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Disposal of Letting Enterprise
TEXTON PROPERTY FUND LIMITED
Granted REIT status by the JSE
Incorporated in the Republic of South Africa
(Registration number 2005/019302/06)
Share code: TEX ISIN: ZAE000190542
(“Texton” or “the Company”)
DISPOSAL OF LETTING ENTERPRISE
1. INTRODUCTION
The Board of Directors of Texton (“Board”) is pleased to inform shareholders that the Company has
concluded a sale of letting enterprise agreement (“Sale Agreement”) with Slip Knot Investments 777
Proprietary Limited (“Purchaser”) for the disposal of the letting enterprise conducted by the Company in
respect of “the Property” or “Lion Roars”, being ERF 11322 and ERF 1698 of the Walmer Township in
Port Elizabeth, Eastern Cape (“the Letting Enterprise”), for a purchase consideration of R37.7 million
(“the Disposal”).
2. THE DISPOSAL
2.1 Details of the Property
The Property consists of:
- ERF 11322 of the Walmer Township in the Nelson Mandela Bay Metropolitan Municipality,
Port Elizabeth, Eastern Cape; and
- ERF 1698 of the Walmer Township in the Nelson Mandela Bay Metropolitan Municipality,
Port Elizabeth, Eastern Cape,
together with all buildings and alterations on the Property.
The gross lettable area of the Property is 4 072m2 and the weighted average net rental per square
metre is currently R90.00.
2.2 Rationale for the Disposal
Lion Roars is a relatively smaller property that comprises 1.1% of Texton’s gross lettable area (GLA).
As it is the only asset situated in the Eastern Cape, it is challenging to manage cost effectively. The
disposal of Lion Roars is also consistent with Texton’s strategic objective of owning quality, income
producing properties that would contribute towards reducing the exposure to the office sector through
responsible disposal.
2.3 Purchase consideration and effective date
The consideration payable by the Purchaser shall be an amount of R37.7 million in cash payable
upon registration of transfer of the Property to the Purchaser.
The effective date of the Disposal shall be the date of fulfilment or waiver, as applicable, of the last
of the suspensive conditions set out in paragraph 2.4 below.
2.4 Conditions precedent to the Disposal
The Disposal is subject to the fulfilment or waiver, as the case may be, of the following suspensive
conditions:
2.4.1. The Purchaser notifying Texton in writing that it has satisfied itself with the outcome of a due
diligence investigation in respect of the Letting Enterprise within 25 business days after the
date of signature of the Sale Agreement (“Signature Date”);
2.4.2. The first bondholder over the Property consenting to the release of the Property from the
operation of the mortgage bond thereon within 60 days after the Signature Date; and
2.4.3. Texton procuring that the tenant of the Property waives its right of first refusal in respect of the
Property and furnishing proof thereof to the Purchaser by not later than 90 days after the
Signature Date.
The suspensive conditions set out in paragraphs 2.4.2 and 2.4.3 above are imposed for the benefit
of Texton and are not capable of being waived or relaxed. The suspensive condition set out in
paragraph 2.4.1 is imposed for the benefit of the Purchaser, which shall be entitled to waive or relax,
as the case may be, fulfilment of such suspensive condition by giving written notice to Texton by not
later than the due date for fulfilment thereof.
2.5 Details pertaining to the Purchaser
The ultimate beneficial shareholder of the Purchaser is Jean Prieur Du Plessis. The Purchaser is not
a related party to Texton.
3. FINANCIAL INFORMATION
The value of the net assets attributable to the Disposal was R43.5 million as at 30 June 2019 (audited)
and R43.5 million as at 31 December 2019 (unaudited). The audited loss after tax attributable to the net
assets for the year ended 30 June 2019 was R1.8 million and the unaudited profit after tax attributable to
the net assets for the six months ended 31 December 2019 was R1.9 million.
The financial statements were prepared in accordance with International Financial Reporting Standards
and the Companies Act, 2008 (Act 71 of 2008), as amended.
4. INDEPENDENT VALUATION OF THE DISPOSAL
A valuation of the Property was performed on 30 June 2019 by Peter Parfitt representing Quadrant
Properties Proprietary Limited and Theuns Behrens of Real Insight Proprietary Limited who are
independent and are registered as professional valuers in terms of the Property Valuers Profession Act,
2000 (Act 47 of 2000). The Property was valued at an amount of R43.5 million.
This independent valuation is supported by the Board. The Board is not independent, and its members are
not registered as professional valuers or as professional associate valuers in terms of the Property Valuers
Profession Act, No 47 of 2000.
5. APPLICATION OF THE PROCEEDS OF THE DISPOSAL
The proceeds of the Disposal will be utilised by Texton to reduce debt.
6. CATEGORISATION OF THE DISPOSAL
The Disposal is classified as a Category 2 transaction in terms of the Listings Requirements of JSE Limited.
Johannesburg
28 April 2020
Sponsor
Merchantec Capital
Date: 28-04-2020 04:24:00
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