Rebosis has announced the termination of the disposal of its office portfolio due to the condition precedent not being met within the required period.
The condition precedent required the purchaser to obtain finance before it would be put to shareholders for approval by way of a circular. The latest deadline to fulfil the condition precedent was on the 22nd of June 2022 after having been extended to allow the purchaser additional time to fulfil this obligation.
“We believe the termination of these discussions is in the best interest of our shareholders. The management and board of Rebosis have been working on various short- and medium-term turn-around strategies for the group, in parallel with the disposal transaction”, commented Kameel Keshav, Independent Non-Executive Chairman of Rebosis.
“We are currently engaging with stakeholders on refinancing and restructuring initiatives that will strengthen the group’s balance sheet, address the REIT status concern, and ultimately unlock value in the business”.
“In this regard, the newly constituted board and management are considering alternative options available to the group and will communicate a definitive structure and strategy on or about 31 July this year.”
Rebosis originally announced on the 21st of October 2021 that it had entered into negotiations with Ulricraft Proprietary Limited for the disposal of the majority of its commercial office properties for an aggregate cash consideration of R6.32 billion. On the 25th of March 2022, this amount was revised to R3.4 billion for a reduced portion of the office portfolio, at a blended yield of 9.4%.
“Our immediate priority is to reduce the group’s debt to below covenant levels, that will allow us to negotiate longer debt terms with our funders. This will move a considerable portion of debt from current liabilities to long-term liabilities and provide headroom on the balance sheet”.
“As part of our strategy we have considered several viable options, including disposals. No asset across our portfolio is sacrosanct, however only offers at market related value will be considered”, said Otis Tshabalala, CEO of Rebosis.