Chris van Gass

Cape Correspondent

CAPE TOWN — Transnet and two of its pension funds have launched a process to sell a majority stake in Cape Town’s Victoria & Alfred (V&A) Waterfront by September.

The V&A is considered the jewel in the crown of SA’s property investment sector.

Transnet CE Maria Ramos said yesterday the parastatal would sell 77,4% or 100% of the V&A if a third pension fund, the Transnet Pension Fund, decided to dispose of its 22,6% stake. It had the option to increase its holding to 26%. She said offers would only be considered for at least 25% interest in V&A, and the preference would be for a transaction involving a single buyer.

While Ramos skirted questions about the value for the V&A , industry estimates have put the figure of between R3bn and R6bn for the area around the old Cape Town docklands. It is SA’s most-visited tourist destination, and attracts up to 22-million visitors a year.

So far 55% of the bulk development of the V&A, a world-class mixed-use property development which houses hotels, restaurants, offices, retail space and residential developments, has been completed with 45% left for development.

Offers received in the trade sale process would be evaluated against the potential listing to determine which process would best maximise value for the V&A-linked owners, which are Transnet (26%) and its pension funds Transnet Second Defined Benefit Fund (43,6%), Transnet Retirement Fund (22,6%) and Transnet Pension Fund (7,8%).

Ramos said the trade sale process was designed to ensure a fair, equitable and transparent process.

Interested parties would have to register and pay a R50000 nonrefundable documentation fee to access the V&A’s trading figures.

They would also have to sign a confidentiality agreement, and would be prevented from making contact with staff and management of the V&A, or anyone linked to the unit holders or their offices and staff without prior arrangement.

Ramos said the Transnet board had adopted a policy to prevent conflict of interest in the sale of noncore assets, including an explicit set of requirements to exclude different categories of people from the bidding process.

These included directors of Transnet, senior management and any employee involved in the bidding process, as well as consultants who were providing Transnet with services relating to the assets. Offers would be submitted by July 24, and a decision made by September.

However, Ramos reiterated that Transnet could switch tack at any point during the process to follow the listing option, should that be more beneficial for the owners.

She said there would be a stringent evaluation criteria attached to the sale. The offers would be evaluated out of 100 points, with 85 allotted to purchase price, 10 to black economic empowerment and five for the retention of the 750 full-time staff at the V&A.