Rentsure, Daisy portfolio destined for Fairvest

Posted On Friday, 27 September 2002 02:00 Published by
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The property portfolio that is changing hands in a complex transaction between Rentsure Holdings and Daisy Street is destined for property loan stock company Fairvest Property Holdings
The property portfolio that is changing hands in a complex transaction between Rentsure Holdings and Daisy Street is destined for property loan stock company Fairvest Property Holdings.

While the transaction serves Rentsure's strategic objective of reducing exposure to the property market, it also feeds into Fairvest's ambitions of growing its portfolio and achieving critical mass.

Announced yesterday, the proposed R91m transaction will transfer a specific property portfolio from Rentsure's subsidiary, Rentmeester Assurance, to Daisy Street.

Daisy Street is in turn set to be acquired by Fairvest after the Rentsure property portfolio deal. This arrangement forms one of the key conditions of the transaction.

The Daisy Street portfolio that includes properties from Rentsure will boost Fairvest's portfolio by about R500m to a total of about R850m.

Daisy Street investors are set to get a combination of cash and Fairvest paper when they sell to Fairvest.

The Daisy Street portfolio is made up of a mix of retail, industrial and office properties located across the country. The Daisy Street/Rentsure deal comes with a leaseback arrangement where Rentsure has signed up to occupy some portions of the portfolio after the sale.

The leaseback arrangement covers certain portions of a property called Rentmeester for which Rentsure has signed a 10 year lease, with a rental escalation rate of 9% a year. Other portions of the portfolio will be leased to Rentsure for three years with a rental escalation rate of 9% to10% a year.

Rentsure said it was working towards reducing its exposure to property and enhanc ing its asset distribution. The purchase consideration of R91m is to be effected through R30,3m cash combined with an issue of Fairvest paper to Rentsure.

About 21,5 million convertible Fairvest debentures are to be issued at 150c a debenture and adding to a total of R32,3m.

A further 18,9 million compulsory convertible debentures will be issued at 150c a debenture and adding to a totalling of R28,3m.

Fairvest's share price closed unchanged at 60c yesterday.

Parties in this transaction were not available for comment yesterday.

Business Day


Publisher: Business Day
Source: Business Day

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