Rebosis Property Fund has announced its decision to voluntarily enter business rescue with the immediate suspension of its ordinary shares and A-shares on the JSE.
In a SENS announcement, its board cited numerous factors that places its six-month cashflow in a vulnerable position including the impact of rising interest rates on servicing debt costs, the inability to recover increased municipal costs from sovereign tenants, taxes being levied by some municipalities, the continuous delay of rental payments by certain national provincial government departments – as well as municipalities, who contribute in excess of 50% of Rebosis’ revenue.
“Considering the SARB’s indication of further interest rate hikes in the foreseeable future, and given Rebosis’ limited foreseeable cashflow, the management and Board is of the opinion that the best option to ensure the long-term survival of the Group is to commence business rescue and to implement a business rescue plan as contemplated in Chapter 6 of the Companies Act. Under the direction of an experienced business rescue practitioner, a return to sustainability may be achievable”.
“The Board considers this decision to be prudent and in the best interests of shareholders …”
In early August, the REIT outlined a turnaround strategy which would focus on the group’s balance sheet constraints, leasing alternatives and disposals of 25 of its assets comprising of 23 office buildings and two retail centres.
