Proposed JSE delisting, offer to JSE shareholders

GRIT REAL ESTATE INCOME GROUP LIMITED (Registered by continuation in the Republic of Mauritius) (Registration number: C128881 C1/GBL) SEM share code: DEL.N0000 JSE share code: GTR LSE share code: GR1T ISIN: MU0473N00036 LEI: 21380084LCGHJRS8CN05 ("Grit" or the "Company")

 

PROPOSED JSE DELISTING, OFFER TO JSE SHAREHOLDERS, DISTRIBUTION OF CIRCULAR AND NOTICE OF GENERAL MEETING

 

INTRODUCTION

 

Shareholders of Grit ("Shareholders") are advised that the Company is pursuing a proposed delisting from the main board of the JSE Limited by means of an offer by Botswana Development Corporation Limited and Zep-Re (PTA Reinsurance Company) (the "Offerors"), in terms of which the Offerors will offer to acquire issued ordinary shares of the Company ("Shares") held by Shareholders on the JSE share register (the "JSE Register"), for a consideration of R14.90 per Share ("Offer"). Should the Offer become unconditional, the Company will terminate the listing of its Shares on the main board of the JSE (the "Delisting").

 

The Company will retain its listing on the Official Market of the Stock Exchange of Mauritius Ltd (the "SEM") and the Main Market of the London Stock Exchange (the "LSE"). Shareholders on the JSE Register may retain their investment in Grit and can do so by transferring their existing shares to either the SEM share register ("SEM Register") or the LSE share register ("LSE Register") before the Delisting. Such Shareholders should refer to the exchange control provisions contained in the Circular (as defined below) in this regard.

 

The Offer is subject to a number of conditions precedent, including, valid Offer acceptances of an aggregate of less than or equal to 7,000,000 Shares, which constitutes 2.21% of the total issued Shares of the Company as at the date of this announcement, to the extent that this condition is not waived.

 

Shareholders on the JSE Register who do not accept the Offer or do not transfer their Shares to either the SEM Register or the LSE Register before the date of the Delisting will have their shareholding transferred to the SEM Register and will be issued with a new Share certificate on or about the date of the Delisting. Shareholders should refer to the exchange control provisions contained in the Circular (as defined below) in this regard.

 

Shareholders should note that they shall be prohibited from transferring their Shares from the LSE Register or the SEM Register to the JSE Register from Thursday, 11 June 2020 to Friday, 24 July 2020, both days inclusive, and shall be prohibited from transferring their Shares from the JSE Register to the SEM Register or the LSE Register from Wednesday, 22 July 2020 to Wednesday, 29 July 2020, both days inclusive.

 

RATIONALE FOR THE OFFER AND THE DELISTING

 

Grit is currently listed on three exchanges, which places a cost and administrative burden on the Company (excessive management time is spent on regulatory compliance across the three exchanges and excessive costs are spent on three sets of advisors). The cost and complexity of being listed on three exchanges does not currently offer commensurate benefits and accordingly erodes shareholder value. Furthermore, trading in Shares on the JSE is illiquid and has been illiquid for an extended period of time. The Offerors and the board of directors of Grit ("Grit Board") are of the view that the Offer and subsequent Delisting will -

 

·        eliminate the costs and administrative burden associated with a listing on the JSE; and

 

·        consolidate the three share registers into two registers, which is anticipated to have a positive effect on liquidity, and therefore will be in the best interests of Grit and its Shareholders.

 

FUNDING OF THE OFFER

 

The Offer will be funded by the Offerors out of their own cash resources.

 

DISTRIBUTION OF CIRCULAR AND NOTICE OF GENERAL MEETING

 

A circular to Shareholders detailing the Offer and the Delisting (the "Circular"), will be distributed to Shareholders today, Thursday, 11 June 2020. The Circular also incorporates a notice convening a general meeting of Shareholders on the JSE Register (the "General Meeting"), as required by the JSE Listings Requirements, for the purpose of considering, and, if deemed fit, passing, with or without modification, the resolutions contained in such notice. Shareholders should note that only Shareholders on the JSE Register are eligible to vote at the General Meeting.

 

Notice is hereby given that the General Meeting will be held at 10:00am (Mauritian time) (8:00am South African time and 7:00am UK time) on Friday, 10 July 2020 at the offices of the Company, 3^rd Floor, La Croisette Shopping Centre, Grand Baie, Mauritius, to consider and, if deemed fit, to pass, with or without modification, the requisite resolutions required for the Offer and the Delisting. A conference call facility will also be arranged to allow Shareholders to listen in to, and ask questions in relation to, the business of the General Meeting. Dial in details for the conference call will be made available on SENS, the website of the SEM and via the Regulatory Information Service of the LSE in due course.

 

The Circular is available in English only. Copies may be obtained during normal business hours from the registered office of the Company at c/o Intercontinental Fund Services Limited, Level 5, Alexander House, 35 Cybercity, Ebéne, 72201, Mauritius, from the offices of the Company's JSE sponsor and South African corporate adviser, PSG Capital at 1^st Floor, Ou Kollege Building, 35 Kerk Street, Stellenbosch, 7600, South Africa and at 2^nd Floor, Building 3, 11 Alice Lane, Sandton, 2196 South Africa and from the offices of the Company's UK Financial Adviser, finnCap Limited at 60 New Broad Street, London EC2M 1JJ, United Kingdom, from Thursday, 11 June 2020 until Wednesday, 29 July 2020 (both days inclusive). A copy of the Circular will also be available on the Company's website (https://grit.group/documents-circulars/).

 

The Circular does not constitute, envisage, or represent an offer to the public in terms of the Mauritian Securities Act, 2005 or in terms of the Mauritian Securities (Takeover) Rules 2010

 

SUMMARY OF ACTION REQUIRED BY SHAREHOLDERS ON THE JSE REGISTER REGARDING THE OFFER

 

Shareholders who are in doubt as to what action they should take, are advised to  consult their broker CSDP, nominee, banker, legal advisor, accountant or other professional advisor immediately.

 

The Offer will be open for acceptances from 9:00 am (South African time) on Friday, 3 July 2020 and will close at 12:00 pm (South African time) on Friday, 24 July 2020. Any acceptances of the Offer received prior to the fulfilment or waiver, as the case may be, of the conditions precedent to the Offer will be subject to such conditions being fulfilled or waived, as the case may be.

 

Full details of the action required by Shareholders on the JSE Register regarding the Offer is contained in the Circular.

 

INDEPENDENT EXPERT AND THE VIEW OF THE GRIT BOARD ON THE OFFER AND DELISTING

 

In accordance with the JSE Listings Requirements, the Grit Board has appointed an independent expert to opine on the terms and conditions of the Offer. The independent expert has concluded that the terms and conditions of the Offer are fair to Shareholders on the JSE Register.

 

The Grit Board, taking into account the fairness opinion of the independent expert, has considered the terms and conditions of the Offer and is unanimously of the opinion that the terms and conditions of the Offer are fair to Shareholders on the JSE Register.

 

The Grit Board is also of the opinion that the Delisting is in the best interests of Shareholders on the JSE Register.

 

Accordingly, the Grit Board recommends that Shareholders on the JSE Register vote in favour of the resolutions to be proposed at the General Meeting.

 

The directors of Grit (who are permitted to vote), in their personal capacities, intend to vote the Shares beneficially owned by them in favour of the resolutions to be proposed at the General Meeting, and will consequently move their shares to SEM.

 

Bronwyn Corbett, Chief Executive Officer of GRIT Real Estate Income Group Limited, commented:

"Grit is currently listed in London, South Africa and Mauritius. Poor trading liquidity in our shares and the complexity of being listed on three exchanges has become increasingly onerous to the point where it no longer warrants the considerable cost and administrative burden on the Company and erodes shareholder value.

 

The capital markets in London provide a deeper and broader pool of capital and the Board believes that the Company's cost of equity and cost of debt will be considerably lower in this jurisdiction. We will however retain the listing on the SEM in Mauritius, an investment grade country.

 

The Company's proposed delisting from the JSE paves the way for the Group to move trading in its shares up to the Premium Listing Segment of the Main Market of the London Stock Exchange, which is expected to facilitate the Group's eligibility for inclusion in the main FTSE UK Index series, which is expected to further improve liquidity in the Company's shares and further diversify Grit's shareholder base."

 

IMPORTANT DATES AND TIMES

 

Shareholders are referred to the table below setting out important dates and times in relation to the Offer, Delisting and the General Meeting. Capitalised terms used below and elsewhere in this announcement and that are not otherwise defined, bear the meaning ascribed to them in the Circular.

 

	2020
Record date to determine which Shareholders are eligible to receive the Circular	Friday, 5 June
Circular posted to Shareholders and announced on SENS, on the SEM website and via the Regulatory Information Service on	Thursday, 11 June
Last day to trade in order to be eligible to vote at the General Meeting	Tuesday, 30 June
Record date for Voting	Friday, 3 July
Latest date and time for Certificated Shareholders and Dematerialised Shareholders with Own-name Registration on the JSE Register to lodge JSE Forms of Proxy in respect of the General Meeting	8:00am South African time on Wednesday, 8 July
General Meeting to be held at 10:00am (Mauritian time) (8:00am South African time and 7:00am UK time) on	Friday, 10 July
Publication of results of the General Meeting	Friday, 10 July
In respect of the Offer and Delisting
Offer opens	9:00am South African time on Friday, 3 July
Last day to trade to be entitled to participate in the Offer	Tuesday, 21 July
Trading of Shares on the JSE suspended with effect from commencement of trade on	Wednesday, 22 July
Record date for the Offer	Friday, 24 July
Forms of acceptance, surrender and transfer to be received by South African Transfer Secretaries by	12:00pm South African time on Friday, 24 July
Closing date of the Offer	12:00pm South African time on Friday, 24 July
Unconditional Date announcement (confirmation of results of Offer and if the Offer has become unconditional) expected to be published on SENS, on the SEM website and via the RIS	3:00pm South African time on Friday, 24 July
Results of the Offer published in the press	Monday, 27 July
Last date on which Dematerialised Shareholders on the JSE Register will have their accounts credited with the Offer Consideration	Tuesday, 28 July
Last date on which Certificated Shareholders on the JSE Register will have the Offer Consideration electronically transferred to them or cheques issued and posted to them	Tuesday, 28 July
Delisting	Wednesday, 29 July

 

Notes:

 

1.    The above dates and times are subject to amendment. Any such amendment will be released on SENS, the SEM website and via RIS.

 

2.    Shareholders on the JSE Register are referred to the Circular for information on the action required by them in respect of the General Meeting.

 

3.    Shareholders on the JSE Register are referred to the Circular for information on the action required by them in respect of the Offer.

 

4.    Shareholders shall be prohibited from transferring their Shares to the JSE Register from Thursday, 11 June 2020 to Friday, 24 July 2020, both days inclusive. Shareholders shall be prohibited from transferring their Shares from the JSE Register from Wednesday, 22 July 2020 to Wednesday, 29 July 2020, both days inclusive.

 

5.    Shareholders on the JSE Register who have accepted the Offer may not withdraw that acceptance.

 

6.    Should the Offer become Unconditional, Shares may not be dematerialised or rematerialised on the JSE Register after the last day to trade to be entitled to participate in the Offer.

 

By order of the Board

 

11 June 2020

 

FOR FURTHER INFORMATION PLEASE CONTACT:

Grit Real Estate Income Group Limited
Bronwyn Corbett, Chief Executive Officer	+230 269 7090
Darren Veenhuis, Head of Investor Relations	+44 779 512 3402
Morne Reinders, Investor Relations	+27 82 480 4541
Maitland/AMO - Communications Adviser
James Benjamin	+44 20 7379 5151
	[email protected]
finnCap Ltd - UK Financial Adviser
William Marle / Matthew Radley (Corporate Finance)	+44 20 7220 5000
Mark Whitfeld (Sales)	+44 20 3772 4697
Monica Tepes (Research)	+44 20 3772 4698
Perigeum Capital Ltd - SEM Authorised Representative and Sponsor
Shamin A. Sookia	+230 402 0894
Kesaven Moothoosamy	+230 402 0898
PSG Capital - JSE Sponsor and Corporate Adviser
David Tosi	+27 21 887 9602

 

The Company's LEI is: 21380084LCGHJRS8CN05

 

NOTES:

Grit Real Estate Income Group Limited is a leading pan-African real estate company focused on investing in and actively managing a diversified portfolio of assets in carefully selected African countries (excluding South Africa). These high-quality assets are underpinned by predominantly US$ and Euro denominated long-term leases with a wide range of blue-chip multi-national tenant covenants across a diverse range of robust property sectors.

 

The Company is committed to delivering strong and sustainable income for Shareholders, with the potential for income and capital growth. The Company is targeting a net total shareholder return inclusive of net asset value growth of 12.0% per annum.*

 

The Company currently holds primary listings on both the Main Market of the London Stock Exchange (LSE: GR1T) and on the Main Board of the Johannesburg Stock Exchange (JSE: GTR), while its listing on the Official Market of the Stock Exchange of Mauritius Ltd is termed as a secondary listing (SEM: DEL.N0000).

 

Further information on the Company is available at http://grit.group/

 

*These are targets only and are not a profit forecast, there can be no assurance that they will be met. Any forward-looking statements and the assumptions underlying such statements are the responsibility of the board of directors of the Company and have not been reviewed or reported on by the Company's external auditors.

 

Directors:

Peter Todd⁺ (Chairman), Bronwyn Corbett (Chief Executive Officer)*, Leon van de Moortele (Chief Financial Officer)*, Ian Donald Macleod⁺, Nomzamo Radebe, Catherine McIlraith⁺, David Love⁺, Sir Samuel Esson Jonah⁺, and Bright Laaka (Permanent Alternate Director to Nomzamo Radebe)

(* Executive Director) (⁺ independent Non-Executive Director)

Company secretary: Intercontinental Fund Services Limited

Registered address: c/o Intercontinental Fund Services Limited, Level 5, Alexander House, 35 Cybercity, Ebène, 72201, Mauritius

Transfer secretary (South Africa): Computershare Investor Services Proprietary Limited

Registrar and transfer agent (Mauritius): Intercontinental Secretarial Services Limited

UK Transfer secretary: Link Asset Services

Corporate advisor and JSE sponsor: PSG Capital Proprietary Limited 

SEM authorised representative and sponsor: Perigeum Capital Ltd

 

This notice is issued pursuant to the LSE Listing Rules, JSE Listings Requirements, SEM Listing Rule 11.3 and the Mauritian Securities Act 2005.  The Board of the Company accepts full responsibility for the accuracy of the information contained in this communiqué.