South African Prop. - New Investment Management Arrangements London Stock Exchange
RNS Number : 2414L
South African Property Opps PLC
02 July 2014


2 July 2014


South African Property Opportunities Plc


New Investment Management Arrangements


The Board of South African Property Opportunities Plc ("SAPRO" or "Company") is pleased to announce that it has appointed Bridgehead Real Estate (Pty) Limited ("Bridgehead") as investment manager and has terminated its contract with Group Five Property Development (Pty) Limited ("Group Five") with effect from 1 July 2014.


The key terms of the new investment management agreement appointing Bridgehead are:


·     a fixed fee of £175,000 per annum;


·     an incentive fee of 1.5% of the net proceeds received by the Company following the sale of an asset; and


·     terminable on six months' notice which may be served so as to expire on or at any time after the first anniversary of commencement.


Under the previous investment management agreement, a fixed fee of £290,000 per annum and an incentive fee of 1.5% of net proceeds was payable to Group Five. The termination provisions in the previous investment management agreement were the same as those in the new investment management agreement.


In addition Craig McMurray has agreed to reduce his director's fee from £40,000 to £20,000 per annum, which together with the reduction in management fee, has resulted in the Company making an overall fixed fee cost saving of £135,000 per annum.


The Company has also entered into a termination deed on 1 July 2014 with Group Five under which the Company has agreed to pay Group Five (in lieu of notice) a termination fee of ZAR 1.4 million (£77,000) and, until 1 January 2016, a fee of 0.5% of the net proceeds received by the Company following the sale of an asset.


As part of the new arrangements, and to help to ensure continuity, Bridgehead has recruited Simon Thirsk, the Group Five executive most closely involved with the Company's affairs. He will receive a material part of any sales commission.


Bridgehead is a company managed by Craig McMurray, an Executive Director of the Company. The entry by the Company into the new investment management agreement is therefore a related party transaction.


The Company's independent directors, David Hunter, Stephen Coe, John Chapman and David Saville, having consulted with the Company's Nominated Adviser in accordance with the AIM Rules, consider the terms of the investment management agreement are fair and reasonable in so far as its shareholders are concerned.


David Hunter, SAPRO's Chairman commented:


"We have negotiated a contract that has a cost saving in terms of fixed fees and, by Simon Thirsk joining Bridgehead, have maintained continuity of personnel and of the disposal programme." 


Company information:




Paul Fincham                                     +44 (0) 20 7886 2713


Robert Naylor                                   +44 (0) 20 7886 2714


Panmure Gordon

Nominated Adviser and Broker



Ian Dungate/David Parnell          + 44 (0) 1624 692600


Galileo Fund Services Limited



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