RAPTIS SALE ‘TWIST’
OWN FIRM IN FAMILY DEAL
JIM Raptis, deal-making developer, has a new transaction on the boil – selling a family asset to the listed company the family controls.
The planned sale, which comes with a possible twist and a COVID-19 influence, involves the management rights to Jim’s Waterpoint Residences towers at Biggera Waters.
The deal – the stagnating Raptis Group will buy the rights from the Raptis family for $6.01 million.
The terms – the group, which has $2.07 million in the bank, will pay $1.8 million in cash and borrow the rest from private Raptis finance company Zoe for five years.
The listed company will pay 5 per cent interest and must repay a minimum $200,000 a year.
The “twist” – according to documents sent to shareholders, the Raptis family also is negotiating to sell the rights to a different buyer.
If that deal goes ahead in the 15 months after a sale to the Raptis Group is approved, the group will keep 25 per cent of the profit.
The rest, presumably, will go to the family.
The COVID-19 factor – the rights were valued at more than $7 million in January, prior to the pandemic’s effects.
The sale of the rights to the listed entity is subject to shareholder approval at a meeting on June 2 at which rebound ace Jim and family, who own 63.8 per cent of the Raptis Group, can’t vote.
An independent expert’s report by Grant Thornton Corporate Finance has deemed the transaction fair and reasonable to shareholders not associated with the Raptis camp.
Jim, as chairman, and wife Helen, as a director, aren’t making a recommendation to Raptis Group investors over which way to vote at the June meeting.
Malcolm Cory, the company’s only other director and a 31-year Raptis Group employee referred to by Grant Thornton as “independent”, is more forthcoming. The accountant, who in the last Raptis Group annual report was shown as having an interest in four million shares, says shareholders should approve the deal because it will build an income stream for the group and exposure to an asset expected to increase in value.
The rights are tipped to net $1.11 million in the year to September.
The ongoing Waterpoint development, which Jim has been undertaking on a 2.7ha site for the past few years, has five completed towers, with another one poised to join them.
It has 664 apartments, with 192 in the letting pool.
The upside for the Raptis Group appears to be that the caretaking agreements for the Waterpoint towers have an average 22 years to run and that the sixth tower might become part of the business.
The group, a “patient” that Dr Jim has set out to revive after leading it to near-death experiences in the early 90s and during the GFC, has completed only one project since its latest comeback.
Grant Thornton says it understands that without the Waterpoint deal going ahead, there will be a negative impact on the company’s listing status and ultimately its shareholders.
Not that the shareholders have had much to crow about since the latest revival started.
The shares are almost unsaleable and last sold at 3c, giving the company a market value of $4.5 million or so.