Is important information not being disclosed?
THE DEVELOPER of the large new shopping centre called The Villa, east of Pretoria, that’s being written about so much these days apparently seems to be trying to sell an interest of at least 30% in the development. The promoter of the centre – Sharemax, which has already collected around R1,5bn from the public buying into the centre – is involved in several media advertisements trying to quench the flames arising from the dissatisfaction of the SA Reserve Bank, which feels it’s violating legislation governing deposit-taking organisations.
To placate the Reserve Bank, Sharemax has meanwhile changed its business model slightly: instead of linked units consisting of a microscopic share and a debenture, it’s now offering the public a share with no par value at a large premium.
While the investing public is awaiting the outcome of the dispute between the Reserve Bank and Sharemax, Nicolas Constantinou sent a memo (printed here) about selling The Villa to a property fund listed in Luxembourg. We’re not mentioning the name of the fund.
Constantinou gives the selling price in the order of R45 000/sq m, which sounds a bit expensive for SA. The 180 tenants are almost all international businesses that don’t mind making a loss in SA, because their other profits will make up for the rental, Constantinou says. Finally, he claims other developers, specifically in Pretoria, don’t have the courage to tackle such projects.
However, the Atterbury Group is busy with a very large development near the new Lynnwood off-ramp, a far better site than The Villa on the Delmas Road. Slightly north of that, the Sasol pension fund is busy enlarging one of its great winners – the Kolonnade centre, near the Montana area – for the umpteenth time.
In his memo, Constantinou says the money for the purchase could simply be deposited directly into Capicol’s bank account – not into that of Sharemax (the promoter).
In its extensive advertising campaign over the past two weeks – and also in its new prospectuses in the name of The Villa Retail Park Holdings 2 Ltd – Share- max makes no mention of Constantinou’s mandate to sell a 30% interest in The Villa to other parties. Does Sharemax not know about this, or is it important information not being disclosed to investors?