Growthpoint's proposed acquisition of OIF approved

Growthpoint Properties Limited today announced that all resolutions necessary for its proposed acquisition of a controlling interest in Australia's Orchard Industrial Property Fund (OIF) were approved at a OIF unitholder meeting held on Thursday, 30 July 2009.

Growthpoint, a leading JSE ALSI 40 listed company, is the largest South African listed property company with assets exceeding R29.1 billion and a market capitalisation of over R19 billion. This will be its first venture offshore and represents a total investment of some $A200 million or approximately R1,3 billion at current exchange rates when the transaction is completed.

All the conditions precedent for the transaction, other than those conditions relating to the amendment of the existing debt facilities, have now been fulfilled. Growthpoint CEO Norbert Sasse notes that the conclusion of discussions with the existing lenders are expected to be completed shortly.

On fulfillment of the remaining conditions precedent Growthpoint will subscribe for new OIF units giving Growthpoint an upfront interest of 50.1% in OIF for an amount of A$55.6million in the first stage of the transaction.

In the second part of the transaction, Growthpoint intends to underwrite the proposed OIF rights offer of A$144.4 million to recapitalize OIF, which is envisaged to close on or about Wednesday, 9 September 2009. Depending on the percentage of OIF securityholders who follow their rights, Growthpoint will own 60% to 78% of OIF.

Sasse explains that the approval of the transaction by OIF's unit holders has made possible the opportunity for Growthpoint to acquire control of a listed property company in Australia with excellent assets, underpinned by quality income streams. "It is our intention to leverage off the secure and stable OIF property portfolio to pursue further acquisition opportunities in Australia," says Sasse.

With Growthpoint's investment, OIF's name will be changed to Growthpoint Properties Australia and will start trading on the Australian Stock Exchange under the share code GOZ on or about 10 August 2009. Consistent with Growthpoint's philosophy of being internally managed, the management of Growthpoint Properties Australia will be internalized, while still benefitting from consistency of management.

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