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JSE
REB
REB - Rebosis - Abridged Pre-Listing Satement - Listing of Rebosis on the JSE
Limited
REBOSIS PROPERTY FUND LIMITED
(formerly Business Venture Investments (Proprietary) Limited)
(Incorporated in the Republic of South Africa on 22 February 2010)
(Registration number 2010/003468/06)
JSE share code: REB ISIN Code: ZAE000156147
("Rebosis" or "the company" and together with its subsidiaries,"the group")
ABRIDGED PRE-LISTING SATEMENT - LISTING OF REBOSIS ON THE JSE LIMITED
Abridged pre-listing statement relating to:
- an offer to qualifying investors to subscribe for up to 165 851 703 Rebosis
linked units at an issue price R10 per linked unit ("the private
placement"); and
- the listing on the JSE of up to 219 744 713 Rebosis linked units ("the
listing").
This abridged pre-listing statement is not an invitation to the public to
subscribe for and/or acquire linked units in the company, but is issued in
compliance with the JSE Listings Requirements for the purposes of giving
information to the public in relation to Rebosis and to qualifying investors in
relation to the private placement.
This announcement contains the salient information in respect of Rebosis, which
is more fully described in the pre-listing statement which was released to
qualifying investors today ("the pre-listing statement"). For a full
appreciation of Rebosis, the private placement and the listing, the pre-listing
statement should be read in its entirety.
INTRODUCTION
Subject to obtaining a spread of public unitholders acceptable to the JSE, the
JSE has granted Rebosis a primary listing of up to 219 744 713 Rebosis linked
units in the "Real Estate - Real Estate Holdings and Development" sector of the
JSE lists, in terms of the FTSE classification, under the abbreviated name
"Rebosis", JSE share code "REB" and ISIN ZAE000156147 with effect from the
commencement of trade on Tuesday, 17 May 2011.
Rebosis Property Fund Limited (Registration number 2010/003468/06) was
incorporated as a private company on 22 February 2010 and converted to a public
company on 16 November 2010.
Established by the Billion Group, Rebosis will be the first black-managed and
substantially black-held property fund to be listed on the JSE.
The Rebosis group owns a portfolio of eight high grade retail and office
properties located in Gauteng and the Eastern Cape and valued at approximately
R3.6 billion in aggregate. The office buildings make up approximately 40% and
the retail malls approximately 60% of the value of the portfolio.
The five office buildings are well located in nodes attractive to government
tenants, four in Pretoria and one in Braamfontein. The offices are predominantly
let at market-related rentals to the National Department of Public Works, under
long leases providing for escalations at or exceeding 8% per annum. The office
portfolio represents a sovereign underpin to a substantial portion of the
earnings of Rebosis, shielding it from private sector risks of tenant insolvency
and default. The excellent landlord-tenant relationship that Rebosis enjoys
with national government is long-established, reflecting a track record of
efficient delivery of a professional service to government tenants. The arms-
length rentals, long duration to expiry of the current leases and the locations
of the buildings in government office nodes minimise the rent reversion risks
which are currently prevalent in the private sector.
The retail portfolio comprises three exceptional quality shopping malls
delivering secure, escalating income streams underpinned by strong anchor and
national tenants (including the likes of Pick `n Pay, Checkers, Game,
Woolworths, Edcon, Truworths, Mr Price Group, Foschini Group and Dischem). As
the retail portfolio is relatively recently constructed, it is anticipated to
deliver high levels of growth through the entrenchment of regional dominance and
by additional or growing revenue streams including turnover rentals, advertising
revenue and parking revenue.
The crown jewel in the portfolio is Hemingways Mall. Opened in East London in
2009, with a GLA of 80 000 m2, Hemingways Mall is a large, superbly located and
appointed mall. It has quickly established its position as the regionally
dominant retail destination for a large, under-serviced catchment area. Its
retail potential will unlock further as its regional dominance becomes more
entrenched.
Mdantsane City Shopping Centre is a high quality enclosed mall of 36 000 m2 in
Mdantsane Township in the Eastern Cape. Mdantsane is one of the largest
townships in South Africa. The mall is well situated and accessible to
residents, and offers a quality retail shopping experience and entertainment
destination unrivalled in Mdantsane, convenient to residents who previously had
to travel to the CBD of East London for a comparable retail experience.
Built above a taxi rank in Pretoria, Bloed Street Mall is a well-tenanted
commuter mall with high volumes of foot traffic and potential for expansion on
adjacent land.
The listing and private placement of Rebosis offers investors an attractive
initial 8.6% forward yield (calculated for the 12 months to 31 May 2012) on its
linked units, with forecast growth in distributions of 12% in 2012, representing
a forecast return for investors considerably in excess of expected averages for
the real estate sector.
The group is well positioned to immediately take advantage of opportunities for
acquisitive and organic growth. This acquisitive growth will come, in part, from
Rebosis` right of first refusal to acquire all properties developed by Billion
Property Group, which gives Rebosis the ability to cherry-pick from Billion
Property Group`s pipeline of high quality property developments which are
anticipated to have a development cost of R14bn. This exposure to new
developments will be achieved without exposing Rebosis or its investors to
development risk. There is, however, no obligation on Rebosis to acquire any
properties from Billion Property Group and the governance and approval
requirements of the JSE and the board of Rebosis will ensure that investment
decisions by Rebosis will be shielded from conflict of interest concerns.
The main objectives of the private placement and listing are to:
- introduce the first black-managed and substantially black-held listed
property fund to the JSE;
- allow Rebosis access to the equity markets to finance its planned future
growth;
- raise approximately R1.66 billion in order to facilitate the acquisition of
the additional properties and restructure and reduce the group`s overall
gearing levels;
- provide qualifying investors the opportunity to participate directly in
Rebosis` income streams and future capital growth;
- increase the profile of the group and its portfolio across the investor
community; and
- allow Rebosis unitholders to unlock value through the potential acquisition
of the development properties within Billion Property Group.
BACKGROUND TO REBOSIS
Billion Group was established in 1999 by Mr Sisa Ngebulana, the Chief Executive
Officer of Rebosis. His holding is held through the Amatolo Family Trust that
currently holds the entire issued share capital in Billion Group and,
immediately prior to listing, will hold 100% of the issued Rebosis linked units
(which holding will be reduced to 20.8% if the private placement is fully
subscribed).
Over the last 12 years Mr Ngebulana has successfully grown the Billion Group`s
portfolio of office and retail properties, through a combination of acquisitions
and property developments, from the initial acquisition of the Liberty Life
building in 2003 to the current portfolio of high grade properties valued in
excess of R3.6 billion.
Rebosis was incorporated on 22 February 2010 as a shelf company and was
converted into a public company on 16 November 2010. On 2 December 2010 the
entire issued share capital in the Company was acquired by the Amatolo Family
Trust with the intention of using the Company as the vehicle to list the Billion
group`s portfolio of office and retail properties.
LEADERSHIP AND MANAGEMENT
Mr Ngebulana is the Chief Executive Officer of Rebosis, bringing to the group
the same strong leadership under which the Billion Group grew to a multi-billion
Rand property company. His entrepreneurial and deal making skills will be
utilised to grow the business and the assets under management.
The entrepreneurial flair of the Company will be ably focused by Mr Mike Rodel
as Chief Operating Officer and Ms Janys Finn as Chief Financial Officer. Both Mr
Rodel and Ms Finn have significant experience in the listed property sector with
larger listed entities and will bring to Rebosis a strong focus on institutional
controls and corporate governance.
The asset management and property management of the group`s portfolio will
continue to be undertaken by the same team that has managed this portfolio prior
to it being transferred to Rebosis.
DISTRIBUTION POLICY
It is the directors` intention to make bi-annual interest distributions, which
are expected to be declared for the periods ended February and August. These
interest distributions will be payable by the end of May and November
respectively.
PROSPECTS
The directors are of the view that the existing portfolio balances defensive
characteristics with high growth potential. The sovereign underpin to the office
rental streams represents exceptional stability. The relatively new retail
portfolio offers high growth potential as regional dominance is entrenched and
additional or increasing revenue streams are generated including turnover
rental, advertising revenue, parking revenue and the like.
Two of the three retail centres are in the Eastern Cape, reflecting a degree of
regional concentration. The board is comfortable with this, given that the
Eastern Cape, which is the fourth largest contributor to South Africa`s Gross
Domestic Product, has a significant under supply of retail services.
(Feasibility Study: Demographics and Retail Potential, July 2008, by Fernridge
Consulting). However, the intention is to further diversify regional retail
exposure through acquisitions.
The directors of Rebosis are of the opinion that the opportunities for growth
and the expansion of the portfolio are favourable for the following reasons:
- Rebosis will benefit from a right of first refusal to acquire, at market
related prices, a number of high grade retail and mixed use developments
that are currently in the Billion group pipeline;
- given Rebosis` credentials as the only black-managed listed property fund,
the board anticipates that the Company will be in a position to take
advantage of opportunities to secure long term leases over properties with
government tenants, as Billion group has successfully done in the past;
- as a significantly B-BBEE empowered, listed property fund, Rebosis is an
ideal BEE partner to other listed property funds and institutional property
investors; and
- Rebosis is positioned to offer liquidity to BEE players in the property
sector who do not have the critical mass to list on the JSE, through
acquisition of their government portfolios in consideration for linked
units in Rebosis.
DETAILS OF THE OFFER AND SUBSCRIPTION UNDERTAKINGS
The listing is being preceded by a private placement in order to afford
qualifying investors the ability to participate in the equity of Rebosis.
An offer to qualifying investors to subscribe for up to 165 851 703 Rebosis
linked units at an issue price of R10 per linked unit.
The minimum amount which, in the opinion of the directors, must be raised
pursuant to the private placement is R1 600 000 000.
As at the date of issue of this pre-listing statement, Rebosis has received
binding subscription undertakings in an aggregate amount of R868 409 440
equating to 86 840 944 linked units at R10.00 per linked unit.
The subscription undertakings have been received from the following investors
and in the following amounts:
- Public Investment Corporation: R217 102 360 (21 710 236 linked units);
- Stanlib: R 217 102 360 (21 710 236 linked units;
- Old Mutual: R217 102 360 (21 710 236 linked units); and
- FirstRand Bank Limited (acting through its Rand Merchant Bank division):
R217 102 360 (21 710 236 linked units).
In terms of the subscription undertakings the relevant investors have each
undertaken to subscribe for a minimum of 21 710 236 linked units and Rebosis has
undertaken to allocate to each of these investors that number of linked units.
A commitment fee equal to 1% of the subscription commitment provided is payable
to each of these investors.
PURPOSES OF THE LISTING AND PRIVATE PLACEMENT
Rebosis has been established as a vehicle to facilitate the listing of the
portfolio. The purpose of the offer is to raise a minimum amount of R1 600 000
000 and a maximum of R1 658 517 027 by way of private placement of linked units,
which capital will be used to facilitate the acquisition of the additional
properties and to restructure and reduce the group`s overall gearing levels. R61
million of the capital raised will be used to part settle a loan made by the
Amatolo Family Trust to Rebosis in the context of the restructure.
CONDITIONS PRECEDENT TO THE LISTING AND PRIVATE PLACEMENT
The private placement and the listing are conditional upon the minimum amount of
R1 600 000 000 being received and on the minimum spread requirements of the JSE
being satisfied.
SALIENT DATES AND TIMES
The table below sets out the salient dates and times in respect of the private
placement and the listing.
2011
Opening date of the private placement (09:00) on Tuesday, 3 May
Closing date of the private placement (16:00)* Wednesday, 11 May
on
Listing date (09:00) on Tuesday, 17 May
* Applicants should consult their broker or CSDP to ascertain the timing for
submission of applications as this may vary depending on the broker or CSDP in
question.
DIRECTORS
The full names, nationalities and business addresses of the directors of Rebosis
are set out below.
Directors of Rebosis
Anna Mokgokong Independent non-executive chairman
Nationality South African
Business address First Floor, Block 1, Atterbury
Estate, 19 Frikkie de Beer Street,
Menlyn 0181, Pretoria
Sisa Ngebulana Chief executive officer
Nationality South African
Business address 3rd Floor, Palazzo Towers West,
Montecasino Boulevard, Fourways
Janys Finn Financial director
Nationality South African
Business address 3rd Floor, Palazzo Towers West,
Montecasino Boulevard, Fourways
Mike Rodel Chief operating officer
Nationality South African
Business address 3rd Floor, Palazzo Towers West,
Montecasino Boulevard, Fourways
Simon Fifield Non-executive director
Nationality South African
Business address 1 Merchant Place, Cnr Fredman &
Rivonia Road Sandton, 2196
Andile Mazwai Independent non-executive director
Nationality South African
Business address Barnard Jacobs Mellet, Ground
Floor, 24 Fricker Road, Illovo
Corner, Illovo
Ken Reynolds Non-executive director
Nationality South African
Business address 4th Floor, I Block, Nedbank, 135
Rivonia Road, Sandton
Jaco Odendaal Independent non-executive director
Nationality South African
Business address 15 Piet Retief Street, Stellenbosch
Sindiswa Zilwa Independent non-executive director
Nationality South African
Business address 3 Simba Road, Sunninghill, Sandton
PRE-LISTING STATEMENT
The pre-listing statement, which is available only in English will be issued on
Tuesday, 3 May 2011. Copies may be obtained during normal business hours between
08h30 and 17h00 from Tuesday, 3 May 2011 to Wednesday, 11 May 2011 from:
- the registered offices of Rebosis at 3rd Floor, Palazzo Towers West,
Montecasino Boulevard, Fourways, Johannesburg, 2191, South Africa;
- Java Capital (Proprietary) Limited at 2 Arnold Road, Rosebank,
Johannesburg, 2196, South Africa;
- Rand Merchant Bank (a division of FirstRand Bank Limited) at 1 Merchant
Place, corner Fredman Drive and Rivonia Road, Sandton, Johannesburg, 2196, South
Africa; and
- Computershare Investor Services (Proprietary) Limited at Ground Floor, 70
Marshall Street, Johannesburg, 2001, South Africa.
The document is also available on the following website: www.rebosis.co.za
Tuesday, 3 May 2011
Corporate advisor, legal advisor, sponsor and joint bookrunner
Java Capital
Corporate advisor and joint bookrunner
Rand Merchant Bank
Transaction sponsor
Deloitte & Touche
Independent reporting accountants and auditors
PKF Jhb Inc.
Attorneys
Cliffe Dekker Hofmeyr Inc.
Date: 03/05/2011 09:03:01 Produced by the JSE SENS Department.
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