Rebosis Property Fund has announced that it has entered into a sales agreement with Ulricraft (Pty) Ltd., a Special Purpose Vehicle (SPV) wholly owned by Vunani Capital Partners Ltd. (VCP), a company listed on the Equity Express Securities Exchange, which could see the company dispose of its commercial office portfolio for R6.32 billion.
Proceeds from the disposal will used to pay down Rebosis’ debt from R9.4 billion to approximately R3 billion which will substantially deleverage the REIT’s balance sheet. Following the transaction, Rebosis’ loan-to-value is expected to reduce to approximately 42% from the 72.2% reported for the six months ended February 2021, in line with acceptable loan-to-value levels for REITs.
“This is an important milestone as part of our roadmap to deleverage the balance sheet. It crystallises value for shareholders and repositions Rebosis as a well-capitalised, retail dominant REIT with solid growth prospects, paying consistent distributions to shareholders” commented founder and CEO of Rebosis, Dr Sisa Ngebulana.
The transaction is subject to several conditions including the successful completion of a due diligence by the SPV, regulatory approvals and approval by Rebosis’ shareholders.
Rebosis’ commercial portfolio includes 35 buildings and 1 industrial property of which 32 will be disposed of. 15 of these assets are held directly by Rebosis and independently valued at R3.64 billion, including some iconic buildings such as 11 Diagonal Street (the ‘diamond building’) in Johannesburg.
A further 17 assets in Rebosis’ wholly owned subsidiary, Ascension Properties Limited, independently valued at R1.99 billion, are also included in the disposal.
Most of these assets are let by various government entities and parastatals with three of the assets currently being converted into purpose-built student accommodation.
On successful conclusion of the transaction, Rebosis will be repositioned as a retail-focused fund, valued at R7.5 billion and comprising of 5 dominant retail malls and 4 office / retail / other assets with a strong balance sheet and a loan-to-value ratio of approximately 42% and the company will be able to resume dividend payments to shareholders.
