Grit Real Estate Income Group (GR1T)
Acquisition of controlling interest of Gateway Real Estate African Limited ('GREA') and African Property Development
Managers Limited ('APDM')
26-Jul-2023 / 07:00 GMT/BST
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GRIT REAL ESTATE INCOME GROUP LIMITED
(Registered in Guernsey)
(Registration number: 68739)
LSE share code: GR1T
SEM share codes (dual currency trading):
DEL.N0000 (USD) / DEL.C0000 (MUR)
ISIN: GG00BMDHST63
LEI: 21380084LCGHJRS8CN05
("Grit" or the "Company" and, together with its subsidiaries, the "Group")
ACQUISITION OF CONTROLLING INTERESTS IN GATEWAY REAL ESTATE
AFRICA LIMITED ("GREA") AND AFRICAN PROPERTY DEVELOPMENT MANAGERS
LIMITED ("APDM")
The board of Directors (the "Board") of Grit Real Estate Income
Group Limited are pleased to announce the conclusion of the final
phase in the acquisition of controlling interests in GREA and APDM
from Gateway Africa Real Estate Limited ("Gateway Partners") and
Prudential Impact Investments Private Equity LLC ("Prudential").
Grit now owns a direct interest of 51.48% in GREA and a 78.95%
shareholding in APDM. The respective remaining balances are held by
the Public Investment Corporation of South Africa (PIC).
GREA successfully completed several developments during the
three-phase acquisition timeframe which has materially derisked the
transaction for Grit shareholders. Notable project deliveries
include:
-- Adumah Place, Ghana (winner of "API Best Commercial Office
development 2022"),
-- ADC data centre, Nigeria,
-- Rosslyn Grove US embassy accommodation, Kenya (winner of the
"API best high end development award in2022"),
-- The Precinct Office park, Mauritius (the first 5 star green
rated office park in the Indian Oceanregion),
-- Curepipe Artemis Hospital, Mauritius.
The financial results of GREA and APDM are to be consolidated
with Grit's and are expected to have a positive impact on both the
value of reported investment properties, Group LTV and future
growth rates and income distributions to the Group.
Bronwyn Knight, CEO of Grit Real Estate Income Group Limited,
commented:
"Concluding the acquisition of controlling interests in GREA and
APDM are significant milestones towards our Grit 2.0 vision of
setting global benchmarks in Africa. The acquisitions support
Grit's ongoing transition towards a more resilient, accretive and
African impact focussed asset base. These are expected to deliver
value creation and growth opportunites in net asset value and
income to the benefit of all our stakeholders, including the people
of Africa.
Grit additionally gains access to GREA's substantial pipeline of
accretive development opportunities while the controlling interest
in APDM provides Grit with an opportunity to earn substantial
development and asset management fees from internal, joint venture
partners and third-party clients."
Further detail on Phase 3 of the acquisition of controlling
interests in GREA and APDM:
Phase 3 of the acquisition, whereby Grit acquired Gateway
Partners' remaining 13.61% interest in GREA and 1% interest in APDM
for a combined cash payment of USD33.9 million, became
unconditional and share transfer was lodged, following receipt of
the Mauritius Prime Minister's Office consent which was the final
condition precedent.
Additionally, Grit has acquired a 2.85% interest in GREA from
Prudential for USD5.5 million.
Immediately after these acquisitions, and prior to the vesting
of the APDM incentive, Grit owns 51.48% of GREA and a 78.95%
shareholding in APDM.
Across the three phases, Grit has paid an aggregate of USD77.6
million for the total increased 31.50% shareholding in GREA,
settled through a combination of cash and share issuance (covered
under the prospectus and circular issued in Q4 2021).
Details of Phase 3 of the transaction 1. Acquisition of the
additional 16.47% interest in GREA:
??The Gross Assets the subject of the transaction are USD174.1
million.
??The profits attributable to the transaction are USD2.9
million. 2. Acquisition of additional 1% interest in ADPM:
??Gross Assets the subject of the transaction are USUSD0.01
million. 3. Impact on Grit
Grit now has the ability to direct additional activities in GREA
that are expected to create value, including:
-- Balance sheet optimisation and disposal of non-core assets
specifically reducing exposures to the retailsegment. Such asset
recycling would be expected to free up for redeployment into new
project opportunities withinGREA.
-- When combined with Grit's balance sheet, GREA's current low
leverage would be expected to result in areduction of consolidated
Grit Group LTV by approximately 2.90 percentage points.
-- Whilst GREA is expected to remain relatively lowly geared,
its construction debt facilities areamortising and are relatively
expensive compared to Grit's debt facilities. There is potential to
utilise Grit'scredit standing to provide GREA with cheaper debt
funding and, crucially, the ability to recycle operationalcashflow
into new projects rather than debt repayments, thereby securing
enhanced levels of growth. 4. GREA key individuals
-- Gregory Pearson, Chief Executive Officer
-- Krishnen Kistnen, Chief Financial Officer
-- Andre Janari, Chief Investment Officer
-- Craig Glutz, Head of Developments
-- Shevira Bissessor, Chief Operating Officer
The management team and staff have become employees of the Group
and are now participants of the Grit long-term incentive plan.
By Order of the Board
26 July 2023
FOR FURTHER INFORMATION, PLEASE CONTACT:
Grit Real Estate Income Group Limited
Bronwyn Knight, Chief Executive Officer +230 269 7090
Darren Veenhuis, Investor Relations +44 779 512 3402
finnCap Ltd - UK Financial Adviser
William Marle/Teddy Whiley (Corporate Finance) +44 20 7220 5000
Mark Whitfeld/Pauline Tribe (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
Capital Markets Brokers Ltd - Mauritian Sponsoring Broker
Elodie Lan Hun Kuen +230 402 0280
NOTES:
Grit Real Estate Income Group Limited is the leading pan-African
impact real estate company focused on investing in, developing and
actively managing a diversified portfolio of assets in carefully
selected African countries (excluding South Africa). These
high-quality assets are underpinned by predominantly USUSD 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 holds its primary listing on the Main Market of the
London Stock Exchange (LSE: GR1T and a dual currency trading
secondary listing on the Stock Exchange of Mauritius (SEM:
DEL.N0000 (USD) / DEL.C0000 (MUR))
Further information on the Company is available at
www.grit.group
Directors: Peter Todd (Chairman), Bronwyn Knight (Chief
Executive Officer)*, Leon van de Moortele (Chief Financial
Officer)*, David Love+, Sir Samuel Esson Jonah+, Catherine
McIlraith+, Jonathan Crichton+, Cross Kgosidiile and Lynette
Finlay+.
(* Executive Director) (+ independent Non-Executive
Director)
Company secretary: Intercontinental Fund Services Limited
Registered office address: PO Box 186, Royal Chambers, St
Julian's Avenue, St Peter Port, Guernsey GY1 4HP
Registrar and transfer agent (Mauritius): Intercontinental
Secretarial Services Limited
SEM authorised representative and sponsor: Perigeum Capital
Ltd
UK Transfer secretary: Link Assets Services Limited
Mauritian Sponsoring Broker: Capital Markets Brokers Ltd
This notice is issued pursuant to the FCA Listing Rules, SEM
Listing Rule 15.24 and the Mauritian Securities Act 2005. The Board
of the Company accepts full responsibility for the accuracy of the
information contained in this communiqué.
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
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ISIN: GG00BMDHST63
Category Code: ACQ
TIDM: GR1T
LEI Code: 21380084LCGHJRS8CN05
Sequence No.: 260103
EQS News ID: 1688071
End of Announcement EQS News Service
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