Growthpoint Properties Limited, South Africa’s largest listed property company with property assets exceeding R9 billion and a market capitalisation of more than R7 billion, today announced an uniquely funded transaction, whereby a BEE consortium will acquire 100 million Growthpoint shares and debentures or linked units (approximately 14% of the total Growthpoint linked units in issue) in a deal valued at more than R1 billion, at the current market price of Growthpoint linked units of over R10.

“This is the largest empowerment transaction in the listed property sector to date and the first of its kind”, said Sam Hackner, Chairman of Growthpoint.  “We are delighted with our new shareholders and BEE partners and look forward to their valuable strategic input and positive contribution at shareholder, as well as Board level” said Hackner.

The BEE consortium comprises 3 broad based empowerment companies; Amabubesi Investments (Pty) Limited (“Amabubesi), Miganu Investment Holdings (Pty) Limited (“Miganu”) and Unipalm Investment Holdings Limited (“Unipalm”), each of which will own a 1/3 interest in the BEE Consortium which will own its interest in Growthpoint via a Trust.

Key role-players and shareholders in Amabubesi include Bulelani Ngcuka, Sango Ntsaluba, Thabiso Tlelai and Peter Moyo whilst Miganu Chairman, Mzolisi Diliza and Dr Penuell Maduna are key representatives of Miganu. Cape based entrepreneur Ragavan Moonsamy and Lazarus Zim are the largest shareholders in Unipalm. “We are extremely excited at becoming Growthpoint’s BEE partners as Growthpoint is the clear leader in the listed property sector with a quality, sectorally and geographically diversified property portfolio unparalleled in South Africa” said Amabubesi Chairman Bulelani Ngucka.  “We look forward to a mutually beneficial, long term relationship as shareholders of Growthpoint and participants in the management contract”, added Lazarus Zim. As part of the transaction, the BEE consortium has also acquired a 14% interest in the Growthpoint management contract, which was sold to them by Investec Property Group Limited.

“The structure of the transaction is unique in that Growthpoint has not issued new linked units at a discount to facilitate the transaction, thereby diluting existing unitholders and eroding value.  Instead two existing shareholders of Growthpoint, the Mine Pension Funds (“MPF”) and Investec have agreed to sell a total of 100 million of their Growthpoint linked units to the BEE consortium” said Growthpoint CEO, Norbert Sasse. This removes the perceived “overhang” of the shareholding of the MPF who have systematically been reducing their overall exposure to property including Growthpoint. Just more than two years ago the MPF owned around 70% of Growthpoint whereas this transaction will reduce their overall shareholding to benchmark levels.

“We have procured third party funding for our BEE partners from ABSA, Old Mutual Specialised Finance and Investec Private Bank for R701 million with Growthpoint stepping in as mezzanine debt provider for the balance of the total funding required being R204 million” said Sasse.  “This means no up-front dilution nor any up-front cost to existing Growthpoint linked unitholders” he added.

Mzolisi Diliza, the representative for Miganu, is already a director of Growthpoint, whilst Bulelani Ngcuka and Ragi Moonsamy will be appointed to the Board with immediate effect. “It is an exciting prospect to join this highly skilled and competent Board of Directors and we are eager to play an active and participative role in identifying opportunities and adding value” commented Ragi Moonsamy, CEO of Unipalm

Mark Currie from Investec’s Treasury and Specialised Finance Division, who were responsible for structuring, arranging and implementing the transaction and acted as lead arrangers and transaction advisers commented by saying “We are pleased to have been instrumental in this ground-breaking BEE transaction for Growthpoint and believe that by bringing all the parties together we have created and added a lot of value for all parties concerned”.

ENDS

Norbert Sasse

Growthpoint Properties Limited
(011) 286-7306
083 632 1599
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Sandy Davey
Marketing Concepts
(011) 880-2213
083 453 6668
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