Hyprop Investments has concluded a conditional agreement to dispose of its interest in four shopping centres in Nigeria and Ghana to Lango, in exchange for shares in Lango, completing its exit from sub-Saharan Africa (excluding South Africa).
Lango is a real estate company focused on direct investment in prime commercial assets in key gateway cities across Africa.
The conclusion of the sale agreement was delayed for several years by Covid-19, US dollar shortages in Nigeria, and exchange rate volatility. The conditions precedent to the previous sale agreement for Ikeja City Mall signed in November 2020 with a fund managed by Actis, were not fulfilled and the agreement was terminated.
The Ikeja City Mall in Lagos, Nigeria, is owned by Gruppo Investments, which in turn is 75% held by a subsidiary of Hyprop, and 25% held by a subsidiary of Attacq Limited. Gruppo Investments and its two Mauritian holding companies will be sold to Lango Real Estate for US$32 million, net of debt, payable in Class A Lango shares, resulting in Hyprop holding shares worth US$24.1 million in Lango, while Attacq will hold US$7.9 million in Lango shares.
The Ghanian centres (Accra Mall, Kumasi City Mall, and West Hills Mall) are owned by AttAfrica which is jointly owned by subsidiaries of Hyprop and Attacq. Hyprop’s effective economic interest in AttAfrica is 73.12% and Attacq is 26.88%. AttAfrica is being sold to Lango Real Estate for a total consideration of US$27.3 million, net of debt, which will be paid in the form of Class A Lango shares. Hyprop will hold shares worth US$19.9 million in Lango with Attacq holding Lango shares worth US$7.3 million.
For both transactions, 20% of the shares payable will be held in escrow until the earliest of 30th of June 2025 or six months after the completion date, pending the sellers fulfilling their commitment to assist the buyer with onboarding the retail centres. Upon conclusion of the transactions, Hyprop and Attacq will be released from all their commitments relating to the in-country debt in Ghana and Nigeria. Both sale transactions are subject to several conditions, which are mainly regulatory approvals. Hyprop does not intend to be a long-term holder of Lango Real Estate’s shares.
“We are satisfied that we have reached an agreement, after a lengthy process, to find a suitable buyer,” Hyprop CEO Morne Wilken said.
“These four retail centres are well-located and well-managed, however, they no longer fit into our broader strategy. The finalisation of the disposal will afford us the opportunity to focus our energy and resources on ensuring our dominant retail assets in South Africa and Eastern Europe remain relevant, differentiated, and profitable.”
