REG-Grit Real Estate Income Group Grit Real Estate Income Group: PARTIAL SALE OF INTEREST IN LETLOLE LA RONA LIMITED, BOTSWANA

Grit Real Estate IncomeAnnouncement

08/03/2023 07:30

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   Grit Real Estate Income Group (GR1T)
   Grit Real Estate Income Group: PARTIAL SALE OF INTEREST IN LETLOLE LA RONA
   LIMITED, BOTSWANA

   08-March-2023 / 07:20 GMT/BST

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   GRIT REAL ESTATE INCOME GROUP LIMITED

   (Registered in Guernsey)

   (Registration number: 68739)

   LSE share code: GR1T
                                                                             
   SEM share code: DEL.N0000

   ISIN: GG00BMDHST63

   LEI: 21380084LCGHJRS8CN05

   (“Grit” or the “Company” and, together with its subsidiaries, the
   "Group")

    

    

         PARTIAL SALE OF INTEREST IN LETLOLE LA RONA LIMITED, BOTSWANA

                                        

    

   The board of  Directors (the  “Board”) of  Grit Real  Estate Income  Group
   Limited, a  leading  and  award-winning  pan-African  impact  real  estate
   company focused  on  investing  in, developing  and  actively  managing  a
   diversified portfolio of assets underpinned by predominantly US$ and  Euro
   denominated long-term  leases  with high  quality  multi-national  tenants
   announces the disposal  of a  further 2.29%  interest in  Letlole la  Rona
   (“LLR”), an associate owning  predominantly industrial assets in  Botswana
   (the “Disposal”), resulting in Grit’s interest in LLR reducing to 11.25%.

    

   Grit yesterday executed a sale of  6,421,000 shares on the Botswana  Stock
   Exchange (the "BSE") at a price of 3.51 Bostswanan Pula (“BWP”) per  share
   in cash, representing a 12.7% premium to the last published LLR NAV as  at
   31 December  2022. Sale  proceeds  amount to  BWP  22.5 million  (US$  1.7
   million).

    

   The Disposal is in addition to:

    

   i. a sale executed  in December 2022  when the Group  disposed of a  6.79%
      equity interest (19,000,000 shares)  at BWP 3.48 per  share in cash,  a
      15% premium to last reported NAV  at that date. Sale proceeds  amounted
      to BWP 66.1 million (US$ 5.2 million); and

    

   ii. a sale executed  in February  2023 when  the Group  disposed of  4.77%
       equity interest  (13,347,068 shares)  at BWP3.51  per share  in  cash,
       amounting to a sale  proceeds of BWP 46.8  million (US$ 3.5  million),
       representing a 12.7% premium  to the last published  LLR NAV as at  31
       December 2022.

   The Disposal, when  aggregated with  the above trades,  results in  Grit’s
   interest in LLR reducing from 25.1% as at 30 June 2022 to 11.25% today.

    

   Bronwyn Knight, CEO of Grit Real Estate Income Group Limited, commented:

   “The disposal by Grit of a 13.85%  interest in Letlole La Rona is in  line
   with, and materially contributes towards, the Company's stated  strategies
   of asset recycling 20% of the value  of its portfolio by 31 December  2023
   and the ongoing reduction  in Grit LTV. Since  the original investment  in
   2019,  and  supported  by  Grit’s   direct  real  estate  and   governance
   involvement  alongside   fellow  large   investors,  LLR   has   delivered
   substantial value to all shareholders. While Grit remains highly committed
   to investment in Botswana  and the broader  region, this recycled  capital
   will now be  redeployed in  support of Grit’s  ongoing transition  towards
   Africa impact  focussed assets,  which are  expected to  deliver near  and
   longer term value creation and growth opportunites in net asset value  and
   income, for the benefit of all  our stakeholders, including the people  of
   Africa."

    

   Further detail on the LLR  investment, Grit’s investment strategy and  the
   impact to Grit on the sale

   Grit invested  in LLR  in 2019  when the  BSE listed  variable loan  stock
   company owned 20 properties worth BWP 774 million (c. US$ 73 million), and
   a Net  asset value  of BWP  744  million As(c.  US$ 70.8  million).   Grit
   partnerned with  the Botswana  Development  Corporation (“BDC”)  on  their
   ambition to build improved Board  composition controls and for sharing  of
   intellectual property to strengthen LLR’s real estate operating  processes
   and procedures. LLR is now one of  the best performing stocks on the  BSE,
   trading at 12.7%  premium to NAV  as well as  having exposure to  exciting
   expansion opportunities embedded in a  “Go to Africa” strategy, with  Grit
   alongside as a trusted partner.

   As of 31 December 2022, LLR holds direct investments in 24 properties  and
   has a property portfolio valued at BWP 1.2 billion with a Net asset  value
   of  BWP  872  million  (c.  US$  68.3  million),  which  has   represented
   significant growth since 2019.

    

   In 2023, as part  of Grit’s renewed focus  on controlling its real  estate
   assets, prioristisng exposure to US Dollar revenues and pursuing a revised
   growth strategy articulated under  the Grit 2.0, the  Board has chosen  to
   redeploy its  equity  currently invested  in  LLR into  further  resilient
   African impact development assets.

    

   The gross property  assets which are  the subject of  the transaction  are
   US$11.6 million, being  13.85% of the  LLR’s properties valued  at a  book
   value of US$ 83.5 million on 31 December 2022. The profit attributable  to
   the 13.85% interest  in the financial  year to  30 June 2022  was US$  1.3
   million, which included a  fair value movement  on investment property  of
   US$0.3 million  in that  year.  Funds received  from the  transaction  are
   expected to  be  applied towards  Grit  debt reduction,  replenishment  of
   liquidity reserves over the short term, and redeployment into acquisitions
   and future Group projects over the medium term.

    

   The Group continues to target 20% asset recycling, equating to a value  of
   up to US$160.0  million. This transaction  is therefore expected  to be  a
   meaningful  contributor  to  the  Group’s  asset  recycling  target  being
   attained by 31 December 2023.

    

   By Order of the Board

    

   8 March 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 US$  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 secondary listing on the Stock Exchange of
   Mauritius (SEM: DEL.N0000).

   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+  and
   Cross Kgosidiile.

   (* 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: DIS
   TIDM:          GR1T
   LEI Code:      21380084LCGHJRS8CN05
   Sequence No.:  228168
   EQS News ID:   1577117


    
   End of Announcement EQS News Service

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