TONGAAT HULETT LIMITED - Sale of property by wholly owned subsidiary

Sale of property by wholly owned subsidiary

Tongaat Hulett Limited
(Registration number 1892/000610/06)
Share code: TON
ISIN ZAE000096541
(“Tongaat Hulett” or “the Company”)

SALE OF PROPERTY BY WHOLLY OWNED SUBSIDIARY

1.     INTRODUCTION

Shareholders are hereby advised that Tongaat Hulett Developments (Pty) Ltd (“THD”), a
wholly owned subsidiary of the Company has concluded a Sale Agreement (the “Agreement”),
with Balwin Properties Limited (the “Purchaser”) in terms of which THD has agreed to sell
Portion 3 & 4 of Erf 3465 Umhlanga Rocks; Portion 6 of ERF 3465 Umhlanga Rocks,
Remainder of Erf 3434 Umhlanga Rocks, Remainder of Erf 3465 and 3457 Umhlanga Rocks,
measuring 64 hectares in extent (collectively the “Property”) for a total purchase price of
R167,264,956.96 (the “Transaction”).

2.     OVERVIEW OF THE PROPERTY

The Property is situated within the Izinga Precinct north of Umhlanga Ridge and above the
town of Umhlanga Rocks. The Property is designed for clients looking for affordable living
combined with the tranquillity of coastal life and a rich natural environment. The Property is
minutes away from the commercial hub of Umhlanga.

A portion of the Property is zoned and will be serviced for immediate construction of 335
residential apartments. The Purchaser intends to obtain rights for a minimum of 1 286
residential apartments which will be built on the remainder of the Property and all phases will
be linked into one development.

3.     RATIONALE FOR THE TRANSACTION

THD has been negotiating with the Purchaser since 2018 to acquire the Property which is the
last remaining significant portion of developable land with an Umhlanga address. The sale of
the Property is aligned with the THD strategy of land conversion for residential and commercial
development and in the ordinary course of its business.

4.     PURCHASE CONSIDERATION

4.1    The total consideration payable by the Purchaser to THD in terms of the Agreement is
       R167,264,956.96 (excluding VAT) (“Purchase Consideration”), which is to be paid by
       the Purchaser on date of registration of transfer of the Property.

4.2.   The Purchase consideration is payable as follows –

4.2.1. R16,726,495.70 refundable deposit payable into the Conveyancer’s Trust Account by
       6 March 2020;
4.2.2. R117,085,469.87 to be secured by way of a bank guarantee by 6 March 2020; and
4.2.3. R33,452,991.39 to be secured by guarantee or paid in cash to the Conveyancer’s Trust
       Account by 6 March 2020.
5.     THE APPLICATION OF SALE PROCEEDS

The proceeds of the Transaction will be used to repay debt and to perform the infrastructure
obligations in terms of the Agreement.

6.     CONDITIONS PRECEDENT TO THE TRANSACTION

6.1.   Purchaser to obtain board approval by 28 February 2020;
6.2.   Purchaser to obtain bank funding approval by 28 February 2020;
6.3.   The Seller to obtain consent from the Mortgagee to sell the Property by 28 February
       2020;
6.4.   The Seller to obtain a Water-Use License by 13 March 2020;
6.5.   The Seller to obtain Local Authority approval for rezoning of Portion 6 of Erf 3434
       Umhlanga Rocks to “Education” by 28 February 2020; and
6.6.   The Seller to obtain the necessary Local Authority certificates by 28 February 2020 to
       transfer the Property.

7.     EFFECTIVE DATE OF THE TRANSACTION

In terms of the Agreement, the effective date of the Transaction will be the date that all
Conditions Precedents are fulfilled or waived.

8.     JSE CATEGORISATION

The Transaction is categorised as a category 1 transaction in terms of the JSE Listings
Requirements and accordingly shareholder approval will be required.


Tongaat
21 February 2020

Sponsor
Investec Bank Limited

Date: 21-02-2020 08:00:00
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.