Battle looms as Delta eyes Ortho­touch as­sets

CityPress - - Business - Moyagabo Maake – – Bloomberg

A battle is brew­ing over the Delta Prop­erty Fund’s agree­ment to ac­quire some of the prop­er­ties owned by Ortho­touch in a deal val­ued at more than R500 mil­lion.

The deal, an­nounced on Tues­day, will see the real es­tate in­vest­ment trust buy the prop­erty man­age­ment com­pany’s as­sets in the Free State and Mpumalanga for R507 mil­lion, gar­nered in debt and shares. The trans­ac­tion is ex­pected to come into ef­fect in Au­gust.

In­vestors did not like news of the agree­ment, send­ing Delta’s stock tum­bling 1.12% on the JSE on the day. It fell a fur­ther 0.57% on Thurs­day.

Ortho­touch, headed by Nic Ge­or­giou, is fac­ing lit­i­ga­tion from in­vestors, who sank R4.6 bil­lion into prop­erty syn­di­cate com­pa­nies – High­veld Syn­di­ca­tion 15 to 22 – cre­ated around some of the com­pany’s as­sets.

At­tor­neys act­ing on be­half of High­veld’s share­hold­ers have ap­proached the courts to cer­tify class ac­tions for more than 9 000 in­vestors in eight of the syn­di­cate com­pa­nies, who claim Ge­or­giou did not trans­fer any prop­erty listed in the syn­di­cates’ share prospec­tuses to the in­vest­ment ve­hi­cles. This, they claim, was de­spite re­ceiv­ing the full amount from in­vestors.

In 2011, all of the syn­di­cate com­pa­nies – ex­clud­ing High­veld 19, which was liq­ui­dated – were placed into busi­ness res­cue, with prop­er­ties be­long­ing to three of the syn­di­cates trans­ferred to Ortho­touch.The res­cue plan saw Ortho­touch buy­ing 78 of the syn­di­cates’ prop­er­ties for a com­bined R5.2 bil­lion.

Ma­rina Ver­does of Theron & Part­ners, at­tor­neys for a group of in­vestors, said: “If any ac­tions by Ortho­touch in­fringe upon the rights of the High­veld Syn­di­ca­tion in­vestors for whom we act, the nec­es­sary legal ac­tion will be taken.”

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