REG-Grit Real Estate Income Group SARB APPROVAL ON GREA US$100 MILLION RECAPITALISATION

Grit Real Estate IncomeAnnouncement

01/11/2024 11:00

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   Grit Real Estate Income Group (GR1T)
   SARB APPROVAL ON GREA US$100 MILLION RECAPITALISATION

   01-Nov-2024 / 11:00 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" or the "Group")

    

    

    VOLUNTARY UPDATE: SARB APPROVAL ON GREA US$100 MILLION RECAPITALISATION

    

    

    1. INTRODUCTION

   On 28 June 2024, Grit’s development subsidiary, Gateway Real Estate Africa
   (“GREA”) issued a call notice to its shareholders, including Grit and  the
   Public Investment Corporation of South Africa SOC Limited (“PIC”), as part
   of a US$100 million capital raise.

   In terms  of  the  call  notice, the  Government  Employees  Pension  Fund
   (“GEPF”) represented  by the  PIC, the  largest sovereign  wealth fund  in
   Africa, is  contracted to  inject  US$48.5 million  cash equity  (the  PIC
   Capital Investment).

   The payment was due within seven days  of the call notice but was  delayed
   due to an additional requirement by  the South African Reserve Bank  (“the
   SARB”) before cash can be transferred from South Africa.

   The board of directors of Grit (“the Board”) consider that all substantive
   conditions relating  to the  capital raise  have been  fulfilled and  were
   confirmed  in  writing  by  the  PIC,  except  for  the  approval  of  the
   transaction by the SARB.

   The conditions that were fulfilled include:

     • Under the  terms of  the  GREA shareholder  agreement  the PIC  has  a
       contractual obligation  to participate  once a  call notice  issue  is
       issued and the PIC (as the investment manager acting on behalf of  the
       GEPF) confirmed in writing  that they will  participate in the  rights
       issue, which was confirmed in September 2023.
     • The capital raise has  been approved by the  Board of GREA in  October
       2023.
     • The South African Government  Employee Pension Fund (“GEPF”)  provided
       shareholder approval on the 29th of April 2024.

   2. SOUTH AFRICAN RESERVE BANK DIRECTIVE

   South Africa  was  greylisted  by  the  global  financial  crime  watchdog
   Financial Action Task Force  (“FATF”) in February  2023 for not  complying
   with international standards  around the prevention  of money  laundering,
   terrorist financing and proliferation financing.

   As a result, the country’s National Treasury, through the SARB implemented
   a universal directive prohibiting  state-owned entities from investing  in
   low-tax jurisdictions  or  using  these jurisdictions  as  a  conduit  for
   offshore investments (“the Blanket Directive”).

   3. APPROVAL OF PIC CAPITAL INVESTMENT BY THE SARB

   On 30 October 2024, the SARB issued a letter confirming that the  Minister
   of Finance had approved the request by the PIC, on behalf of the GEPF,  to
   participate in the equity  investment subject to  the condition that  GREA
   will redomicile to Kenya (“the GREA redomiciliation”).

   This condition is retrospective, providing for the investment to flow upon
   GREA’s updated draw request  which has been submitted,  and that the  GREA
   redomiciliation is completed within 12 months from the Finance  Minister’s
   approval. The GREA redomiciliation is  currently underway and is  expected
   to be finalised early in the 2025 calendar year.

   4. CURING OF MATERIAL UNCERTAINTY

   Shareholders are referred to Grit’s annual financial statements  published
   on RNS and the website of the Stock Exchange of Mauritius Ltd on Thursday,
   31 October 2024 (the "Financial  Results") . The statements highlighted  a
   delay in the regulatory approval of the PIC Capital Investment, which,  as
   of  the  date  of  the  Financial  Results,  raised  material  uncertainty
   regarding the Group and Company's ability to continue as a going concern.

   The Board is pleased to inform shareholders that, following approval  from
   the SARB,  the  PIC Capital  Investment  is now  contractually  under  the
   control of  the  Directors,  curing  the  previously  identified  material
   uncertainty around the Group’s going concern assessment.

    

   Bronwyn Knight, Chief Executive Officer of Grit commented:

   “As founding shareholder of GREA, the PIC (on behalf of the GEPF)  remains
   fully committed to GREA and its recapitalisation commitments.

   “The  SARB  approval  of  the  PIC  Capital  Investment  now  places   the
   transaction contractually under the control of the Directors, and that the
   updated draw request has been submitted.”

   Greg Pearson, Chief Executive Officer of GREA said:

   “This capital investment underscores PIC and GEPF’s commitment to  partner
   with GREA  as a  real estate  growth platform  for Africa,  which will  be
   further solidified by the impending  appointment of a GEPF  representative
   to GREA’s board of directors.”

    

   By Order of the Board

    

   01 November 2024

    

   FOR FURTHER INFORMATION, PLEASE CONTACT:

   Grit Real Estate Income Group Limited                   
   Bronwyn Knight, Chief Executive Officer                +230 269 7090
   Morne Reinders, Investor Relations                     +27 (0) 82 480 4541

   Group Investor Relations                               ir@grit.group
                                                           
   Cavendish Capital Markets Limited - UK Financial        
   Adviser
   James King /Edward Whiley (Corporate Finance)          +44 20 7220 5000
   Justin Zawoda-Martin / Daniel Balabanoff/Pauline       +44 20 3772 4697
   Tribe (Sales)
                                                           
   Perigeum Capital Ltd - SEM Authorised Representative    
   and Sponsor
   Shamin A. Sookia                                       +230 402 0894

   Darren M. Chinasamy                                    +230 402 0885
                                                           
                                                           
   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 dual  currency trading secondary listing on  the
   Stock Exchange of Mauritius (SEM: DEL.N0000 (USD) / DEL.C0000 (MUR)).

    

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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: MSCM
   TIDM:          GR1T
   LEI Code:      21380084LCGHJRS8CN05
   Sequence No.:  356698
   EQS News ID:   2021107


    
   End of Announcement EQS News Service

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