Rebosis shares plummet asit ramps up fire sale of assets

Picture: Nicholas Rama
JOHANNESBURG – Rebosis Property Fund, the first black-owned and managed property group to list on the local bourse, yesterday saw its share price plummet by more than 9percent after it ramped up the fire sale of its assets in a R1.8­billion deal with Vukile Property Fund.

The share closed at R1.27 yesterday.

The company said it would sell three of its shopping centres to bigger rivals Vukile as it seeks to repay its debts. The properties comprise of Mdantsane City shopping centre, Sunnypark shopping centre and Bloedstreet Mall.

Rebosis said the deal would become effective on the date of registration of transfer of ownership of the properties into the name of Vukile, which is expected before September, and that the proceeds of the deal would be used to reduce the existing debt of the company.

“The disposals are in line with the company’s intention to reduce its loan to value ratio (LTV) as outlined in the road-map included in the results announcement released by the company on SENS on November 12, 2018, and the pre-close presentation presented to Rebosis shareholders on February 27, 2019,” Rebosis said.

In February, the company said it would dispose of seven properties for R700 million.

The latest deal comes just days after the company warned that its dividend would plummet 52percent in the year to August.

The group in November announced its plans to sell off more than R6bn worth of office property assets by April and that the funds from the disposals would largely go towards bringing down its debt and LTV to below the 40percent mark. However, the company said yesterday that it had experienced delays in the planned disposals of its office portfolio due to long-term leases, which had taken longer than anticipated to renew.

“The company is of the view that it is important to expedite the reduction of its LTV ratio in order to achieve a lower cost of funding, an improved credit rating and a stronger balance sheet, all of which are expected to return market confidence in Rebosis.”

Rebosis, which was listed on the JSE in 2011 by Eastern Cape-born property magnate Sisa Ngebulana, has seen its stock tank 87percent in the past five years, valuing the group at just under R1billion.

Vukile said the acquisition of the shopping centres was in line with its stated strategy of being a high-quality, low-risk JSE-listed real estate investment trust (Reit) operating in South Africa and Spain.

“The acquisitions are consistent with Vukile’s South African focus on mid to low living standards measure shopping centres in South African townships and urban areas. The acquisition will complement Vukile’s retail portfolio and positioning as a leading retail Reit in South Africa,” Vukile said. Vukile, whose stock shed just under 1percent, closed yesterday session valued at almost R20bn.