A Black Economic Empowerment (BEE) consortium led by co-founders and managers of JSE listed property loan stock company Dipula Income Fund are set to up their stake in the fund in a move that further boost BEE on the JSE’s real estate sector.
The consortium led by Mergence Africa Property Funds and and Dijalo Property Fund have announced that they will acquire a further 47% of Dipula B-units in issue from Redefine Properties. The transaction increases the black shareholding in Dipula Income Fund to some 30%, the highest percentage black ownership for a company in the SA listed property sector.
Dipula Income Fund was listed on the JSE in August 2011 when Mergence and Dijalo merged to create the second black managed property fund on the bourse, with assets of over R2,1 billion and market capitalisation surpassing R1,4 billion. Both founding companies were originally established as enterprise development initiatives and formed part of Redefine Properties’ broader commitment to BEE.
Redefine Properties retained approximately 66 million Dipula B-units at the listing. Since Dipula then, it has successfully sold 16 million Dipula B-units through the market. Redefine Properties will sell its remaining 50 million Dipula B-units to the BEE management consortium.
Marc Wainer, CEO of Redefine Properties says: “The transaction allows Redefine Properties to dispose of all of its remaining units in a single transaction. The disposal is in line with Redefine’s strategy to focus on fewer, larger properties and has the added benefit of furthering the BEE objectives underlying the initial establishment of the Mergence and Dipula funds.”
Izak Petersen, a co-founder of Mergence and CEO of Dipula Income Fund says: “The investment by Mergence and Dijalo reflects the inherent value in the Dipula B-unit and their confidence in Dipula Income Fund’s sustainable income growth. The transaction increases the black shareholding in Dipula Income Fund to in excess of 30%, further entrenching its status as the leading black owned and black managed listed property fund. The substantial ownership by management supports continued strong goal alignment. It also removes the perceived overhang of the Redefine Properties stake.”
The transaction will take effect after payment of the distribution on Dipula B-units for the income distribution period ended 29 February 2012 and is still subject to the securing of the necessary funding for the acquisition.