Rebosis announces R6.3bn sale of its government-tenanted office portfolio

Debt-laden Rebosis Property Fund announced the sale of its broader government-tenanted office portfolio in a surprising R6.32 billion deal on Thursday, which upon finalisation will slash its debt significantly.

Rebosis revealed in a JSE Sens statement that the sale (32 properties) is to a company known as Ulricraft Proprietary Limited – a subsidiary of Vunani Capital Partners (VCP), which is listed on the Equity Express Securities Exchange (EESE).

Interestingly, in its Sens statement Rebosis lists the official valuation of the property portfolio being sold at just over R5.3 billion.

This means that if the sale goes through, the portfolio will be sold at a premium to the book value.

Ulricraft is a newly established company set up by VCP to acquire the office property assets from Rebosis, however, very little information about the company is available online.

Read: Ngebulana wants Rebosis’s LTV below 40%

The Joburg-based EESE is the most recent exchange to be awarded a licence, according to its website. EESE notes that it was specifically created to look after the needs of broad-based black economic empowerment schemes.

“Rebosis is pleased to announce that it, together with its wholly-owned subsidiary Ascension Properties Limited, has concluded agreements with Ulricraft Proprietary Limited [the purchaser], in terms of which the purchaser shall acquire from the Rebosis Group the portfolio of rental enterprises [government-tenanted office] as a going concern and for an aggregate cash consideration of R6 319 099 000,” its Sens statement says.

“The sale portfolio comprises, inter alia, government and state-tenanted office assets which will be sold to the purchaser as going concerns in terms of the transaction,” Rebosis adds.

“The purchaser is an entity established for the purposes of participating in the transaction and is a wholly-owned subsidiary of VCP, a company listed on EESE,” the group further points out.

In its JSE Sens statement, Rebosis notes that “VCP is currently the owner of all of the issued share capital of the purchaser [Ulricraft].” However, upon fulfilment of all the conditions precedent as part of the deal, “it is expected that VCP will only own between 6% and 9% of the purchaser”.

Read: Rebosis’s Ngebulana threatened to interdict Moti from AGM

Rebosis says that the balance will be “owned by the equity funders” of the transaction. However, these details are yet to be revealed.

“The transaction is consistent with the company’s strategy to deleverage and optimise its balance sheet by reducing its LTV [loan-to-value ratio],” the group states.

Rebosis adds that the transaction also aims to:

• realise the value of the office segment of its portfolio;
• restructure the business as a retail-focused fund; and
• position the company to resume dividend payments to shareholders.

There are several conditions precedent for the sale to go ahead, such as securing the relevant approvals from competition authorities, successful completion of a due diligence process by the purchaser, and approval by Rebosis’ shareholders.

The group is hoping to finalise the transaction by February next year.