Texton property announce broad based BEE transaction

Posted On Thursday, 26 February 2015 15:22 Published by
Rate this item
(0 votes)

Texton is pleased to announce that it has reached agreement with a broad-based black economic empowerment Consortium to purchase around 20% of Texton shares. 

Rob Kane

This transaction, together with the investment by PDNA Property Investments in May 2014, will result in a total black ownership of 25% of Texton. The BEE Consortium is led by Zava African Capital which holds 60% of the Consortium’s share capital; Jade Capital Partners holds 30% and Ditikeni Investment Company holds 10%.   The transaction will be achieved through the issue of R443 million new Texton shares to the Consortium.  The BEE Consortium has secured funding from the Public Investment Corporation.

The respective BEE partners will not be able to sell their shares in Texton or the Consortium for a period of six years from date of subscription.  In addition to their shares ranking pari passu and having voting rights, the Consortium will be entitled to nominate a director to the Texton board, who will also become a member of the Texton investment committee. Kane noted that the subscription will be used to take advantage of acquisitions currently in progress amounting to over R500m. The cash will be immediately deployed into acquisitions that will enhance Texton’s offering to its shareholders.

Rob Kane, CEO of Texton, said, “We are committed to the transformation and empowerment objectives of South Africa and we believe this transaction will contribute to transformation in the property sector.  It has been a strategic imperative for us to achieve meaningful, sustainable and commercially driven black ownership at the listed company level. Our BEE new partners were selected after an extremely thorough testing of the market. We are delighted that Zava, Jade and Ditikeni will be working closely with us for the next 6 years and beyond. It is also important that the PIC has seen fit to fund the transaction and this will no doubt strengthen our relationship with them. ”

He added, “With Government as our most important tenant, having 25% of our shares owned by the diverse stakeholders in the Consortium, will give Texton a competitive advantage in the implementation of our organic and acquisition growth strategies.” Texton undertook a vigorous process to consider and evaluate potential partners based on various criteria and the company’s empowerment objectives.  In addition to ensuring maximum compliance, to the extent possible, with the revised DTI Codes, the Property Charter and the DPW BEE ownership Guidelines, the company was intent on the inclusion of new and broad based entrants.

Kane said, “Another criterion for Texton was to ensure the commercial and strategic compatibility of the Consortium with Texton, through existing property sector networks and alliances.  We wanted partners who could make a strong contribution:  offering good commercial acumen and track record; the ability to add value to our organic and acquisitive growth strategy and provide commercial and operating assistance; and to assist us with our broader transformation initiatives. We are delighted that our chosen Consortium meets all our criteria and offers strategic expertise, includes women, and has a broad-based, grassroots footprint.  A material part of the transaction is that the BEE parties will play a meaningful role, and reap the rewards, in Texton Property Investments (the management company). This will enable property skills transfer. At all times, the management company will be fully responsible to Texton for the smooth running of the Fund. ”

The BEE Consortium’s shareholders comprise:  Zava, a successful black owned, managed and controlled diversified investment company which subscribes fully to the principles and spirit of BEE. Zava’s founders and shareholders are Romeo Makhubela and Patrick Ntshalintshali both of whom have extensive experience in asset management. Makhubela commented, “Zava has extensive skills and experience in public sector investment and we will introduce Texton to our networks. We believe that Zava will be key to assisting Texton in implementing its BEE strategy and will be a powerful addition to Texton as it further grows Texton’s business. We look forward to a mutually beneficial partnership.”

Jade, an investment holding company, was founded by Bukelwa Bulo and Zola Ntwasa.  Jade’s primary focus is investment in the property sector, including direct property investments as well as investments in property services companies. Bulo and Ntwasa complimented Texton on their strategy to include a 100% controlled and managed entity in the ownership of Texton.  Said Bulo, “We aim to contribute significantly to Texton through our skills and networks and to learn from the Company.”

Ditikeni is an investment holding group with eighteen shareholders, all of which are non-profit organisations serving black communities at grassroots level. The work of these non-profit organisations impacts directly and indirectly on the lives of over 2 million of South Africa’s poorest and most marginalised citizens. Allan Wentzel, a director of Ditikeni, commented on behalf of its shareholders, saying, “We represent a diverse group of disadvantaged people in South Africa who would not normally benefit from a commercial transaction.  We believe that our participation as shareholders in Texton will bring much needed benefits and upliftment to the organisations in our group.”

The Texton Board has recommended the transaction to shareholders who will vote in March 2015 at a special general meeting.  The transaction will become effective in March 2015 after the fulfilment of a number of conditions precedent including inter alia finalisation of all agreements, Texton Board, shareholder and JSE approval.

Most Popular

SA property prospects as we look beyond COVID-19 lockdowns

Jun 11, 2020
John Loos FNB Property Economist
“The COVID-19 Crisis has changed the world a lot, perhaps less through introducing new…

University of Fort Hare construction resumes

Jun 18, 2020
Construction of UFH Student Housing
Following two months of hard lockdown, the development of a 2 047-bed student village at…

The success of online Property Auctions

Jun 05, 2020
The current state of the economy brought about by many factors including the Covid 19…

Grit to improve liquidity, save costs through proposed JSE de-listing

Jun 11, 2020
Bronwyn Corbett Grit
London Stock Exchange listed Grit announced its intention to de-list from the JSE.

Estate Agency Affairs Board to re-open its doors this month

Jun 13, 2020
Mamodupi Mohlala
The Estate Agency Affairs Board (EAAB) will re-open its Sandton, Johannesburg offices…

Please publish modules in offcanvas position.