares held by URC and a pledge of all the
shares in URC and a guarantee from I-Group Financial Holdings (Pty) Ltd limited to an amount of R111 million .
Tradehold Option
No terms have been amended regarding the Tradehold Option. URC will, once the CPP Subscription has been completed,
acquire an option to invest R200 million in Tradehold through a combination of the subscription for new Tradehold
ordinary shares and (at the election of Tradehold) the purchase of Tradehold’s treasury shares currently held by
Tradehold’s wholly-owned subsidiary, Imbali 21. This option must be exercised within 10 business days of the Closing
Date (“the Option Exercise Date”). The option price is R16 per Tradehold ordinary share and must be paid within 3 months
of the Option Exercise Date. The option price will increase at the prime lending rate from the Option Exercise Date until
the date that the option price is paid.
Transaction costs
There are no revised terms to the Transaction costs. CPP will pay, I-Group Retail Holdings (Pty) Ltd, a debt restructure
fee of R30 million. In addition, a debt restructure fee calculated on a sliding scale of between 6% and 4% of the CPP Loan
will be paid based on when the CPP Loan is settled in full.
Listing and unbundling of CPP
The proposed REIT listing and unbundling of CPP is expected to take place by no later than 28 February 2022, provided
that market conditions at the time are conducive to such listing and all requisite approvals are obtained.
Transaction Unchanged
Save for any changes to the Transaction set out in this announcement, the salient terms of the Transaction remain the
same as those set out in the Previous Announcements.
3. FULLFILLMENT OF THE CONDITIONS PRECEDENT
Save for certain third party consents, all of the conditions precedent have been fulfilled.
4. FINANCIAL INFORMATION OF THE TRANSACTION
Further to the completion of the due diligence process mentioned in paragraph 1 above the following financial
information is disclosed:
• the value of the net assets that are the subject of the Transaction (namely CPP, Imbali 21 and Saddle 69) as at 31
August 2018 was R2 067 895 738; and
• the profits attributable to the net assets that are the subject of the Transaction for the six month period ended 31
August 2018 was R88 122 148.
The historical financial information of CPP, Imbali 21 and Saddle 69 was prepared in accordance with International
Financial Reporting Standards as set out in the most recently reviewed interim financial statements for the six months
ended 31 August 2018.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
All of the relevant terms including the financial information regarding the Transaction have now been announced and
shareholders are therefore no longer required to exercise caution when dealing in their Tradehold shares.
Cape Town
17 May 2019
JSE Sponsor to Tradehold
Mettle Corporate Finance Proprietary Limited
Date: 17/05/2019 02:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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