1. INTRODUCTION. (collectively the transactions ). The circular contains:

Transcription

1 ASCENSION PROPERTIES LIMITED (Incorporated in the Republic of South Africa) (Registration number 2006/026141/06) JSE share code: AIA ISIN: ZAE JSE share code: AIB ISIN: ZAE (Approved as a REIT by the JSE) ( Ascension or the company ) POSTING OF CIRCULAR, NOTICES OF A COMBINED LINKED UNITHOLDERS GENERAL MEETING, AN A LINKED UNITHOLDERS GENERAL MEETING, A B LINKED UNITHOLDERS GENERAL MEETING, AN A DEBENTURE HOLDERS SCHEME MEETING, A B DEBENTURE HOLDERS SCHEME MEETING, A COMBINED ORDINARY SHAREHOLDERS GENERAL MEETING, AN A ORDINARY SHAREHOLDERS GENERAL MEETING AND A B ORDINARY SHAREHOLDERS GENERAL MEETING 1. INTRODUCTION Linked unitholders are advised that the company has on Friday, 22 May 2015 posted a circular to linked unitholders (the circular ) relating to: - the conversion of the company s current A linked unit capital structure to an A ordinary share structure by: - the delinking of each A ordinary share from an A debenture; - the cancellation of each A debenture and concomitant waiver, for no consideration, by the A debenture holders of their right to be repaid the debt reflected in each A debenture or to receive any other form of compensation; - the capitalisation of the value allocated to each A debenture in the books of account of the company, equating to the issue price of each A debenture, to Ascension s stated capital account; and - termination of the Debenture Trust Deed, to be effected by way of a scheme of arrangement in terms of section 114 of the Companies Act, 71 of 2008 (the Companies Act ) which scheme is being proposed by the company between the company and its A debenture holders (the A debenture scheme ); - the conversion of the company s current B linked unit capital structure to a B ordinary share structure by: - the delinking of each B ordinary share from a B debenture; - the cancellation of each B debenture and concomitant waiver, for no consideration, by the B debenture holders of their right to be repaid the debt reflected in each B debenture or to receive any other form of compensation; - the capitalisation of the value allocated to each B debenture in the books of account of the company, equating to the issue price of each B debenture, to Ascension s stated capital account; and - termination of the Debenture Trust Deed, to be effected by way of a scheme of arrangement in terms of section 114 of the Companies Act, which scheme is being proposed by the company between the company and its B debenture holders (the B debenture scheme ); - the amendment of Ascension s Debenture Trust Deed to enable the schemes; - the adoption of a new Memorandum of Incorporation to give effect to the change in Ascension s capital structure; and - the subsequent termination of Ascension s Debenture Trust Deed, (collectively the transactions ). The circular contains: - a notice convening a combined linked unitholders general meeting, to be held at 09:30; - a notice convening an A linked unitholders general meeting, to be held at the later of 09:45 or 5 minutes after the completion of the combined linked unitholders general meeting; - a notice convening a B linked unitholders general meeting, to be held at the later of 10:00 or 5 minutes after the completion of the A linked unitholders general meeting; - a notice convening an A debenture holders scheme meeting, to be held at the later of 10:15 or 5 minutes after the completion of the B linked unitholders general meeting; - a notice convening a B debenture holders scheme meeting, to be held at the later of 10:30 or 5 minutes after the completion of the A debenture holders scheme meeting; - a notice convening a combined ordinary shareholders meeting, to be held at the later of 10:45 or 5 minutes after the completion of the B debenture holders scheme meeting; - a notice convening an A ordinary shareholders general meeting to be held at the later of 11:00 or 5 minutes after the completion of the combined ordinary shareholders general meeting; and

2 - a notice convening a B ordinary shareholders general meeting to be held at the later of 11:15 or 5 minutes after the completion of the A ordinary shareholders general meeting, on 2015 at the registered office of Ascension, 25th Floor, 9 Riebeeck Street, Cape Town, 8001, for the purposes of considering and, if deemed fit, passing, with or without modification, the resolutions required to approve the transactions, including the A debenture scheme and the B debenture scheme (collectively the schemes ). The circular is also available in electronic format on the company s website at 2. RATIONALE Retention of Ascension s REIT status under the JSE Listings Requirements In terms of the revised section 13 of the JSE Listings Requirements (which has been amended to cater for REIT legislation) the total consolidated IFRS liabilities of a REIT may not exceed 60% of its total consolidated IFRS assets. The liability constituted by a company s issued debentures is (in terms of IFRS) required to be taken into account in the calculation for the determination of such 60% threshold. By converting its capital structure, Ascension will, by virtue of the cancellation of its issued debentures, further reduce the ratio of its total consolidated liabilities to total consolidated assets from 77.73% to 41.53% (calculated as at the last practicable date with reference to the company s unaudited interim results for the six months ended 31 December 2014). This will ensure that the company s consolidated liabilities remain below the aforementioned 60% threshold requirement and will also provide the company with greater flexibility to take on additional debt should the need arise, and thus allow the company to pursue an acquisitive growth strategy whilst limiting potential shareholder dilution. Additional benefits for a capital conversion of Ascension Additional benefits in converting the company s current linked unit capital structure to an all share structure are to - - align the company s capital structure with the internationally recognised all equity REIT capital structures; - simplify the administration and accounting treatment of the company s capital structure as there is greater clarity on the tax treatment of distributions and the equity nature of the securities of the company; and - remove the cost structure associated with debentures. As announced on SENS on 24 February 2015, Rebosis Property Fund Limited ( Rebosis ) intends acquiring the entire issued linked unit capital of Ascension by way of: - a scheme of arrangement in terms of section 114 of the Companies Act between Ascension and Ascension A linked unitholders, in terms of which, if implemented, Rebosis will acquire the entire issued A linked unit capital of Ascension that Rebosis does not already own in exchange for Rebosis A ordinary shares for every 100 Ascension A linked units held (the A unit Rebosis scheme ); - a scheme of arrangement in terms of section 114 of the Companies Act between Ascension and Ascension B linked unitholders, in terms of which, if implemented, Rebosis will acquire the entire issued B linked unit capital of Ascension that Rebosis does not already own in exchange for Rebosis ordinary shares for every 100 Ascension B linked units held (the B unit Rebosis scheme ). To this end, circulars dated 22 April 2015 have been issued to each of Ascension A linked unitholders in respect of the A unit Rebosis scheme and Ascension B linked unitholders in respect of the B unit Rebosis scheme. As detailed in those circulars, - - the A unit Rebosis scheme is conditional upon the approval and implementation of the B unit Rebosis scheme; - however, the B unit Rebosis scheme is not conditional upon the approval or implementation of the A unit Rebosis scheme, with the result that - - if the B unit Rebosis scheme is not approved or implemented, Rebosis will not acquire any Ascension A or B linked units and Ascension will be required to retain its REIT status in order to avail itself of the tax treatment afforded to REITs; - if both the A unit Rebosis scheme and the B unit Rebosis scheme are approved and implemented, all of the Ascension A and B linked units will be - acquired by Rebosis; and subsequently - delisted from the JSE. This will result in Ascension no longer qualifying as a REIT (because its shares will no longer be listed on the JSE) but instead Ascension will become a subsidiary of Rebosis, which is a REIT, and thus Ascension will be regarded as a controlled company under section 25BB(1) of the Income Tax Act; - if the B unit Rebosis scheme is approved and implemented and the A unit Rebosis scheme is not, all of the Ascension B linked units will be acquired by Rebosis, with the intention that the company remains listed on the JSE as a REIT and thus should seek to retain its REIT status.

3 In light of the above, the board now proposes converting the linked unit structure of Ascension to a pure equity, share-only structure. In order to achieve this, the board proposes that: - the A debenture scheme be implemented such that the A debenture portion of the A linked unit is cancelled leaving an A ordinary share and the Debenture Trust Deed is automatically terminated; and - the B debenture scheme be implemented such that the B debenture portion of the B linked unit is cancelled leaving a B ordinary share and the Debenture Trust Deed is automatically terminated. 3. CONDITIONS PRECEDENT TO THE A DEBENTURE SCHEME The A debenture scheme will be subject to the following conditions precedent: - the approval of the A debenture scheme by the requisite majority of A debenture holders at the A debenture holders scheme meeting, as contemplated in section 115(2) of the Companies Act; - to the extent required, the approval of the implementation of such resolution by the Court as contemplated in section 115(3)(a) of the Companies Act; and - if applicable, the company not treating the aforesaid resolution as a nullity, as contemplated in section 115(5)(b) of the Companies Act; - the requisite majority of A and B linked unitholders collectively approving the relevant resolutions required to authorise: - the delinking of each of the company s A ordinary shares from an A debenture so as to no longer constitute an A linked unit; - the delinking of each of the company s B ordinary shares from a B debenture so as to no longer at the combined linked unitholders general meeting; - the requisite majority of A linked unitholders approving the relevant resolutions required to authorise: - the delinking of each of the company s A ordinary shares from an A debenture so as to no longer constitute an A linked unit; - the delinking of each of the company s B ordinary shares from a B debenture so as to no longer at the A linked unitholders general meeting; - the requisite majority of A and B ordinary shareholders collectively approving the relevant resolutions required to authorise the adoption of a new Memorandum of Incorporation at the combined ordinary shareholders general meeting; - the requisite majority of A ordinary shareholders approving the relevant resolutions required to authorise the adoption of a new Memorandum of Incorporation at the A ordinary shareholders general meeting; - in respect of the new Memorandum of Incorporation, no shareholder exercises its dissenting shareholder appraisal rights in terms of section 164 of the Companies Act; - the fulfilment (and/or waiver) of the conditions precedent to the B debenture scheme, save for any condition precedent to the B debenture scheme in terms of which the conditions precedent to the A debenture scheme are required to be fulfilled (and/or waived); and - all applicable regulatory and statutory approvals are obtained. The conditions precedent have been inserted in the company s favour. If a condition precedent is capable of being waived, the company may waive such condition, in its sole discretion, at any time prior to the fulfilment thereof. 4. CONDITIONS PRECEDENT TO THE B DEBENTURE SCHEME The B debenture scheme will be subject to the following conditions precedent: - the approval of the B debenture scheme by the requisite majority of B debenture holders at the B debenture holders scheme meeting, as contemplated in section 115(2) of the Companies Act; - to the extent required, the approval of the implementation of such resolution by the Court as contemplated in section 115(3)(a) of the Companies Act; and - if applicable, the company not treating the aforesaid resolution as a nullity, as contemplated in section 115(5)(b) of the Companies Act; - the requisite majority of A and B linked unitholders collectively approving the relevant resolutions required to authorise: - the delinking of each of the company s A ordinary shares from an A debenture so as to no longer constitute an A linked unit;

4 - the delinking of each of the company s B ordinary shares from a B debenture so as to no longer at the combined linked unitholders general meeting; - the requisite majority of B linked unitholders approving the relevant resolutions required to authorise: - the delinking of each of the company s B ordinary shares from an A debenture so as to no longer constitute a A linked unit; - the delinking of each of the company s B ordinary shares from a B debenture so as to no longer at the B linked unitholders general meeting; - the requisite majority of A and B ordinary shareholders collectively approving the relevant resolutions required to authorise the adoption of a new Memorandum of Incorporation at the combined ordinary shareholders general meeting; - the requisite majority of B ordinary shareholders approving the relevant resolutions required to authorise the adoption of a new Memorandum of Incorporation at the B ordinary shareholders general meeting; - in respect of the new Memorandum of Incorporation, no shareholder exercises its dissenting shareholder appraisal rights in terms of section 164 of the Companies Act; - the fulfilment (and/or waiver) of the conditions precedent to the A debenture scheme, save for any condition precedent to the A debenture scheme in terms of which the conditions precedent to the B debenture scheme are required to be fulfilled (and/or waived); and - all applicable regulatory and statutory approvals are obtained. The conditions precedent have been inserted in the company s favour. If a condition precedent is capable of being waived, the company may waive such condition, in its sole discretion, at any time prior to the fulfilment thereof. 5. SECTION 114 REPORTS The board has appointed Mazars Corporate Finance Proprietary Limited (the independent expert ) as the independent expert (which meets the requirements set out in section 114(2) of the Companies Act) to advise it on the proposed A debenture scheme and the proposed B debenture scheme and to compile a report in terms of section 114 of the Companies Act to the independent board concerning each of the schemes. The independent expert has prepared reports to the board in compliance with section 114(3) of the Companies Act, each of which report confirms that the A debenture scheme and the B debenture scheme are fair and reasonable to Ascension s debenture holders. The independent expert s reports are included in the circular. 6. VIEWS OF THE BOARD None of the directors have any conflict of interests in relation to the schemes and all directors are able to make impartial decisions in relation to the schemes. Accordingly, all directors are considered to be independent (as defined under Regulation 81 of the Takeover Regulations). The board, having considered the terms and conditions of the schemes, is in favour of the schemes and the transactions and recommends that linked unitholders vote in favour of the resolutions set out in the notices convening the combined linked unitholders general meeting, the A linked unitholders general meeting, the B linked unitholders general meeting, the A debenture holders scheme meeting, the B debenture holders scheme meeting, the combined ordinary shareholders general meeting, the A ordinary shareholders general meeting and the B ordinary shareholders general meeting (collectively the meetings ), to implement the schemes and the transactions. The directors of the company who hold linked units intend to vote in favour of the resolutions set out in the notices convening the meetings, to implement the schemes and the transactions. 7. SALIENT DATES AND TIMES The salient dates and times relating to the transactions are as set out below. Record date to receive this circular (together with the notices convening the meetings) Circular (together with the notices convening the meetings) posted Announcement relating to the issue of the circular (together with the notices convening the meetings) released on SENS 2015 Friday, 15 May Friday, 22 May Friday, 22May

5 Announcement relating to the issue of the circular (together with the notices convening the meetings) published in the press Last day to trade in order to be eligible to vote at the meetings Voting record date Last day to lodge forms of proxy for the combined linked unitholders general meeting (by 09:30) Last day to lodge forms of proxy for the A linked unitholders general meeting (by 09:45) Last day to lodge forms of proxy for the B linked unitholders general meeting (by 10:00) Last day to lodge forms of proxy for the A debenture holders scheme meeting (by 10:15) Last day to lodge forms of proxy for the B debenture holders scheme meeting (by 10:30) 2015 Monday, 25 May Friday, 5 June Friday, 12 June Last day to lodge forms of proxy for the combined ordinary shareholders general meeting (by 10:45) Last day to lodge forms of proxy for the A ordinary shareholders general meeting (by 11:00) Last day to lodge forms of proxy for the B ordinary shareholders general meeting (by 11:15) Last day for Ascension shareholders to give notice of their objections to the adoption of the new Memorandum of Incorporation by no later than 10:45 or 5 minutes after the completion of the B debenture holders scheme meeting, whichever is the later Combined linked unitholders general meeting held at 09:30 A linked unitholders general meeting held at the later of 09:45 or 5 minutes after the completion of the combined linked unitholders general meeting B linked unitholders general meeting held at the later of 10:00 or 5 minutes after the completion of the A linked unitholders general meeting A debenture holders scheme meeting held at the later of 10:15 or 5 minutes after the completion of the B linked unitholders general meeting B debenture holders scheme meeting held at the later of 10:30 or 5 minutes after the completion of the A debenture holders scheme meeting Combined ordinary shareholders general meeting held at the later of 10:45 or 5 minutes after the completion of the B debenture holders scheme meeting A ordinary shareholders general meeting held at the later of 11:00 or 5 minutes after the completion of the combined ordinary shareholders general meeting B ordinary shareholders general meeting held at the later of 11:15 or 5 minutes after the completion of the A ordinary shareholders general meeting Results of the meetings released on SENS Special resolutions submitted to CIPC for filing Results of the meetings published in the press Last date on which A debenture holders who voted against the A debenture scheme can require the company to seek court approval in terms of section 115(3)(a) of the Companies Act, if the A debenture scheme is approved by A debenture holders at the A debenture scheme meeting but at least 15% of the votes are voted against the A debenture scheme Last date on which B debenture holders who voted against the B debenture scheme can require the company to seek court approval in terms of section 115(3)(a) of the Companies Act, if the B debenture scheme is approved by B debenture holders at the B debenture scheme meeting but at least 15% of the votes are voted against the B debenture scheme Last date for A debenture holders who voted against the A debenture scheme to be granted leave by a court to apply for a review of the A debenture scheme in terms of section 115(3)(b) of the Companies Act, if the A debenture scheme is approved by A debenture holders at the A debenture holders scheme meeting Last date for B debenture holders who voted against the B debenture scheme to be granted leave by a court to apply for a review of the B debenture scheme in terms of section 115(3)(b) of the Companies Act if the B debenture scheme is approved by B debenture holders at the B debenture holders scheme meeting If no debenture holders exercise their rights in terms of section 115(3)(a) or section 115(3)(b) of Wednesday, 24 June Wednesday, 24 June Tuesday, 30 June Tuesday, 30 June Tuesday, 7 July Tuesday, 7 July

6 the Companies Act Special resolutions expected to be registered by CIPC Finalisation date expected to be Finalisation date announcement expected to be released on SENS Finalisation date announcement expected to be published in the press Expected last day to trade in existing A linked units on the JSE prior to the delinking of the A linked units and the capitalisation of the A debentures Expected last day to trade in existing B linked units on the JSE prior to the delinking of the B linked units and the capitalisation of the B debentures Trading in delinked A ordinary shares of no par value under the new ISIN: ZAE and the existing code of AIA commences Trading in delinked B ordinary shares of no par value under the new ISIN: ZAE and the existing code of AIB commences Expected suspension of listing of A linked units on the JSE Expected suspension of listing of B linked units on the JSE Expected scheme implementation record date for the delinking of the A linked units and the capitalisation of the A debentures at the close of business Expected scheme implementation record date for the delinking of the B linked units and the capitalisation of the B debentures at the close of business Expected scheme operative date Expected date by which dematerialised A ordinary shareholders will have their accounts updated at their CSDP or broker Expected date by which dematerialised B ordinary shareholders will have their accounts updated at their CSDP or broker Expected date of issue of new replacement share certificates provided that the old A linked unit certificates have been surrendered by 12:00 on Friday, 24 July 2015 (any certificated A linked units surrendered after this date will be replaced within five business days after receipt by the transfer secretaries) Expected date of issue of new replacement share certificates provided that the old B linked unit certificates have been surrendered by 12:00 on Friday, 24 July 2015 (any certificated B linked units surrendered after this date will be replaced within five business days after receipt by the transfer secretaries) Expected termination of listing of A linked units (at the commencement of trade) Expected termination of listing of B linked units (at the commencement of trade) 2015 Wednesday, 8 July Friday, 10 July Friday, 10 July Monday, 13 July Friday, 17 July Friday, 17 July Friday, 24 July Friday, 24 July Monday, 27July Notes: 1. All dates and times may be changed by the company. Any change will be published on SENS and in the South African press. 2. Linked unitholders should note that as transactions in Ascension linked units are settled in the electronic settlement system used by Strate, settlement of trades takes place five business days after such trade. Therefore, unitholders who acquire Ascension linked units after Friday, 5 June 2015 will not be eligible to vote at the linked unitholders general meetings, the debenture holders scheme meetings or the shareholders general meetings. 3. All times given in this announcement are local times in South Africa. 4. If the combined linked unitholders general meeting, A linked unitholders general meeting, B linked unitholders general meeting, A debenture holders scheme meeting, B debenture holders scheme meeting, combined ordinary shareholders general meeting, A ordinary shareholders general meeting and/or B ordinary shareholders general meeting are adjourned or postponed, forms of proxy submitted for the initial combined linked unitholders general meeting, A linked unitholders general meeting, B linked unitholders general meeting, A debenture holders scheme meeting, B debenture holders scheme meeting, combined ordinary shareholders general meeting, A ordinary shareholders general meeting and/or B ordinary shareholders general meeting, as the case may be, will remain valid in respect of any adjournment or postponement of the combined linked unitholders general meeting, A linked unitholders general meeting, B linked unitholders general meeting, A debenture holders scheme meeting, B debenture holders scheme meeting, combined ordinary shareholders general meeting, A ordinary shareholders general meeting and/or B ordinary shareholders general meeting, as the case may be. 5. No dematerialisation of linked unit certificates may take place after Friday, 17 July 2015.

7 22 May 2015 Corporate advisor and sponsor Independent expert Legal advisor