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

REBOSIS PROPERTY FUND LIMITED - Update on the disposal of Mdantsane City Shopping Centre

Release Date: 09/09/2019 12:30
Code(s): REB REA     PDF:  
Wrap Text
Update on the disposal of Mdantsane City Shopping Centre

(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

     Shareholders are referred to the announcement released on SENS on 23 July 2019 relating to the
     proposed disposal by Rebosis of the rental enterprise comprising Mdantsane City Shopping Centre
     ("Mdantsane City") to Vukile Property Fund Limited ("Vukile") (the "Mdantsane disposal"). The
     maximum disposal consideration as agreed between Rebosis and Vukile is R556.372 million (the
     "disposal consideration") comprising R511.372 million in respect of Mdantsane City enterprise plus
     any payment in respect of the Mdantsane bulk (capped at R45 million).

     Shareholders are hereby advised that on 6 September 2019 Vukile and Rebosis concluded the formal
     agreement to effect the Mdantsane disposal. In terms of the agreement the parties have agreed that the
     disposal consideration may be adjusted downwards in respect of any vacancy in the gymnasium in
     Mdantsane City ("the gym") as further detailed in paragraph 2 below and any capital expenditure to
     be undertaken by Vukile after the date of registration of transfer of ownership of Mdantsane City into
     the name of Vukile ("transfer date") as further detailed in paragraph 3 below.

2.   The gym

     Rebosis has instituted legal proceedings to evict the gym tenant (the "gym tenant") and will retain
     liability for all costs in connection with the eviction proceedings and Rebosis has indemnified Vukile
     accordingly. Any rentals recovered by or are paid by the gym tenant to Vukile, either prior to or after
     the transfer date will be reimbursed to Rebosis.

     Rebosis has procured a new tenant for the gym at a rental of not less than R50 per square metre
     (excluding VAT) per month escalating at 8% per annum (the "gym forecast rental") and on terms
     acceptable to Vukile, however the new tenant can only occupy the space once the gym tenant has been
     evicted. The rentable area of the gym is 1 667m2. Rebosis and Vukile have calculated that the rental
     for the gym amounts to R5.8 million (excluding VAT) over a 5-year period from transfer date
     ("indemnity period").

     If by the transfer date the gym tenant has not been evicted and a lease agreement with a substitute
     tenant has not been concluded by Rebosis, Rebosis has indemnified Vukile for any loss suffered by
     Vukile in an aggregate maximum amount of R5.8 million ("indemnity amount") in relation to any
     loss of rental in respect of gym (as determined with reference to the gym forecast rental) for the
     indemnity period until a substitute tenant is procured for the gym. Vukile will be entitled to withhold
     the indemnity amount from the disposal consideration, which amount will be held in an escrow
     account by an escrow agent who will make monthly payments to Vukile from the escrow account in an
     amount equal to the gym forecast rental for the relevant month. Should a replacement tenant be
     procured prior to the expiry of the indemnity period, all amounts remaining in the escrow account,
     after payment of any indemnity amounts due to Vukile and the deduction of all fees and expenses
     payable to the escrow agent, will be refunded to Rebosis.

3.   Capital expenditure

     Rebosis has agreed to attend to the completion of certain specified capital expenditure items at an
     estimated cost of R5 428 739 which amount has been taken into account in determining the purchase
     consideration. To the extent that as at the transfer date there is outstanding work in respect of the
     capital expenditure items, Vukile will be entitled to withhold the amount equal to the anticipated cost
     of completing the outstanding work (capped at R5 428 739) from the amount payable in respect of the
     disposal consideration.

4.   Categorisation

     Save as otherwise detailed in this announcement, the rationale, terms and other details relating to the
     Mdantsane disposal as set out in the 23 July 2019 announcement remains unchanged.

     The Mdantsane disposal is classified as a Category 1 transaction for Rebosis, which accordingly
     requires approval by Rebosis shareholders. Save for the receipt of shareholder approvals required to be
     obtained in respect of the Mdantsane disposal prior to 31 October 2019, all other conditions precedent
     have been fulfilled.

     A circular ("circular") relating to the supplementary information relating to the Mdantsane disposal is
     progressing through the JSE approval process. The information contained in the circular as it relates to
     Mdantsane City is supplemental to the circular issued to shareholders on 27 June 2019 ("original
     circular") and has been included in the circular for the purposes of providing additional information in
     terms of section 11.56 of the JSE Listings Requirements. The additional information relates to the
     amended terms upon which Rebosis will implement the original transaction as announced on SENS on
     13 May 2019 and, as a consequence, the material changes to the pro forma financial information, the
     historical financial information, the anticipated material borrowings of Rebosis post implementation of
     the Mdantsane disposal and the property information as included in the original circular. Accordingly,
     the circular should be read in conjunction with the original circular and incorporates all information in
     the original circular by reference, as amended by the content of the circular, to obtain a full
     appreciation of the Mdantsane disposal.

     A further announcement will be made in due course.

9 September 2019

Transaction sponsor
Java Capital 

Date: 09/09/2019 12:30:00
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