Corporate

acuadmin | Tuesday April 21, 2020 15:45

RDC - This circular is important and requires your immediate attention

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rdc

Downloads; #1. FORM_OF_ELECTION+2019 #2. Letter_To_Unit_Holders If you are in doubt as to what action to take, please consult your stockbroker, banker, attorney, accountant or other professional advisor. Action required

  1. If you wish to receive the cash distribution, do not complete the form of election and you will automatically receive the cash distribution.
  2. -If you wish to receive the capitalisation units in respect of all or part of your unitholdings, complete the accompanying form of election in accordance with the instruction herein. The completed form of election should be lodged with the company’s transfer secretaries, PricewaterhouseCoopers (Pty) Ltd, not later than 23 April 2020 at 5.00pm.Forms of election received after that date will not be accepted. Arrangements have been made with the transfer secretaries to accept forms of election by e-mail only.
  3. -If you have disposed of linked units in RDC Properties Limited on or before 08 April 2020 but those units are included on the enclosed form of election, you should contact immediately the agent through whom you have disposed of such units for advice on how to deal with the form of election and the document enclosed, OR
  4. -If you have acquired additional linked units in RDC Properties Limited on or before 08 April 2020 but those units are not included on the enclosed form of election, you should contact the agent through whom you have acquired such units for advice on how to deal with the form of election and the document enclosed.
RDC PROPERTIES LIMITED P.O.BOX 405391, GABORONE, BOTSWANA TEL: (+267) 3901654       FAX: (+267) 3973441       E-MAIL: rdc@rdc.bw   CIRCULAR TO UNITHOLDERS Regarding The award of capitalisation units to unitholders registered in the books of the Company at the close of business on 08 April 2020 (“the record date”) at a price of P2.03 per linked unit for every 1 unit held (“Capitalisation option”) equivalent up to 100% of the net distribution and the offer to elect to receive the interim distribution of 5.771 thebe per unit in lieu of the capitalisation shares (“Cash Distribution”). UNITHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 08 APRIL 2020 WILL RECEIVE THE CASH DISTRIBUTION UNLESS THEY ELECT THE CAPITALISATION OPTION Transfer Secretaries PricewaterhouseCoopers (Pty) Ltd. Date of issue: 06 April 2020
  1. INTRODUCTION
In terms of the powers granted to the Directors by the Constitution of the Company, the Board of Directors have now approved the issue of up to 8,821,061 new linked units to be funded by the capitalisation of 100% of the imminent cash distribution of dividend and debenture interest to unitholders. The capitalisation option is subject to the Botswana Stock Exchange approving in principle the issue and listing of the new linked units.
  1. BASIS OF THE AWARD OF CAPITALISATION UNITS
 Unitholders registered in the books of the Company on 08 April 2020 (“the record date”) will receive as many fully paid units in the company as will arise from 100% of the net distribution amount provided that the minimum issue will be 1 unit at a price of P2.03 per unit (“capitalisation units”) and provided that such unitholders may decline the cash distribution and instead elect the capitalisation option in terms of 3 below.
  1. CAPITALISATION OPTION
 Unitholders registered in the books of the company at record date are offered the option to elect to receive capitalisation units arising out of 100% of the distribution comprising of net interim cash dividend of 0.489 thebe per unit and 100% of the net interim cash debenture interest of 5.282 thebe in respect of all or in part of their unitholdings (“the capitalisation option”).
  1. ISSUE OF LINKED UNITS
The capitalisation units issued in terms of this offer will be fully-paid out of the distribution account. Assuming that all the company unitholders who are in possession of the minimum number of linked units required for the 1 unit capitalisation issue, do elect the capitalisation option, the maximum amount to be capitalised is expected to be P17,906,674.96.  The new linked units when issued will rank pari passu in all respects with the existing RDC Properties Limited linked units in issue. The stated capital of the company, prior to the capitalisation option, is P324,856,103, being 350,982,285 issued ordinary shares at no par value.
  1. REASON FOR THE CAPITALISATION ISSUE
The Company has just presented a solid set of results and projects going forward, confirming the estimates that underpinned the distribution to unit holders announced on 05 December 2019. In view of the coronavirus (COVID-19) pandemic that is disrupting global markets and shaking the fundamentals of the world’s economic models the Company believes that until the situation is more certain, it is prudent and socially correct to review its position with regards to the distribution to unit holders. Having modeled several scenarios, considering a disruption for the next six months, the management is confident that the Company will remain in a strong surplus capital position since its rental income is well diversified in terms of economic sectors and geography, and has a very low overall level of borrowing, net of cash (20% loan to value). Since the length of the disruption is unknown, and this creates uncertainty, it is believed that a strong focus on cash retention and constant evaluation of the risks associated to unknown circumstances is essential. It is therefore proposed that as a measure of prudence, unit holders should be given the opportunity to assist the Company in retaining its cash reserves by supporting this elective capitalisation. The Company is building on the measures being implemented by the Botswana Government and continues to uphold its ethical and community-focused values as well as being able to service its financial obligations. It is in these trying times that the Company’s commitment to “owning and managing strategic property assets that add value to the communities we serve” is put to the test. The Company will continue assuming its leadership role in supporting the Nation and its customers. The Company’s properties that are more exposed to the impact of this pandemic are the ones in the hospitality sector. The Company will try to take this opportunity to implement the property improvement plans which had been delayed or postponed because of occupancies, hopefully taking advantage of any rebound in the market. The Company is complying with its banking facilities and the directors do not expect this position to alter in the forthcoming twelve months. The directors have considered the Company’s forecast cash flows, the low gearing, the significant portfolio of unencumbered properties and the maturity profile of borrowings and can confirm that the Company has adequate resources to continue for the foreseeable future. This represents an opportunity for unit holders to increase their shareholding in the Company without incurring any of the costs normally associated with this and the Company will be able to utilise the amount of the unitholder’s funds retained in the Company to continue to strengthen the financial position of the Company and take advantage of any opportunities available after the crisis.
  1. CAPITALISATION UNITS ENTITLEMENT
The number of capitalisation units to which the unitholders will be entitled will be calculated on the following basis: 1 Capitalisation units entitlement = up to 100% of the net distribution amount (after tax) / P2.03
  1. FRACTIONAL ENTITLEMENTS
Where the entitlements to capitalisation units result in a fraction of a unit, the units awarded will be rounded to the nearest whole number.
  1. EXAMPLE
  1. A) Assume a foreign unitholder holds 15 600 linked units at the record date and does elect the capitalisation option. The number of the new linked units to which this unitholder would be entitled is calculated as follows:
1 Capitalisation units entitlement = ((15 600 x 0.05282 x 0.85) + (15 600 x 0.925 x 0.00489)) x 1.00/2.03 =379.781 This will be rounded to 379 units.
  1. Assume a Botswana resident unitholder holds 15 600 units at the record date and does elect the capitalisation option. The number of the new units to which this unitholder would be entitled is calculated as follows:
1 Capitalisation units entitlement = (15 600 x 1.00 (0.00489 x 0.925+0.05282))/2.03= 440.667 This will be rounded up to 441 units  UNITHOLDERS WHO WISH TO RECEIVE THE CASH DISTRIBUTION NEED TAKE NO FURTHER ACTION
  1. PROCEDURE FOR UNITHOLDERS WHO ELECT THE CASH OPTION
Botswana resident unitholders who held less than 35 linked units and foreign unitholders who held less than 41 linked units are not eligible to any capitalisation units will not receive the form of election and they will receive the full distribution in cash. Unitholders who held more than the above minimum and elect the capitalisation option must complete the form of election accompanying this circular in accordance with the instructions therein and lodge it with the transfer secretaries, PricewaterhouseCoopers (Pty) Limited at: E-MAIL: dolly.mmereki@pwc.com
  1. OPENING OF THE OFFER AND THE LAST DAY TO MAKE THE ELECTION
The offer to elect the cash option opens at the commencement of business on Wednesday, 08 April 2020 and closes at close of business on Thursday, 23 April 2020. Should completed forms of election not be received at the applicable e-mail address as indicated in 9 above by close of business on Thursday, 23 April 2020, this will be construed by RDC Properties Limited as indicating that the relevant unitholders do not wish to make the election and, accordingly, such unitholders will automatically receive the cash distribution. FORM OF ELECTION RECEIVED AFTER CLOSE OF BUSINESS ON THURSDAY, 23 APRIL 2020 WILL NOT BE ACCEPTED  NOMINEE COMPANIES Arrangements have been made with the transfer secretaries, PricewaterhouseCoopers (Pty) Ltd, to treat the application from a nominee company’s members as individual applications on the submission of a breakdown, identified by number, of the said nominee company’s members.
  1. CREDIT OF NEW LINKED UNITS IN CSDB ACCOUNTS AND DISTRIBUTION CHEQUES
Capitalisation linked units shall be credited to the respective CSDB accounts of the unitholders. For those unitholders who have not yet dematerialised their unitholdings and decide to accept the capitalisation offer, their capitalisation linked units shall be credited to the omnibus account in CSDB pending dematerialisation of their unitholdings. The distribution cheques will be posted to unitholders at their risk to their registered or mandated addresses on or about 29 April 2020.
  1. LISTING OF THE CAPITALISATION UNITS
The Botswana Stock Exchange has granted a listing of the capitalisation units arising from the capitalisation issue with effect from the commencement of business on Wednesday, 29 April 2020.
  1. RESULTS OF THE CAPITALISATION OPTION
The results of the capitalisation option will be published in the press on Monday 27 April 2020.
  1. TAXATION
In terms of the Republic of Botswana Income Tax Act, as amended, withholding tax at a rate of 7.5 percent will be deducted by the company from all dividends paid and 15 percent from interest paid to foreign registered unit holders. As per the Seventh Schedule to the Income Tax Act, withholding tax of 10 percent on interest to a resident for amounts in excess of P1,950.00 per quarter will be deducted wherever applicable.
  1. NOTICE
 The Botswana Stock Exchange has not verified the accuracy and truth of the contents of this circular, as submitted to it and the Botswana Stock Exchange accepts no liability of whatever nature for any loss, liability, damage or expenses resulting directly or indirectly from a decision taken based on the contents of this circular.
  1. SALIENT DATES
Distribution of Election forms Monday, 06 April 2020 Record date for participation for the capitalisation issue Wednesday, 08 April 2020 Election open Wednesday, 08 April 2020 Last day of Election Thursday, 23 April 2020 Announcement of results of issue Monday, 27 April 2020 Securities allotted and listed on BSE Wednesday, 29 April 2020 CSDB accounts updated and cheques posted to unitholders Wednesday, 29 April 2020 By order of the Board PricewaterhouseCoopers (Pty) Ltd PricewaterhouseCoopers (Pty) Ltd Group Company Secretaries Plot 50371 Fairgrounds Gaborone Tel: (+267) 3952011 Fax: (+267) 3973901 e-mail: dolly.mmereki@pwc.com