Re­de­fine to the res­cue?

Third time lucky for sale of prop­erty book

Finweek English Edition - - Companies & Markets - MARC HASENFUSS march@fin­

PRE­SUM­ABLY TRANS­PORT con­glom­er­ate Su­per Group may not have headed down the rights of­fer road if its prop­erty port­fo­lio – es­ti­mated at around R900m – had at­tracted a buyer. Last month Su­per Group – which has en­dured per­sis­tent scep­ti­cism with re­gard to its high gear­ing – an­nounced a R750m rights of­fer pitched at 400c/share in a bid to re­tire bur­den­some debt.

It would seem likely that Su­per Group would only raise around R500m – the amount over which in­sti­tu­tional share­hold­ers such as Al­lan Gray and the PIC have given ir­rev­o­ca­ble un­der­tak­ings.

But maybe a wind­fall from a prop­erty sale could help things along… Ear­lier this year Su­per Group pro­posed the sale of its R900m prop­erty port­fo­lio in a bid to cash in on ro­bust prop­erty prices and to slash debt lev­els. Re­cently listed SA Reit was ini­tially named as the buyer for Su­per Group’s prop­er­ties. How­ever, that deal fell away as the prop­erty mar­ket waned and fi­nanc­ing be­came tighter.

A few weeks ago Fin­week re­ported that Aus­tralian-based Mac­quarie had emerged as a buyer for Su­per Group’s Su­per Park prop­erty (which com­prises the bulk of its prop­erty port­fo­lio). Ap­par­ently the deal with Mac­quarie was at an ad­vanced stage when it was also called off.

Nat­u­rally, the in­dus­trial and com­mer­cial prop­erty mar­ket – de­spite a few pos­i­tive signs over the past fort­night – has weak­ened con­sid­er­ably since Su­per Group first an­nounced its in­ten­tion to sell off its real es­tate. Whether it will fetch any­thing close to R900m for its prop­erty book is de­bat­able, al­though Fin­week hears that listed prop­erty group Re­de­fine has taken a close look at Su­per Park.

Per­haps if Su­per Group can clinch a trans­ac­tion to off­load its prop­erty port­fo­lio over the next few weeks, it will con­vince more mi­nor­ity share­hold­ers to sup­port its rights of­fer. Sev­eral com­men­ta­tors have al­ready voiced their con­cerns about the prospects for Su­per Group af­ter a par­tic­u­larly bad trad­ing up­date last month, plus an ad­mis­sion that fraud had been un­cov­ered at one of the com­pany’s di­vi­sions.

Share­holder ac­tivist Theo Botha, a long­time critic of Su­per Group, asked how sure share­hold­ers are that R700m of new fund­ing was all Su­per Group needed to get back on track. “Have they re­ally got their house in or­der? They need to present a com­pre­hen­sive plan to in­vestors.”

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