To view the PDF file, sign up for a MySharenet subscription.

REBOSIS PROPERTY FUND LIMITED - Proposed disposal of Mafikeng student accommodation

Release Date: 06/09/2019 16:25
Code(s): REB REA REBC15     PDF:  
Wrap Text
Proposed disposal of Mafikeng student accommodation

(Incorporated in the Republic of South Africa)
(Registration number: 2010/003468/06)
JSE share codes:
REA ISIN: ZAE000240552
REB ISIN: ZAE000201687
Alpha code: REBI
(Approved as a REIT by the JSE)
(“Rebosis” or the “Company”)


1. Introduction

    Rebosis shareholders are hereby advised that the Company (or the “Seller”) has entered into an agreement
    (“Agreement”) dated 5 September 2019 (“Signature Date”) with Adowa Infrastructure Managers (RF) Proprietary
    Limited (“Adowa RF”) and the Government Employees Pension Fund (“GEPF”), both parties which are represented
    by Adowa Property Developers Proprietary Limited (“Adowa Property”) (collectively, the “Purchaser(s)”), to
    dispose of Erf 2460, comprising 209 units/apartments, including 611 student accommodation beds and auxiliary
    facilities, situated in Mafikeng, together with the rental enterprise conducted thereon (the “Property”) for 
    a cash consideration of R146.4 million (inclusive of VAT at zero percent) (“Disposal Consideration”) (“Disposal”). 
    The Disposal will become effective on the date of transfer of the Property into the Purchaser’s name 
    (“Transfer Date”).

2. Information on the Purchasers

    Adowa RF is wholly owned by Lutatweni Komkhulu and the shareholders of Adowa Property are GEPF (60%) and
    Adowa RF (40%).

    GEPF administers and manages pensions and other benefits for government employees in South Africa. The Public
    Investment Corporation SOC Limited (“PIC”) is the asset manager for GEPF which invests funds on its behalf. 
    PIC is wholly owned by the South African government.

    Upon the Transfer Date, the Seller will transfer a 30% undivided share in the Property to Adowa RF and a 70%
    undivided share in the Property to GEPF, respectively.

3. Rationale and use of proceeds

    The Disposals are in line with the Company’s intention to reduce its loan to value (“LTV”) ratio as outlined in the
    road-map included in the results announcement released by the Company on SENS on 12 November 2018 and the
    pre-close presentations presented to Rebosis shareholders on 27 February 2019 and 27 August 2019.

4. Terms and conditions of the Disposal

   4.1 Disposal Consideration

       The Seller sells the Property to the Purchasers which will purchase the Property at an exit forward yield of
       10%, based on forecast net income, plus bulk of R15 million, which totals R146.4 million (excluding any transfer
       duty) (“Disposal Consideration”).

       The Disposal Consideration shall be paid in cash, by the Purchaser to the Seller on the Transfer Date against
       registration of Transfer of the Property in the name of the Purchasers; and cancellation of all existing mortgage
       bonds (if any) over the Property.

   4.2 Conditions precedent

       The Disposal is subject to the fulfilment of the following outstanding conditions precedent:

       4.2.1    By the expiry of the period commencing on the Signature Date and ending 30 business days thereafter
                (“Exclusivity Period”), the Disposal is approved by the board of directors of Adowa Property;
       4.2.2    by the expiry of the Exclusivity Period, the Purchasers have notified the Seller that they are satisfied
                with the due diligence investigation to be conducted in respect of the Property; and
       4.2.3    by 30 January 2020, the Disposal is approved by Rebosis shareholders.

       The Agreement contains representations and warranties by the Seller in favour of the Purchaser which are
       standard for a transaction of this nature.

5. Financial information

   The financial information in respect of the Property, provided below, has been extracted from the Company’s
   interim results for the period ended 28 February 2019, which were prepared in terms of International Financial
   Reporting Standards. The financial information in this announcement is the responsibility of the directors of
   Rebosis and has not been reported on or reviewed by a reporting accountant.

                                                  Gross                       Net           Value of
                                    Single or                   average
                                                  lettable                    operating     the
     Location         Sector        multi-                      rental per
                                                  area                        income        Property*
                                    tenanted                    m2
                                                  (m2)          (R)           (R’m)         (R’m)
     4, Mafikeng,     Residential   Multi         11 665        117.6         5.9           139.0
     North West

  *The valuation was performed as at 1 September 2018 by Dipeo Valuations (Pty) Ltd, who is independent from the
  Company and registered as a professional valuer in terms of the Property Valuers Profession Act, No. 47 of 2000.

6. Categorisation

   In terms of the JSE Listings Requirements, the Disposal is classified as a Category 2, related party transaction for
   the Company, as GEPF is a material shareholder in Rebosis, which accordingly requires approval by Rebosis

   Details of the Disposal, together with inter alia, pro forma financial effects of the Disposal and a valuation report
   on the Property will be included in a circular to Rebosis shareholders (“Circular”).

   The salient dates and times pertaining to the required approval by Rebosis shareholders for the Disposal will be
   released on SENS and published in the press at the time of posting of the Circular.

06 September 2019

Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 06/09/2019 04:25:00
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, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story