Listed property company Bonatla has said a restructuring process carried out between March and April this year put it back in the black, and it is now showing a positive net asset value of R2,27m.

Bonatla CEO Robin Rainier, who came on board to restore Bonatla's fortunes in November 2004, said on Wednesday new management had managed to turn around a R25m "negative capital position" in the last year.

Rainier said an unqualified review report by Grant Thornton on the financial position of the company, which was included in the company's results for the six months to March, referred to the financial period before the restructure. The report had said Bonatla had total assets of R3,7m, and that its liabilities exceeded assets by R5,7m.

But the company had since reduced debt to a point where its liabilities were less than its assets.

He said an interest-rate swap agreement had been entered into by Bonatla's former asset managers, Catalyst Asset Managers, in November 2002.

When the interest-rate swap was closed last year, it resulted in a debt of R27m to Nedbank.

But the new asset managers and board of Bonatla negotiated the repayment of the swap, giving Nedbank R19m worth of compulsory convertible preference shares, which ranked as equity, and R8m worth of cumulative redeemable preference shares, which ranked as a liability from an accounting point of view.

Rainier said that during March and April, Bonatla and Nedbank had agreed to convert the R8m redeemable shares to R9m worth of convertible preference shares

This converted the entire "original swap debt" into equity.

Rainier said Bonatla was also looking to dispose of certain investments and would focus on acquiring fixed properties.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge