Bonatla cancels two Sharemax acquisitions

Posted On Wednesday, 15 September 2010 02:00 Published by eProp Commercial Property News
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Bonatla Property Holdings has decided not to pursue its plans to acquire two shopping centres owned by troubled property syndicate Sharemax.

Niki Vontas JSE-listed real estate investor Bonatla Property Holdings has decided not to pursue its plans to acquire two shopping centres owned by troubled property syndicate Sharemax, saying the deal failed to meet Bonatla’s due diligence criteria.

The deal had also turned “hostile”, Bonatla CEO Niki Vontas said. “Sharemax neglected to make some documents to which we were entitled, in terms of the deal, available,” he said.

Mr Vontas said yesterday that following the due diligence process, the company has decided not to buy the two properties, The Villa and Zambezi Retail Park and list them collectively in a company on the JSE.

The shopping centres are situated to the east of Pretoria.

Last week Mr Vontas said he had signed heads of agreement with Sharemax directors to buy properties worth R4,99bn.

Mr Vontas said yesterday: “We have signed 33 agreements and, funny enough, we were approached to do this transaction by Sharemax’s associates.

“We are not desperate to do this deal, but the directors of Sharemax are now digging in their heels. They will have to call a shareholders meeting so that their shareholders can decide.

“After due diligence we decided to pull out of the Zambezi and The Villa because we are a transparent listed company and it did not make any business sense for us to continue with the deal.”

Zambezi and The Villa are Sharemax’s two largest property syndications.

“It’s public knowledge investors in Zambezi and The Villa have not been receiving their monthly income,” Mr Vontas said.

The Financial Advisory Intermediary Services Act Ombud has received complaints about investors in Sharemax syndications not having received income.

Mr Vontas emphasised that he was “dealing with Sharemax’s shareholders and not the company itself” in negotiating the proposed acquisitions.

Excluding Zambezi and The Villa, Bonatla’s prescribed value of Sharemax’s property assets is R2,5bn instead of R4,99bn.

Mr Vontas said last week he become suspicious that in addition to talks with Bonatla, Sharemax had been brokering a different deal on the same properties with a third party. He said his suspicions were justified last week when Sharemax announced a rescue plan to prevent its investors in The Villa and Zambezi from losing parts of their investments

The Zambezi centre has been in operation for months, while The Villa was in development.

In terms of the plan, the company that is developing the shopping centres, Capicol, will sever all ties with Sharemax and then continue their development independently.

Capicol intends to combine Zambezi and The Villa into a single company called Capicol 1.

Investors will be able to take control of the company if they fail to receive their money.

Once financing is attained, investors will likely receive a monthly return.

Capicol said in a statement: “This partnership will ensure that once the relationship is cemented with financiers, shareholders will continue to get paid a monthly interest amount and that Capicol remains the sole developer of The Villa and Zambezi Mall.”

Sharemax director Corrie van Zyl said he could not, in fairness, comment on Mr Vontas’s due diligence process. He said Capicol’s shareholders have not yet accepted or rejected the rescue plan.

Last modified on Saturday, 30 November 2013 12:59

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