- JSE’s first black-managed and significantly black-owned REIT now leading major empowerment deal.
- B-BBEE consortium to acquire 31,6% stake in UK retail income fund, New Frontier Properties from Rebosis.
- Total transaction consideration of R917 million via vendor loan.
- Rebosis retains strategic interest of 36% in New Frontier.
- Deconsolidation supports Rebosis’ gearing ratio, further optimises balance sheet.
Rebosis Property Fund yesterday announced a sector leading empowerment transaction.
In terms of an agreement reached with a 100% black-owned B-BBEE consortium chaired by Nkosi-Yawo Gugushe, Rebosis will dispose of a 31,6% stake in UK retail income fund New Frontier Properties for a total consideration of R917 million, at a sales price of R19.00 per share.
Rebosis has advanced a loan to the B-BBEE Special Purpose Vehicle (BEE SPV) to enable it to fund the acquisition of the share in New Frontier, payable over an initial five-year term, extendable for an additional five years. The loan is in addition to an equity contribution by the BEE SPV in the form of risk capital asfar as it relates to the transaction, that will be offset against the vendor loan.
The vendor has an option to substitute the loan with bank finance and is currently considering the option.
Andile Mazwai, Chief Operating Officer of Rebosis commented: “This is a meaningful empowerment transaction which fulfills a number of strategic goals for Rebosis. It allows us to reduce our shareholding in New Frontier and de-consolidate our investment by introducing new shareholders. This will improve our IFRS gearing levels. It also contributes to our commitment to transformation in the listed space. Rebosis continues to champion transformation by creating a vehicle through which black people can participate in the U.K. and European property markets over a five-year horizon”.
“Rebosis remains supportive of New Frontier and will retain a significant but non-controlling strategic holding.“
New Frontier’s last published results for the nine months ended 31 May 2017 reflect profit after tax for the period of GBP7.459 million and a net asset value of 7.2 pence per share.
The shares have been acquired cum dividend and the BEE SPV will participate in all future distributions declared by New Frontier, including the undeclared distribution for the six-month period ending 31 August 2017.
New Frontier owns three centrally located out-of-London retail centres independently valued at a collective GBP 272 850 000 comprising an aggregate rentable area of 1 091 456 square feet.
The properties are located in Burton upon Trent (Coopers Square), Middlesbrough (The Cleveland Centre) and in Blackpool (Houndshill Shopping Centre).