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Vukile -- reduction of vendor placement size
Posted Thu, 05 Apr 2012

Holders of Vukile linked units("linked unitholders")are referred to the circular issued by Vukile on 31 January 2012 ("circular"), the general meeting results announcement released on SENS on 29 February 2012 and the fulfilment of conditions precedent and early distribution announcement released on SENS on 9 March 2012, all relating to the acquisition by Vukile of twenty properties from Sanlam Life Insurance Ltd (the "acquisition")for R1.5 billion and the issue and allotment of Vukile linked units as part consideration for the acquisition in terms of a R956 million vendor placement(the "vendor placement")(collectively "the transaction"). The anticipated vendor placement will reduce from the initial indication of R956 million to approximately R864.9 million for two reasons. Firstly, Vukile has managed to bring the effective date of the Transaction forward, which is now anticipated to be towards the latter part of April 2012. In terms of the formula set out in the circular, to the extent that the effective date is prior to 1 June 2012, the purchase price will reduce by a factor of 0.017255% compounded daily (6.5% per annum). This has resulted in a reduction in the purchase price of c.R11.6 million. Secondly, linked unitholders are advised that Vukile has subsequently concluded the sale of three properties from its existing portfolio that will result in it receiving cash proceeds of R80 million within the next three months. Vukile management have decided that it is preferable to utilize bridging funding of R80 million pending receipt of the proceeds of the sale of the properties, at which point the funding will be repaid, rather than issue new linked units. Accordingly the vendor placement will decrease by R91.1 million, from R956 million to R864.9 million. The reduced vendor placement results in Vukile being able to conclude the transaction in a manner that is more favourable to linked unitholders. The analysis has confirmed that it is beneficial for linked unitholders to reduce the size of the vendor placement by using the temporary bridge debt funding as it increases the distribution per unit.