UAC of Nigeria Plc &UACN Property Development Company PlcJoint Transaction Announcement

September 2019

This presentation contains forward-looking statements which reflect management's expectations regarding

UAC of Nigeria Plc’s (“UAC”) and UACN Property Development Company Plc’s (“UPDC”) future growth, results

of operations, performance, business prospects, operating markets and opportunities. Wherever possible, words

such as "anticipate", "believe", "expects", "intend" "estimate", "project", "target", "risks", "goals" and similar terms

and phrases have been used to identify forward-looking statements. These statements reflect management's

current beliefs and are based on information currently available to management. Certain material factors or

assumptions have been applied in drawing the conclusions contained in forward-looking statements. These

factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally.

UAC and UPDC caution readers that a number of factors could cause actual results, performance or

achievements to differ materially from the results discussed or implied in forward-looking statements. These

factors should be considered carefully and undue reliance should not be placed on forward-looking

statements. For additional information with respect to UAC’s and UPDC’s financial performance, reference

should be made to both companies’ periodic filings with the Nigerian Securities and Exchange Commission and

The Nigerian Stock Exchange. UAC and UPDC both disclaim any intention or obligation to update or revise any

forward-looking statements, whether as a result of new information, future events or otherwise.

2Disclaimer

Introduction 4

UPDC Financial Overview 6

UPDC REIT Overview 12

Strategic Initiatives 16

Repositioning UPDC 20

Conclusion 25

Contents 3

Introduction

Introduction 5

• UAC of Nigeria PLC (“UAC” or “Holdco”) is a holding company that owns businesses with some of Nigeria’s

strongest brands and widest distribution

• UAC’s businesses are largely consumer facing and positioned to benefit from Nigeria’s demographics

• Large, young and growing population

• Urbanization

• UAC holds a 64.2% shareholding in UACN Property Development Company PLC (“UPDC” or the “Company”),

a listed real estate company

• UPDC initially operated as a division of UAC and was carved out to operate as a standalone entity in 1997

• Over the years, UPDC grew to become a leader in the Nigerian real estate space; however, the Company

has struggled of late with high levels of leverage

• The Boards of Directors and Management teams at UAC and UPDC are pursuing a set of strategic initiatives

aimed at recapitalising UPDC and positioning UAC and UPDC for future growth

UPDC Financial Overview

UPDC Financial Overview

Note: (1) Liabilities at JV company level not included

Total Assets (in ₦ mn)

Total Liabilities (in ₦ mn) (1)

UPDC’s Revenue to Loss Before Tax Bridge – H1 2019 (in ₦ mn)

Commentary

• Since 2016, UPDC has generated losses on account of its heavy debt burden

• Over the years, UPDC sold assets to meet obligations; however, given the quantum of debt, external injection of capital is required to materially reduce leverage

• UPDC historically relied on commercial paper (CPs) issuance to meet its obligations, with total CPs outstanding increasing from ₦10.4bn in 2014 to ₦14.3bn by 2018

• In 2018, UPDC took mark-to-market adjustments on its portfolio and recorded losses on asset sales, which led to ₦8.9bn in non-cash

expenses

7

68,088 71,961 70,904

64,578

46,467 44,832

Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jun-19

Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jun-19

25,987 25,825 28,339 21,921 20,754 19,684

6,048 10,561

8,540

9,019 7,658 8,382

Interest bearing liabiltiies Non-interest bearing liabilities

UPDC Asset Mix (H1 2019)

Note: (1) Investment Properties and Assets Under Construction have assets worth ₦634mn and ₦ 811mn respectively with title and litigation challenges

8

• Comprises residential, commercial, retail

and land properties

• UPDC derives rental income from its

investment properties

Investment Properties (1) – 6%

UPDC REIT

46%

Assets Under

Construction

16%

Receivables

11%

Other

Assets

2%

UPDC Hotels

19%

Investment

Properties

6%

• UPDC Hotels is a subsidiary of UPDC.

• Owns the 471 room Golden Tulip Hotel in

Festac

UPDC Hotels Limited – 19%

• Other assets include property, plant &

equipment, intangibles and cash

Other Assets – 2%

• 60% represent advances to JVs which are

backed by real assets

• Other receivables primarily relate to asset

sales, rent and service charge

Receivables – 11%

• Includes residential, commercial, office and

mixed-use properties being developed for sale

Assets Under Construction (AUC) (1) – 16%

• The REIT is comprised of 7 properties, cash

and government securities

• UPDC carries its interest in the UPDC REIT

based on share of NAV

• The REIT's income comprises rental income

from the property assets and interest earned

from short term investments in money market

instruments and other real estate-related

assets

UPDC REIT – 46%1

2

3

4

5

6

As at 30 June 2019, UPDC had c.₦45bn in total assets. UPDC’s major assets are investment in UPDC REIT, UPDC Hotels Limited, Assets Under

Construction (AUC) and Investment Properties

UPDC’s loan obligations totalled c.₦21bn as at July 2019

Note: (1) Guarantee of US$2mn converted at ₦ 362.32:$1 as at 23 August 2019 (2) UAC’s shareholder loan to UPDC is at an initial rate of 5%, escalating to 15% after 180 days (3) Weighted average

9

Facility Interest Rate Tenor Dec 2018 (N mn) June 2019 (N mn) July 2019 (N mn)

Intra-group Working Capital c.15.5% n.a. 2,195 524 212

12-month Bridge Loan from UAC 5%/15% (2) 12 months - 7,652 15,843

Liquidity Support Facility NIBOR+5.00% 12 months 6,120 7,245 -

Commercial Paper 14.98% (w.ave)(3) 4 – 6 months 8,174 - -

Bonds 16.00% 3 - 5 years 4,264 4,264 4,355

SUB TOTAL 20,754 19,684 20,319

UPDC’s Guarantee of Festival Mall Loans (1) 725 725 725

TOTAL 21,479 20,410 21,044

• As at July 2019, third-party exposure is limited to the corporate bond (21% of direct obligations, down from 90% as at Dec-18)

• Aside these debt obligations, joint venture companies also have amounts outstanding to banks and trade creditors (of which only the Festival Mall debt is

partially guaranteed by UPDC)

Commentary

UAC’s Exposure to UPDC Obligations

Notes:(1) Loans from related parties (2) Maximum guarantee on commercial paper (CP) program was ₦ 11 bn(3) Bank facility from FBNQuest and Coronation Merchant Bank

• UAC’s exposure to UPDC was ₦10.8bn as at Dec 2018, with a further ₦4.5bn in potential exposure

• UAC provided a ₦15.8bn, Secured 12-month bridge loan to UPDC to redeem its short-term debt obligations and manage escalation of Group exposure

• Net proceeds from the rights issue are expected to be utilised to reduce UPDC’s interest bearing obligations to only the corporate bond

10

₦ mn, unless otherwise stated 31 Dec 2018 30 Jun 2019 31 Jul 2019

Direct loans 1,432 7,652 15,843

Group company loans (1) 774 524 212

Direct Exposure 2,205 8,176 16,035

Corporate bond guarantee 2,132 2,132 2,132

Drawn commercial paper guarantee 6,475 - -

Contingent Exposure 8,607 2,132 2,132

Total (Direct + Contingent) 10,812 10,310 18,167

Undrawn commercial paper guarantee (2) 4,525 - -

Total Potential Exposure 15,337 10,310 18,167

Liquidity Support Facility (outstanding)(3) 6,120 7,245 -

Mark to Market effect of UPDC REIT at current listed values

Notes: (1) As at 5 September 2019

11

Non-cash mark-to-

market adjustment(1)

of the carrying value

of UPDC REIT

UPDC H1 2019 NAV Bridge – Total Assets to Adj. NAV (in N mn)

UPDC REIT Overview

UPDC REIT Financial Overview

Source: S&P Capital IQ, Company Financial StatementsNotes: (1) Includes gain on fair value adjustments

Total Assets (in ₦ mn)

Net Asset Value (in ₦ mn)

UPDC REIT Profit After Tax (in ₦ mn)(1)

Commentary

• UPDC REIT is a close-ended property fund with underlying assets comprising a diversified portfolio of commercial and residential real estate assets

• The REIT is invested in seven (7) major investment properties located in Lagos, Abuja and Aba

• In 2018, the properties earned gross rental income of ₦1.3bn. The REIT also earned interest income of ₦837mn from cash and short-terminvestments. Reported PAT was c.₦2.6bn (after fair value gains)

• UPDC REIT paid aggregate dividends of ₦1.3bn in 2018, a c.10% yield

at 5 September 2019

13

30,927 32,974 31,991 31,448 32,584

34,708

Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jun-19

30,032 31,047 30,852 31,239 31,726 33,498

Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jun-19

2,990

1,512

2,208

2,645

Dec-15 Dec-16 Dec-17 Dec-18

Unpacking UPDC REIT Market Value 14

Market Capitalisation Bridge (in N mn)

Commercial

Property

45%

Residential

Property

38%

Other

Property

1%

Liquid

Assets

15%

Other Assets

0.4%

UPDC REIT Asset Mix (H1 2019)

Note:1 – Federal Government of Nigeria

15

Commercial Property – 45%1

Residential Property – 38%2

• Holdings in FGN1 treasury bills bills and

Investment-grade commercial papers

issued by Nigerian corporates

Liquid Assets – 15%5

• Furniture and fittings; and other property

related assets

Other Assets – 0.4%6

As at 30 June 2019, UPDC had c.₦35bn in total assets

PropertyCarrying Value

(₦ bn)2018

Rental Yield

VMP 2 9.8 10.9%

Abuja Complex 1.6 5.4%

1-2 Factory Road 0.8 5.3%

Kingsway Building 3.4 5.7%

PropertyCarrying Value

(₦ bn)2018

Rental Yield

VMP 1 9.1 2.0%

Abebe Court 4.1 4.2%

Other Property – 1%3

• Student accommodation (hostels) with carrying value of ₦0.4 bn

Strategic Initiatives

UPDC Initiatives (1/2) 17

N

1 The ₦15.96bn Rights Issue to repay short-term debt

UPDC

UACUPDC Public

Shareholders

64% 36%

• UPDC requires equity to improve its capital structure

• Focus is on reducing debt to levels serviceable from

recurring cash flows

• Expected to raise ₦15.96bn from the Rights Issue, where

net proceeds will be used to paydown the 12-month

bridge loan

• Only outstanding debt at UPDC will be the c.₦4.3bn

corporate bond

• Successfully completing the Rights Issue will materially

improve UPDC’s capital position

UPDC issues shares to its shareholders

UPDC issues shares to its shareholders

UPDC Initiatives (2/2) 18

Notes: (1) As a result of the UAC Unbundling, UAC shareholders will also directly hold UPDC REIT units. Ultimate shareholding and unitholding in UPDC and UPDC REIT respectively will be determined post the Rights Issue

2 UPDC will unbundle its interest in UPDC REIT to its shareholders

UPDC

UACUPDC Public

Shareholders

64%

38%

Key benefits

• Increase in free float and potentially improve liquidity in the REIT units

• Release of value to shareholders

• UPDC REIT is profitable and has market capitalisation of

₦13.1bn, NAV of ₦33.5bn and paid ₦1.3bn in dividends in 2018

• Also has a consistent track record of dividend payments,

which UPDC shareholders will now benefit directly

UPDC REIT

UPDC REIT

Public Shareholders

62%

UPDC REIT

UPDC Public

Shareholders

UPDC REIT

Public Shareholders

UAC

ShareholdersUAC

Shareholders

100%

Pre-Unbundling Post-Unbundling

36%

38%62%1

UAC Initiatives 19

Notes: (1) As a result of the UAC Unbundling, UAC shareholders will also directly hold UPDC REIT units. Ultimate shareholding and unitholding in UPDC and UPDC REIT respectively will be determined post the Rights Issue

UPDC

UAC

64%

The UAC Unbundling aims to streamline UAC’s corporate structure and ensure focus on its core

sectors. Envisaged benefits of the unbundling include

• Deconsolidation of a business (i.e. UPDC) that has a different cashflow profile and capital needs

from the rest of UAC’s portfolio

• Increased management focus on the rest of UAC’s portfolio

• In addition to owning shares in UAC, UAC Shareholders will also own shares in UPDC and units in

the REIT, providing shareholders with investing flexibility

• By virtue of their ownership of UPDC REIT units, each shareholder of UAC will have a direct

exposure to the REIT which has paid dividends in every year since its establishment

• Positions UPDC to thrive as a standalone entity targeting appropriately structured capital and

pursuing growth initiatives

UPDC REIT

UAC

Shareholders

100%

Pre-Unbundling Post-Unbundling1

62%

UAC

Shareholders

UPDCUAC UPDC REIT

100% 64%1 39%1

Repositioning UPDC

UPDC Update 21

• We have made progress in our efforts to position UPDC for growth, post recapitalization

• Strengthened management teams at UPDC and UPDC Hotels Limited (our Hospitality Asset)

• Reduced operating cost

• Improve cash management

• Efforts are ongoing to further strengthen UPDC’s governance and management

• UPDC’s strategic priorities are anchored on:

1. Repositioning the portfolio: continue to harvest capital from low yielding projects (c. ₦4bn year-to-date).

Liquidity will be utilised to redeem the corporate bond and invest for growth

2. Improve Hotel Performance: historical stance has been to sell the hotel with limited focus on interim

ongoing performance. Focus is on getting the hotel to profitability

3. Invest in yielding assets: currently exploring developments with initial cash on cash yield of >10%. UPDC

will focus on assets with guaranteed offtake/attractive initial yields

Recent additions to the UPDC management team 22

Mrs. Deborah Nicol-OmeruahChief Commercial Officer

Mrs. Folakemi Fadahunsi Finance Director

Mr. Kevin TeeroovengadumSenior Advisor

Joined February 2019Joined March 2019

• 19 years of experience across consumer

markets, telecommunications and the

public sector

• Prior roles include Senior Manager,

Advisory at PwC Nigeria and Enterprise

Control & Compliance Manager for

Honeywell Group

• MBA (Finance), Manchester Business

School; Fellow of the Institute of Chartered

Accountants of Nigeria

• 17 years experience working in the wealth

management and property finance space

• Prior roles at Broll Property Group,

Landmark Africa, Stanbic IBTC Bank, Lloyds

and HSBC Bank

• Certified Mortgage and Financial Adviser

(CeFA, CeMAP) and BArch Architecture,

University of Nottingham

• Deal making experience in various sectors

in Africa for the last 19 years

• Co-Founder of ProptechAfrica

• Prior roles include Director at Actis focusing

on Africa Real Estate, Founder CEO of

AttAfrica

• Chairman of the Board of Radisson Blu

Azuri Resort & Spa and Radisson Blu Poste

La Fayette Resort & Spa

Joined April 2019

Revamped management team at UPDC Hotels 23

Mrs. Ada AniaguChief Financial Officer

Mr. Roderick PeckGeneral Manager

Mrs. Ijeoma UgamahSales & Marketing Manager

Joined September 2019 Joined August 2019Joined April 2019

• Extensive experience working in the

hospitality industry across 3 continents

• Prior roles include GM, RLI Kendeja Resort

& Villas, Liiberia; GM Corinthia Hotels, Syria,

Egypt and Gambia; Rex hotels, Kenya;

and Corus hotel, UK

• BA Hotel and Catering Studies,

Bournemouth University

• Seasoned finance professional

• Prior roles include Head of Finance,

Transcorp Hotels and Senior Audit

Associate, PwC Nigeria

• Member of the Association of Chartered

Certified Accountants (ACCA) with a B.A

degree in English & Literary Studies from

the University Nigeria

• Experienced sales and marketing

communications manager

• Prior roles include Group Sales & Marketing

Manager at Curzon & Jones; National

HORECA manager at Diageo and Sales

Manager at Intercontinental Hotel Lagos

• M.Sc. Marketing Communications and

Public Relations from the University of

Chester

Strategic focus of UPDC Hotels Limited 24

• UPDC’s historical stance was to sell the hotel with limited focus on short-term

ongoing performance. Our strategic focus is now to return the hotel to

profitability

• The critical pieces to the future performance of the hotel are

• addressing energy costs (c.40% of revenue)

• improving occupancy

• Energy costs have been a major drag on performance. Adopting energy

efficiency initiatives will lead to improvements in profitability

• Initiatives to drive occupancy include

• Increased marketing efforts with a focus on the conferencing segment

and corporates in its immediate proximity

• Exploring alternative access to the hotel via waterways

Strategic plansOverview

• UPDC Hotels Limited, a subsidiary of UPDC Plc (95%

stake), owns the Festac 77 Hotels, also known as

Golden Tulip Hotels, a 471 room hotel with 9

conference rooms and a banquet hall

Conclusion

Conclusion 26

• UAC has explored options to address the variance between UPDC’s profitability and cash flow profile relative to other entities within the

group

• UPDC has struggled of recent with high levels of leverage resulting in losses since 2016

• Investors in the UPDC REIT have had limited liquidity; UPDC REIT dividends that could have flowed to UPDC shareholders have been

absorbed by UPDC

• The recently announced strategic initiatives are aimed at resolving the challenges identified above and position UAC, UPDC, and UPDC

REIT to maximize stakeholder value

• We believe that the initiatives will

• Simplify UAC Group structure and increase management focus on the consumer facing portfolio

• Recapitalise UPDC, positioning the company for growth, with flexibility to target appropriate structured and tenured capital

• Provide liquidity in the UPDC REIT and allow for dividends to flow directly to UPDC shareholders

• The outlook for UPDC is a business with significantly improved capital structure that is positioned for growth

• Critically we have and continue to take steps to strengthen management and governance at UPDC and UPDC Hotels