Sisa Ngebulana’s vehicle, Rebosis Property Fund, has facilitated an interesting black economic empowerment (BEE) transaction which sees it sell a 31% stake in a UK retail income fund, New Frontier Properties, to a group chaired by Nkosi-Yawo Gugushe.
The transaction can be seen as a new generation type of BEE deal. This is because Rebosis can to a large extent be considered a BEE play itself. And so this deal does what many people have been longing for: black on black empowerment. It’s a masterstroke coming after Rebosis brought in Andile Mazwai as COO showing a potential black on black succession which is a rare thing on the JSE.
Rebosis said it has reached an agreement with a 100% black-owned B-BBEE consortium chaired by Nkosi-Yawo Gugushe. The 31.6% stake in New Frontier Properties is to be sold for a total consideration of R917 million, at a sales price of R19.00 per share.
New Frontier owns three centrally located out-of-London retail centres valued at GBP 272.8 million. They comprise an aggregate rentable area of 1 091 456 square feet. The properties are located in Burton upon Trent (Coopers Square), Middlesbrough (The Cleveland Centre) and in Blackpool (Houndshill Shopping Centre).
Rebosis is to advance a loan to the B-BBEE Special Purpose Vehicle to enable it to fund the acquisition. The loan complements equity contribution by the SPV. Rebosis has an option to substitute the loan with bank finance and is currently considering the option.
Rebosis COO, Andile Mazwai, described the deal as a meaningful empowerment transaction which fulfills a number of strategic goals for Rebosis. “It allows us to reduce our shareholding in New Frontier and de-consolidate our investment by introducing new shareholders. This will improve our IFRS gearing levels.
“It also contributes to our commitment to transformation in the listed space. Rebosis continues to champion transformation by creating a vehicle through which black people can participate in the U.K. and European property markets over a five-year horizon.
“Rebosis remains supportive of New Frontier and will retain a significant but non-controlling strategic holding,” said Mazwai.