Vunani Property Investment Fund (VPIF), the office dominated JSE listed property fund today announced that a sale of business agreement has been entered into between Vunani Property Asset Management Proprietary Limited (“VPAM”), a wholly owned subsidiary of Vunani Properties Proprietary Limited (“Vunani Properties”), which is a 78% owned subsidiary of Vunani Limited, and Texton Property Investments Proprietary Limited (“Texton”) in terms of which VPAM will dispose of its business, including the cession and assignment of the Asset Management Agreement between VPIF and VPAM and the employment contracts to Texton for a total cash amount of R117 million.
Rob Kane, CEO of VPIF commented, “This is an enormously important deal for VPIF which will create a springboard for the Fund to become a mid-sized and potentially a larger fund. The incoming shareholders are hugely competent both in directly held properties and in the listed property sector, are well known and respected in property circles and most importantly will add considerable property knowledge and expertise to the VPIF board.
“We have enjoyed a successful relationship with the existing management company, including our listing on the JSE which allowed us to deliver attractive returns to shareholders.”
The rationale for Texton’s investment is that the Company believes that VPIF can become a meaningful player in the listed property sector. It is well placed to achieve this due to its existing portfolio, experience, network and deal making track record, notwithstanding a high experience existing management team.
Rob Kane has taken up a shareholding in Cozifor which owns 100% of Texton and will remain as the CEO of VPIF. Ms Marelise de Lange will remain as the CFO of VPIF and will be a shareholder. The Texton management team will comprise of the following highly experienced individuals; Angelique de Rauville, Gerard de Rauville, Chick Legh and Thys van Heerden. Investec Bank will act as the funder.
In compliance with the new DTI BEE codes and the Property Charter, Texton will put in place a BBBEEE share scheme at VPIF level.
Commenting on this, Angelique de Rauville said: “The sale of the assets from Vunani to Texton is an example of successful empowerment in the property sector. This is a transaction that will result in significant wealth creation for Vunani Limited and its investors. “
Managing Director of Vunani Limited, Butana Khoza added, “We have been a shareholder in the Manco for the past seven years, and together with VPIF, have built a successful business which has delivered significant value to shareholders. This value will now be reinvested in Vunani’s operating businesses resulting in a meaningful BEE story.”
“Texton is fully committed to the implementation of a tangible empowerment structure as soon as is reasonably possible – working towards an April 2014 timeline. The structure under consideration will provide meaningful BEE participation at the VPIF level, provide broad-based empowerment which management feels particularly strongly about and in addition result in little, if no dilution to existing unitholders,” concluded de Rauville.
“This transaction will pave the way for another BEE transaction which will hopefully achieve the same success that VPIF has in empowering Vunani and its investors,” added Kane.
“This is a new era for the Fund, and we are very excited about what is to come. Looking ahead, we are well positioned in respect of the much anticipated impending corporate activity in the sector which should lead to enhanced deal flow. The new shareholders are committed to bringing solid deal flow to the Fund. There will however be no change to the strategy of the business and we intend remaining an office dominated Fund,” he concluded.
The transaction is still subject to various conditions precedent customary for a transaction of this nature, including approval by the VPIF board and unitholders. The new shareholders will bring with them a significant portfolio which, subject to shareholder approval, will be injected into the Fund through the take-up of units.