Siyathenga seals empowerment deal for R184m

Posted On Wednesday, 18 July 2007 02:00 Published by eProp Commercial Property News
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Listed property loan stock company has announced a R184m empowerment deal for two broad-based empowerment consortiums to acquire altogether 15% of the company

Andre von BulowListed property loan stock company Siyathenga Property Fund yesterday announced a R184m empowerment deal for two broad-based empowerment consortiums to acquire altogether 15% of the company.

Siyathenga said it would issue units to its empowerment partners at an 8,6% discount but with no dilution for existing unitholders.

The equity partners include Tokoloho and Meago.

Siyathenga MD Andre von Bulow said yesterday Siyathenga played its "part in facilitating the transformation of the economy by ensuring the benefits" of the empowerment deal were "truly broad-based. We want to be able to embrace the spirit of transformation while achieving sound business objectives.

"This transaction is expected to be beneficial to both the empowerment partners and Siyathenga unitholders," he said.

Major shareholders in Tokoloho are the Sharpeville Tshwaranang Trust, with 40%, and a group of black business executives and professionals including attorneys and an actuary.

Siyathenga said the beneficiaries of the Sharpeville Tshwaranang Trust were residents of Sharpeville who would receive assistance from the profit made by the trust being "channelled into projects focused on education, health care, child-care, care of the aged, sport, entertainment and business".

The Meago consortium, which is 100% black-owned and controlled, also has broad-based shareholders including the National Children's Rights Committee Trust and community interests.

Siyathenga GM Nikki Blane said the empowerment deal was funded fully by Rand Merchant Bank (RMB), with Siyathenga's Willowbridge shopping centre in Cape Town used as security for the loan.

The units issued to the empowerment partners were pledged to RMB as additional security.

Blane said the cash Siyathenga received for issuing the 22,3-million linked units to the partners would be used to pay off the debt on Willowbridge. "We get an interest saving there. The saving on the cost of debt is higher than the cost of equity and this enables Siyathenga to discount the units without dilution to existing unitholders," said Blane.

She said this would mean that the empowerment deal would be earnings enhancing for Siyathenga.

Blane said Siyathenga's sister company Pangbourne Properties had also previously done an empowerment deal using a property as security.

Sharif Hoosen, a founding partner of Meago, said the Siyathenga deal was a "fair deal" for the black economic empowerment partners "in the context of BEE deals in the listed property sector".

This is Meago's second investment in the listed property sector. Meago is part of a consortium that owns 30,4% of hotel-focused listed property loan stock company Hospitality Property Fund.

Hoosen said Meago did not envisage investing in other listed property funds in real estate. "From our perspective, Siyathenga and the greater Pangbourne grouping provides us with a strategic platform to express our property aspirations."

 

Last modified on Thursday, 24 April 2014 09:33

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