JSE-listed Paramount Property Fund (Paraprop, PRA) announces details of a significant black economic empowerment (BEE) transaction that will see it sell a 26% stake to a consortium of black partners led by listed Mvelaphanda Group (Mvela, MVG).

The agreement will involve the issue of a new category of shares to a new company owned 75% by Mvela and 25% by a broad-based BEE partner. The new BEE vehicle will hold 26% interest in Paramount and the right to convert these new shares into Paramount linked units in three tranches at predetermined prices. The new BEE vehicle will also be invited to nominate three directors to the Paramount Board.

Commenting on the deal, Rodney Squire-Howe, Paramount's Managing Director, said: "We are delighted with the transaction which will not only put Paramount at the forefront of property empowerment but will also bring Mvelaphanda's proven skills and abilities into our business. Paramount has been conscious of the need to proactively participate in the economic revolution of our country and has therefore embraced this deal as we believe it will benefit both parties."

"The agreement between Mvelaphanda and Paramount has been a challenging and exciting process with both parties committed to the enhancement of shareholder
value."

"Under the charismatic leadership of Tokyo Sexwale, Mvelaphanda is one of the most successful black empowerment groups in South Africa and we are confident that they will contribute positively to Paramount's business."

Squire-Howe added that the announcement was in line with the terms of the newly signed Property Charter which sets out the agreed targets for BEE compliance.

Paramount has a quality portfolio of properties situated in the major metropolitan areas of South Africa, but with a focus largely on the Western Cape. The portfolio is currently valued at approximately 2.2 billion rand and the board has indicated it will work towards an 8% increase in distributions for the financial year ending October 31 2006.

Yolanda Cuba, Deputy CEO of Mvelphanda Group, said:  "The investment in Paramount will increase Mvelaphanda Group's exposure to the property and property related sectors.  In Paramount we are investing in a business that has proven itself, and which we hope to be able to grow further in future."

Paraprop's share price was unmoved on the news in early trade, last quoted on the JSE at 7.30 rand, steady from Friday's close.

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