Unit Holders vote in favour of new APEXHI C UNIT to facilitate BEE transaction

Posted On Tuesday, 26 September 2006 02:00 Published by eProp Commercial Property News
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ApexHi Properties Limited unit holders today voted in favour of the proposed new C unit, which paves the way for a BEE transaction that will see 10% of the voting rights in ApexHi held by Clearwater Capital and a broad-based BEE ownership scheme.

Gerald LeissnerAn overwhelming majority of unit holders present at the meeting voted in favour of introducing a new C unit to the existing A and B unit structure. All existing unit holders will receive 45 C units for every 100 A units held, and 55 C units for every 100 B units held, at no cost to the unit holder.

The primary purpose of the new C unit – which is the first and only unit of its kind in the sector – is to facilitate an achievable BEE transaction. “By voting in favour of the new structure, unit holders have agreed to sell 30% of their C units to the BEE partners at a unit price of R2 per unit,” says ApexHi CEO Gerald Leissner.

Of the 74 980 920 ApexHi C units to be acquired as part of the BEE transaction, 50% will be acquired by Clearwater Capital, a black investment company owned and controlled by the KwaZulu-Natal based Mehta family. The company brings established business and property expertise to the deal and is investing R10-million in equity in the BEE transaction.

The other 50% of the shares allocated to the BEE transaction will be acquired by a broad based ownership scheme. The proposed beneficiaries of this scheme are the Cida Empowerment Fund (Cida), the DEC Investment Holding company (DEC), MaAfrika Tikkunn, Makhulong A Matala and the Soul City Broad Based Empowerment Company.

“One of ApexHi’s key objectives in selecting the BEE shareholders was to ensure a significant proportion of the economic benefits that flow from the transaction would contribute to those communities and persons who have historically been, and continue to be, the most disadvantaged members of the South African economy,” says Leissner.

This introduction of the C unit makes the BEE transaction affordable. “Our market cap currently exceeds R7-billion, and a 10% equity stake would require a substantial investment of more than R700-million by a BEE partner. The cost of acquiring 30% of the C units based on R2,00 per unit is R150-million,” says Leissner.  

Once the scheme has been sanctioned at a court hearing, the new C units will be listed and traded from 9 October 2006.

While the basis for the calculation of distributions now changes to incorporate the C unit, distributions to existing A unit and B unit holders will not to be affected in the short term, as the C units only participate in the distributions when the annual income distribution exceeds R3,00. (Total distribution for the year to 30 June 2006 was R2,44.)

“Any distribution from R2,27 to R3,00 results in A units receiving 45% of the annual income distribution, and the B units receiving 55% of the annual income distribution, while the C units receive nothing. From R3,00, the A units receive R1,35, the B units receive R1,65 and the C units receive the balance of the income distribution, up to a maximum of R0,75. Any distribution above R3,75 will be split 36% to the A units, 44% to the B units and 20% to the C units.

Last modified on Monday, 05 May 2014 11:26

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