In a proposed capital structure overhaul, Bonatla was to be transformed into a property loan stock company but unitholders acting on a recommendation by the directors voted against this move in a recent general meeting.
Chairman Ben van der Ross said yesterday the rejection of the proposed restructuring came in the light of alternative opportunities 'potentially representing superior prospects for enhancing shareholder value'.
Initial speculation was that the group was talking to two other listed property companies, iFour and A-prop, but Fairvest is now also lurking in the background.
The three-way merger speculation was sparked by the issuing of cautionary notices on the same day last month by Bonatla, A-prop and iFour.
Such a merger could create one of the largest property funds on the JSE Securities Exchange SA.
Bonatla's founding director and major unitholder, Nicky Vontas, strongly denied suggestions of a possible merger between the three companies on grounds that it was not a viable consideration.
It is believed Vontas is punting an idea of a merger between Bonatla and his other start-up operation which is listed property loan stock company Fairvest.
Vontas declined to comment on the Fairvest speculation but said the rejected proposal presented a cosmetic solution not well suited for Bonatla's long-term view.
The proposal entailed the issue of about 55,5million compulsory convertible debentures in Bonatla at an issue price of 45c a unit to BoE. In addition about 6-million new Bonatla linked units would have been issued at 50c a unit.
The promised plan to improve Bonatla's gearing quoted at 73% in the interim results for the six months ended March.
Certain unit holders are said to have been unhappy about the issue price, saying it was cheap compared to Bonatla's underlying assets.
Another concern is said to be fees due to Bonatla's asset manager, Catalyst, for putting together this capital restructuring.
The latest announcement came with a note that 'as the restructuring will not be implemented, the majority of the estimated costs of R4,2m will not be incurred'.
The actual costs incurred are not considered to be material,' said the group.
Bonatla's linked unit price closed unchanged at 40c on the JSE yesterday.
Business Day
Publisher: Business Day
Source: Inet Bridge
