GRIT TO IMPROVE LIQUIDITY, SAVE COSTS THROUGH
PROPOSED JSE DE-LISTING
• JSE de-listing to improve liquidity, save costs and allow access to cheaper equity and debt finance
• Grit to retain primary listing on LSE and secondary listing in Mauritius (an investment grade African country)
• Shareholders on the JSE Register encouraged to retain their investment in Grit by transferring existing shares to the SEM or LSE share registers before the delisting
• Botswana Development Corporation and Zep-Re (the PTA Reinsurance Company) offer to acquire shares on the JSE register at R14.90 per share
• Paves the way for step-up to Premium Listing in London and eligibility for FTSE Index inclusion which could further improve liquidity
11 JUNE 2020. JOHANNESBURG. London Stock Exchange listed Grit, a leading pan-African income real estate company, focused on investing in and actively managing a diversified portfolio of assets underpinned by predominantly US$ and Euro denominated long-term leases with high quality multi-national tenants, today announced its intention to de-list from the JSE.
CEO and co-founder Bronwyn Corbett commented:
“Grit is currently listed in London, South Africa and Mauritius. Poor trading liquidity in our shares, and the complexity of being listed on three exchanges have become increasingly onerous to the point where it no longer warrants the considerable cost and administrative burden on the Company.
“The LSE is currently home to 110 African listed companies with a combined market capitalisation of c.US$173 billion and offers access to a higher quantum of institutional investors. The capital markets in London provide a deeper and longer-term viable opportunity to raise both equity and debt instruments. We will however retain a secondary listing in Mauritius, an investment grade country.”
Shareholders on the JSE register have the option to move their existing holdings to either the LSE or to the main market of the Stock Exchange of Mauritius (“the SEM”) or can alternatively elect to dispose of their holdings.
“Our board recommends the offer and subsequent delisting to shareholders on the JSE register. Apart from the obvious cost saving, consolidating the three registers into two is anticipated to have a positive impact on liquidity as well.
“Despite world-wide challenges as a result of COVID-19, we are confident of our strategy to unlock superior total returns for investors in the medium to longer term. Although the offer price represents fair value considering current market conditions, as a board and management team we encourage shareholders on the JSE register to move their holdings to the LSE or SEM registers,” Corbett added.
Botswana Development Corporation, a strategic long-term shareholder in Grit and ZEP-Re (a regional African reinsurance company established by an agreement of the heads of state and governments of the Common Market for Eastern and Southern Africa [COMESA]) has made a conditional offer to acquire up to 7 000 000 shares becoming available as a result of the offer at an offer price of R14.90 per share. Mazars Corporate Finance conducted the independent fairness report on the offer and determined the offer price as fair considering current market conditions and that it fairly reflects near term pricing dynamics. Management does however believe that the market will be able to better price the Company’s NAV as Africa and the markets recover in the medium-term post COVID-19.
“The de-listing from the JSE paves the way for a step-up to a Premium Listing in London, which is internationally regarded as the gold standard for corporate governance and controls. A Premium Listing will provide eligibility for inclusion in the main FTSE Index series, which could further improve liquidity,” concluded Corbett.
In terms of the JSE Listings Requirements, more than 50% of shareholders on the JSE register must approve the offer. A general meeting of shareholders has been scheduled for Friday, 10 July 2020 and, if the offer is approved, Grit will delist from the JSE on commencement of business on Wednesday, 29 July 2020.
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