- the subsequent listing of all of the shares of the company as a primary listing on the Retail REITs sector of the JSE (the JSE Listing ); and

Transcription

1 African Land Investments Limited (Incorporated in the Republic of South Africa) (Registration number 2013/068973/06) JSE share code: ALI ISIN: ZAE (Approved as a REIT by the JSE) ( African Land or the company or Afland ) ABRIDGED PROSPECTUS OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR SHARES AND LISTING OF AFRICAN LAND ON THE JSE LIMITED AND THE LUSAKA STOCK EXCHANGE AND REVISED DATES AND TIMES OF THE OFFER PERIODS, LISTING DATES AND OTHER SALIENT DATES This abridged prospectus relates to the prospectus issued by the company in compliance with the South African Companies Act, 2008 (Act 71 of 2008), as amended (the South African Companies Act ), the Companies Regulations, 2011 promulgated in Government Gazette No in terms of section 223 of the South African Companies Act (the South African Companies Regulations ), the Zambian Companies Act, Chapter 388 of the Laws of Zambia (the Zambian Companies Act ), the Zambian Securities Act, Chapter 354 of the Laws of Zambia (the Zambian Securities Act ), the JSE Listings Requirements and the LuSE Listings Requirements (the prospectus ) for the purposes of providing information to the public regarding African Land and being issued in respect of: - a placement (the private placement ) to raise in aggregate not less than US$79.7 million (before preliminary expenses) payable in Rand or Kwacha, as the case may be, determined at the prevailing US$:Rand exchange rate, in respect of the JSE Listing, as defined below and the US$:Kwacha exchange rate, in respect of the LuSE Listing, as defined below, at 12:00 on the closing date of the offer (being 12:00 on the day which the offer to invited investors shall close, which is expected to be 7 November 2013 in respect of the JSE Listing and 22 November 2013 in respect of the LuSE Listing, with any delays to be announced on SENS) (the closing date of the offer ), as per the Bloomberg spot rate by way of an offer for subscription to invited investors for private placement shares in the company at an indicative subscription price of US$1.00 per private placement share with the final issue price to be determined by demand; - the subsequent listing of all of the shares of the company as a primary listing on the Retail REITs sector of the JSE (the JSE Listing ); and - the subsequent listing of certain of the shares of the company as a secondary listing on the LuSE (the LuSE Listing ). This abridged prospectus is not an invitation to the public to subscribe for and/or purchase shares in the company, but is issued in compliance with the South African Companies Act, the South African Companies Regulations, the Zambian Companies Act, the Zambian Securities Act, the JSE Listings Requirements and the LuSE Listings Requirements for the purposes of providing information to the public regarding African Land and to invited investors in relation to the private placement. Invited investors will be contacted by and will receive application forms to participate in the private placement from the book runner, in respect of the listings, Java Capital, or from the joint book runner, in respect of the LuSE Listing, African Alliance. As the private placement constitutes an initial public offering as regulated by the South African Companies Act, it is accompanied by a registered prospectus. This announcement contains the salient information in respect of African Land, which is more fully described in the prospectus which will be made available to invited investors. For a full appreciation and understanding of African Land, the private placement and the listings, the prospectus should be read in its entirety. Terms defined in the prospectus shall bear the same meaning in this abridged prospectus. 1. Introduction The JSE has granted African Land a primary listing of all its issued shares (excluding ordinary shares of no par value which will be listed shortly after the JSE listing date) in the Retail REITs sector of the JSE, in terms of the FTSE classification, under the abbreviated name Afland with JSE share code ALI and ISIN code ZAE with effect from the commencement of trading on the JSE on Friday, 15 November 2013, subject to the company having satisfied the free float requirements in terms of paragraph 4.28(e) of the JSE Listings Requirements, being at least 20% of the company s issued share capital held by public shareholders. Subject to and conditional upon the approval by the JSE of the listing on the JSE and the requisite regulatory approvals being obtained from each of the Zambian Securities and Exchange Commission and the LuSE, certain of the issued shares of the company are expected to be listed on the LuSE from the commencement of trading on that stock exchange on Friday, 29 November 2013.

2 2. Overview of African Land The company was incorporated in South Africa as a public company on 23 April 2013 under the name African Land Investments Limited. With effect from 6 September 2013, the company had secured its first high quality property asset by acquiring the entire issued share capital of MHCL, which owns the Manda Hill Shopping Centre. Manda Hill Shopping Centre is situated in Lusaka, Zambia. It is the first regional shopping centre in Zambia and is the largest shopping centre in sub-saharan Africa outside of South Africa. The company s vision is to grow and extend its property portfolio in a manner that will be value accretive to shareholders. The company s medium-term objective is to grow its investment portfolio by acquiring quality retail, office, light industrial and mixed use properties in key sub-saharan African jurisdictions, initially including Angola, Ghana, Kenya, Mozambique, Nigeria and Zambia, as well as selected countries in Francophone Africa, such as Senegal. The company has secured a pre-emptive right on the Copperbelt City retail development in Kitwe, Zambia, which is scheduled for completion in the third quarter of The company will focus on large and defensive retail and office properties that are occupied mostly by multinational and South African companies, as well as light industrial properties where long-term leases to blue-chip multinational and South African companies have been secured. The company s long term objective is to establish a competitive advantage in its ability to secure large quality property assets. The company s management team is well positioned to establish a portfolio of large quality property assets in sub-saharan Africa. The company has at its disposal, executives, on the ground property managers and portfolio administrators with the experience and expertise required to operate in the various African jurisdictions identified and complemented by a board of s with experience in property and Africa. Furthermore, the company will aim to minimise any tax leakage with effective tax planning. The financial year end of the company and group is 30 September. Accordingly, the first financial year of the company will be 30 September The company is targeting property assets exceeding US$1 billion over the next five years. The company aims to build a geographically and sectorally well diversified property portfolio predominantly in sub-saharan Africa across 6 markets outside of South Africa. 3. Prospects Until additional assets are acquired, the performance of the company will be driven by the performance of the Manda Hill Shopping Centre. The company has secured a pre-emptive right to purchase the m 2 Copperbelt City retail development in Kitwe, Zambia. The real estate development is located in Kitwe, near a main transport route to Chingola, and further, the southern DRC. Kitwe is located in the centre of 7 highly urbanized districts (all within a 75km radius), more commonly known as the Copperbelt Province. Management have identified a tangible pipeline of properties which will be for sale in key sub Saharan African markets including Nigeria, Kenya and Ghana, in the retail, office and light industrial sectors. The prospective pipeline has an approximate value of $300 million in Generally, acquisitions will only be considered by the company if they are yield enhancing, and the group will not embark on any speculative development activity. The executive s of African Land have entered into negotiations with developers, private equity real estate funds and reputable real estate brokerage firms for projects nearing completion in Ghana, Nigeria, Mozambique and Kenya. African Land is at various stages of discussion with these developers and real estate brokerage firms and will aim to secure forward-sale and pre-emptive rights to purchase these assets once they are complete and have a twelve month operating history. African Land will consider minority interests in properties if it can provide asset management expertise which will enhance the value of the target properties.

3 4. Summary forecast information Reflecting the performance of Manda Hill Shopping Centre, set out below are the summary forecast statements of comprehensive income of the group ( the forecasts ) for the year ending 30 September 2014 and the year ending 30 September Forecast for the year ending Forecast for the year ending 30 Sep Sep 2015 Total revenue Property operating expenses ( ) ( ) Net property and related income Administrative expenses ( ) ( ) Net operating profit Changes in fair values ( ) (38 369) Investment property - - Straight-line rental income accrual ( ) (38 369) Net finance charges ( ) ( ) Net profit Reconciliation between earnings, headline earnings and distributable income Profit for the year attributable to shareholders Change in fair value of investment property Headline earnings Straight-line rental income accrual ( ) (38 369) Distributable profit Amortisation of debt structuring fee Distributable income Number of shares in issue Weighted average number of shares in issue US$ US$ Basic and diluted earnings per share (US$ cents) Headline earnings per share (US$ cents) Distributable income per share (US$ cents) The figures set out above are extracted from detailed forecasts for the year ending 30 September 2014 and 30 September 2015 and have been reported on by the independent reporting accountant Grant Thornton. The detailed forecasts, the independent reporting accountant s report on the detailed forecast and the assumptions on which the detailed forecasts are based, are set out in the prospectus. 5. Asset management African Land s asset management function is undertaken by the executives based in Johannesburg. The company s executives have experience in African property as well as in doing business in Africa. As the property portfolio grows, the company will continue to utilise an internal asset management model and will strategically increase its staff complement where required. 6. Property management Manda Hill is internally managed by an experienced on-the-ground centre management team, tenant co-ordinators and accounts department. The team at the centre interacts with tenants and shoppers on a daily basis and has established relationships with all tenants.

4 7. Share capital Immediately prior to the private placement and the JSE Listing and the LuSE Listing: - the authorised share capital of the company will comprise ordinary shares of no par value; - the issued share capital of the company will comprise ordinary shares of no par value; - the stated capital of the company will amount to US$ ; and - there will be no treasury shares in issue. Assuming that the private placement is fully subscribed for at the indicative subscription price of US$1.00 per private placement share, immediately after the private placement and the JSE Listing and the LuSE Listing: - the issued share capital of the company will comprise ordinary shares of no par value, of which ordinary shares of no par value will be listed (the balance of ordinary shares of no par value to be listed shortly thereafter), the reason for such later listing is set out in paragraph 2 of Annexure 10 to the prospectus; - the stated capital of the company will amount to US$87.0 million; and - there will be no treasury shares in issue. On listing on the JSE, assuming that the private placement is fully subscribed for, the anticipated market capitalisation of the company will be approximately US$87.5 million. 8. Distribution policy The company intends making six-monthly dividend distributions, which are expected to be declared for the periods ending 31 March and 30 September each year, and paid within 4 months of the end of each such period. The company s current distribution policy is to distribute 100% of its total distributable profits as a distribution to the holders of its listed securities. 9. Details of the private placement The private placement to raise in aggregate not less than US$79.7 million (before preliminary expenses) payable in Rand or Kwacha, as the case may be, determined at the prevailing US$:Rand exchange rate, in respect of the JSE Listing and the US$:Kwacha exchange rate, in respect of the LuSE Listing, at 12:00 on the respective closing dates of the offer as per the Bloomberg spot rate by way of an offer for subscription to invited investors for private placement shares in the company at an indicative subscription price of US$1.00 per private placement share with the issue price to be determined by demand. The JSE Listing is subject to: - the achievement of a spread of public shareholders acceptable to the JSE, in terms of paragraph 4.28(e) of the JSE Listings Requirements, being at least 20% of the issued share capital of the company being held by public shareholders; and - a minimum subscription of private placement shares resulting in an amount of US$79.7 million being raised in terms of the private placement. The LuSE Listing is subject to: - the JSE Listing; and - the requisite regulatory approvals being obtained from each of the Zambian Securities and Exchange Commission and the LuSE. If the conditions precedent to the JSE Listing fail, the private placement and any acceptance thereof shall not be of any force or effect and no person shall have a claim of whatsoever nature against African Land or any other person as a result of the failure of any condition. If the conditions precedent to the LuSE Listing fail, the offer to invited investors in Zambia under the private placement and any acceptance thereof shall not be of any force or effect and no person shall have any claim of whatsoever nature against African Land or any person as a result of the failure of any condition. The private placement will not be underwritten.

5 10. Purposes of the offer The proceeds of the private placement, being a minimum subscription amount of US$79.7 million, will be utilised to: - settle the consideration for Manda Hill, which is payable in respect of the discharge of the MHCL shareholder dividend loan (of US$64.3 million) and partly settle (in an amount of US$12.7 million) the consideration payable in respect of the acquisition of the MHCL shareholder capital debentures (of US$78.7 million); and - set-off the preliminary and other expenses of US$2.7 million. 11. Revised dates and times of the offer and other salient dates Opening date of the JSE offer under the South African private placement (09:00) Closing date of the JSE offer under the South African private placement (12:00) Notification of allotments to subscribing invited investors in terms of the South African private placement Results of South African private placement released on SENS and on the website of the LuSE Results of the South African private placement published in the press Listing of shares and the commencement of trading on the JSE (09:00) Accounts at CSDP or broker updated and debited in respect of JSE dematerialised shareholders Opening date of the LuSE offer under the Zambian private placement (09:00) Closing date of the LuSE offer under the Zambian private placement (12:00) Notification of allotments to subscribing invited investors in terms of the Zambian private placement Results of Zambian private placement released on SENS and on the website of the LuSE Results of the Zambian private placement published in the press Listing of shares and the commencement of trading on the LuSE (expected to be 11:00) Accounts at CSD custodian or broker updated and debited in respect of LuSE dematerialised shareholders 2013 Thursday, 31 October Thursday, 7 November Friday, 8 November Monday, 11 November Tuesday, 12 November Friday, 15 November Friday, 15 November Monday, 18 November Friday, 22 November Monday, 25 November Tuesday, 26 November Wednesday, 27 November Friday, 29 November Friday, 29 November The above dates and times are South African dates and times and are subject to amendment. Any such amendment will be released on SENS and published in the press and published on the website of the LuSE. 12. Directors The full names, ages, business addresses, occupations and capacities of the s of African Land are outlined below: Full name, age and nationality Thamsanqa Tami Sokutu (49) South African Kevindra Kevin Teeroovengadum (39) Mauritian Mark Mario di Pasquale (29) South African Kenneth Lewis Ken Reynolds (54) South African Qualification Occupation Capacity Business address MSc (Plant Systematics and Advanced Ecology), UCT: Certificate in Environmental Management Theory, UCT: Senior Executive Programme, Wits/Harvard BSc, MSc, MBA, University of Leicester Finance Executive / Banker Property Executive Chartered Accountant chairman Chief executive officer Financial Chartered Financial Analyst (CFA) Charter holder BCom / CAIB(SA) Banker 59 16th Road, Midrand, 1685, Johannesburg South Africa 9 Gordon Hill Road, Parktown, Johannesburg 9 Gordon Hill Road, Parktown, Johannesburg Nedbank Corporate Property Finance, 4 th Floor, Block I, 135 Rivonia Road, Sandown, Sandton, 2196

6 Dominic Kwame Adu (50) Ghanaian Zaid Ghoul (44) Jordanian Ahmer Naushad (39) Canadian Fungai Ruwende (45) Zimbabwean Roderick High Ross Roddy McKean (57) British Chartered Accountant (ACA - England & Wales) University of London MSc. Economics University of Manchester (UK) - BA (Econ) Economics University of Jordan - B.SC. Degree in Accounting, Economics & Statistics Certified Public Accountant (CPA) Illinois Board of Examiners, USA Chartered Financial Analyst (CFA) Charter holder, USA Bachelor s degree in Hotel and Restaurant Administration (Washington State University), MBA, Washington State University, Professional Development Program, Executive Education Certification (Cornell University) Harvard Business School MBA, Business Administration, Activities and Societies: Africa Club University of Zimbabwe Bsc Eng Honours, Electrical Engineering, LLB (Hons) Edinburgh University, UK Admitted as a solicitor to the Supreme Courts of England & Wales, Scotland and Hong Kong Banker Investment Fund Manager Investment Fund Manager Investment Fund Manager Attorney No. 1 Aviation Road, Airport Residential Area, PMB CT470, Accra, Ghana MSJ Consulting, Rimal Building, Unit 2, The Walk, Jumeirah Beach Residence, Dubai, UAE Majid Al Futtaim Towers 2, Dubai UAE 10 5th Avenue, Parktown North, Johannesburg, 2193 ALN House, Eldama Ravine Gardens, Westlands, Nairobi 13. Prospectus The prospectus, dated 18 October 2013, which is available only in English, has been issued. The timetable as is set out in the prospectus has been amended and the timetable as is set out in paragraph 11 of this abridged prospectus is the correct timetable as at the date of this abridged prospectus. Any further amendment to the dates and times of the offer periods and/or listing dates will be released on SENS and published in the press and published on the website of the LuSE. Copies of the prospectus may be obtained between 08:30 and 17:00 on business days from Thursday, 31 October 2013 up to and including Friday, 29 November 2013, at the following addresses: - African Land The Pines 9 Gordon Hill Road, Parktown 2193, Johannesburg, South Africa - Java Capital 2 nd Floor, 2 Arnold Road, Rosebank, 2196, Johannesburg, South Africa - SA transfer secretaries Link Market Services South Africa Proprietary Limited 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001, South Africa - Zambian transfer secretaries Lusaka Stock Exchange Central Shares Depository Limited 3rd Floor Exchange Building, Cairo Road, Central Park, Lusaka, Zambia

7 31 October 2013 Corporate advisor, sole bookrunner in South Africa and joint bookrunner in Zambia and JSE sponsor reporting accountants and auditors SA and international attorneys and advisors as to South African tax JSE transaction sponsor Zambian attorneys and advisors as to Zambian tax property valuer LuSE sponsoring broker and joint bookrunner in Zambia