Rebosis Property Fund’s R3.4 billion deal to sell a large portion of its office portfolio has fallen through.
Ulricraft Proprietary, a special-purpose vehicle owned by Vunani Capital Partners, was not able to stump up the finance, a statement released by Rebosis said yesterday.
Its share price remained static at 19 cents. Proceeds from the sale would have reduced Rebosis’ debt and effectively have eliminated the existing threat to its going concern status.
A condition precedent required Ulricraft to obtain finance for the transaction before it would be put to shareholders for approval by way of a circular.
The latest deadline to fulfil the condition precedent was on June 22, 2022, after having already been extended to allow the purchase additional time to fulfil this obligation.
Rebosis non-executive chairman Kameel Keshav said in a statement: “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 turnaround strategies, in parallel with the disposal transaction.
“We are engaging with stakeholders on refinancing and restructuring initiatives that will strengthen the balance sheet, address the REIT status concern, and ultimately unlock value in the business,” Kershav said.
“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,” he said.
Rebosis originally on October 21, 2021 said that it had entered into negotiations with Ulricraft on the disposal of the majority of its commercial office properties for R6.32bn cash. On March 25, 2022 this amount was revised to R3.4bn for a reduced portion of the office portfolio, at a blended yield of 9.4 percent.
Otis Tshabalala, the newly appointed CEO of Rebosis, said the firm’s immediate priority was to reduce debt to below covenant levels, that would allow the group to negotiate longer debt terms with funders.
“This will move a considerable portion of debt from current liabilities to long-term liabilities and provide headroom on the balance sheet,” he said.
“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,” he said.
Rebosis reported R72.5 million distributable taxed income in the six months to February 28 as shoppers returned to the malls, when compared with a R71.3m loss at the same time the previous year.
edward.west@inl.co.za
BUSINESS REPORT