Presenter: Lindsay Williams  Guest(s): Maria Ramos 

Transport utility Transnet is to sell at least 74% of the Victoria & Alfred Waterfront (V&A) in Cape Town. Registration of expressions of interest in Cape Town’s V&A must lodged no later than 21 July 2006 with a non-refundable R50,000 deposit. With Transnet chief executive Maria Ramos

LINDSAY WILLIAMS: Maria, why are you selling now?

MARIA RAMOS: I think we’ve made it quite clear for some time now that the V&A is not part of our core business at Transnet. We’re obviously not the only shareholders - we teamed up with at least two of the Transnet pension funds, the Second Defined Benefit Fund and the Transnet Pension Fund - and this is a good time for the market...

LINDSAY WILLIAMS: So it’s non-core - yet you’re only selling 74%. Why sell the majority, but also only a part disposal?

MARIA RAMOS: There are four shareholders in the V&A Waterfront - it’s ourselves, the Second Defined Benefit Fund and the Transnet Pension Fund both of which are defined benefit funds, and then we’ve got the Transnet Retirement Fund which currently owns a 22.6% shareholding and they have not yet decided whether they’re going to sell, and in fact they might even push up their shareholding to 26%.

LINDSAY WILLIAMS: Looking back over the years - I think when the V&A Waterfront was in the developmental stage people were saying: “This can’t be a success.” Transnet is obviously an original shareholder - what the history of that investment been?

MARIA RAMOS: The V&A Waterfront is now a prime property - in fact it’s probably the prime property asset in South Africa. It’s done incredibly well in terms of development so far, and it still has quite a lot of development left - there’s quite a lot of land left to develop. I think this is an asset that basically sells itself. It’s done well, and property has done well in our country - and we know there’s going to be a lot of interest. What’s important is to get maximum value out of this transaction.

LINDSAY WILLIAMS: I know it’s a very difficult thing for you to answer - and I know you cant answer it - but is there an awful lot of interest, and what sort of interest are you getting, what sort of parties are coming to you?

MARIA RAMOS: You know I cant answer that. What happens from today is that we go into a proper process - we announced that process today. We will from now on take bids and expressions of interest - in order to get the memorandum of information bidders have to pay R50,000 which is non-refundable, and they have to sign a confidentiality agreement. They also have to provide - as part of the first phase of the bidding process - proper plans, including a funding plan. Then we will go from there into the second phase that entails selecting a group of preferred bidders, and short-listing those, and moving from there into a more detailed process that entails due diligence, etcetera.

LINDSAY WILLIAMS: Do you think there’ll be lots of international interest?

MARIA RAMOS: It’s hard to say. This is the prime property asset in South Africa - so I think we are going to get a lot of interest from everywhere.

LINDSAY WILLIAMS: Does this signal your calling the top of the property market, or is it simply because it is non-core to Transnet?

MARIA RAMOS: It’s non-core to Transnet. We knew that in order to maximise value we would have to sell more than just our own 26% shareholding in it, and eventually the trustees of the pension funds had a look at it. This just happened to be a time when it all came together.

LINDSAY WILLIAMS: Any chance of giving us any idea of how much it will go for?

MARIA RAMOS: No chance at all.

LINDSAY WILLIAMS: Does this signal more non-core disposals in the coming months or years?

MARIA RAMOS: We’ve already indicated that. Now that we’ve got an agreement with our unions we really are quite well-placed to deal with the bulk of the non-core properties at Transnet, actually all of them in the course of 2006.