Delta eyes black ma­jor­ity share­hold­ing sta­tus

DeltA-ownefi Dy­il­fi­ings per prov­ince

CityPress - - Business - LE­SETJA MALOPE le­setja.malope@city­press.co.za

Prop­erty in­vest­ment trust Delta Prop­erty Fund is cross­ing its fin­gers that the en­vis­aged exit of its big­gest sole share­holder, Re­de­fine Prop­er­ties, will usher in an op­por­tu­nity to in­crease its black own­er­ship to the ma­jor­ity.

Delta CEO Sandile Nomvete said this week that the planned dis­posal by Re­de­fine of its 22.8% stake in Delta might lead to the board buy­ing back the shares or a fe­male-led con­sor­tium ac­quir­ing them. He said there was an agree­ment with Re­de­fine to avoid shares end­ing up in the hands of its com­pe­ti­tion.

“There was al­ways a pre-emp­tive agree­ment in the Re­de­fine trans­ac­tion that the Delta board would ob­vi­ously look to buy back the shares from Re­de­fine or place them with Deltafriendly share­hold­ers.”

Nomvete said the com­pany was mon­i­tor­ing de­vel­op­ments in govern­ment to “make sure there are no ma­jor pol­icy shifts that may catch us by sur­prise”.

He said the com­pany was look­ing into de­ploy­ing sig­nif­i­cant cap­i­tal, not to buy out share­hold­ers, but to di­rect it into a BEE trans­ac­tion, and the com­bi­na­tion of the two trans­ac­tions should in­crease Source: Delta Prop­erty Fund black share­hold­ing to over 50%.

“We will be one of the few com­pa­nies on the JSE with at least 51% black own­er­ship, if the share­hold­ers of Delta ap­prove it,” Nomvete said.

Asked if the com­pany had any im­me­di­ate plans to de­crease its re­liance on govern­ment leases, which form 76.4% of its in­come, he said: “Con­trary to pop­u­lar be­lief, govern­ment is a very sta­ble ten­ant and they do pay very well IS­ABELLA MAAKE, Graph­ics24 in terms of meet­ing their obli­ga­tions.”

The com­pany listed in Septem­ber 2012, has 112 build­ings across the coun­try and its lat­est share­holder pro­file in­cludes Corona­tion Fund Man­agers, the Pub­lic In­vest­ment Cor­po­ra­tion, San­lam In­vest­ment Man­age­ment, Stan­lib As­set Man­age­ment, Kag­iso As­set Man­age­ment and In­vestec As­set Man­age­ment.

The com­pany’s chief op­er­at­ing of­fi­cer, Otis Tsha­bal­ala, said the firm had a North West 2 mo­nop­oly in Pre­to­ria’s govern­ment precinct, with a 7% va­cancy rate across 10 ma­jor build­ings.

Ac­cord­ing to Re­de­fine CEO An­drew König, the sell­ing of its stake in Delta, worth more than R1.3 bil­lion, had noth­ing to do with the po­lit­i­cal ex­po­sure or pos­si­ble pol­icy un­cer­tain­ties Delta may be ex­posed to, but is part of its strat­egy to exit all lo­cally listed se­cu­ri­ties.

“The hold­ing in Delta was ac­quired Lim­popo GA2teng u9 Free StAte 17 EAstern CApe u Mp2mAlAngA 1u KwAZ2l2-NAtAl 19 through the sale of a govern­ment ten­anted of­fice port­fo­lio. As such, the stake in Delta is not strate­gic for Re­de­fine. The Delta dis­posal com­pletes the process of ex­it­ing lo­cal listed se­cu­ri­ties and re­cy­cling the cap­i­tal into di­rectly held lo­cal prop­erty as­sets,” König said, and pointed out that the de­ci­sion was made ear­lier in the year as part of sim­pli­fy­ing the lo­cal as­set prop­erty port­fo­lio.

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