Delta CEO and CFO resign
• Move will enable investor Cornwall Crescent to bring in new leadership at black-owned fund
Shares in property group Delta jumped 7% after the company said its CEO and CFO have resigned with immediate effect. Delta founder Sandile Nomvete and CFO Shaneel Maharaj have resigned with immediate effect to enable shareholder Cornwall Crescent to bring in new leadership.
Shares in property group Delta jumped 7% after the company said its CEO and CFO have resigned with immediate effect.
Delta founder Sandile Nomvete and CFO Shaneel Maharaj have resigned to enable shareholder Cornwall Crescent, a BEE consortium that owns 26% of the property fund, to bring in new leadership.
Cornwall had previously criticised Delta for trying to merge with Rebosis Property Fund in 2019, saying Rebosis would not bring enough rewards for Delta’s shareholders. The deal was abandoned in March. Cornwall said at the time
Delta’s focus needed to be on strengthening the balance sheet and lowering gearing.
Phumzile Langeni, Delta’s non-executive deputy chair, said Delta needed fresh ideas to unlock value for shareholders.
“Cornwall Crescent, a black women’s empowerment consortium and one of the largest shareholders in Delta Property Fund, has for some time been engaging with shareholders of Delta on ways to best unlock growth in the company,” she said.
“This proposed new way forward has gained significant shareholder support and has led to some recent changes on the board. Subsequently, the executive management team decided to step down,” Langeni said.
Nomvete and Rebosis CEO Sisa Ngebulana had wanted to merge their funds to create a mid-sized property group with R29bn in assets.
On Monday, Delta announced that in addition to Nomvete and Maharaj’s departure, COO Otis Tshabalala would be leaving with immediate effect, after electing not to complete his notice period.
Tshabalala, once touted as a possible successor to Nomvete at Delta, has joined SA Corporate Real Estate as its COO.
Nomvete listed Delta Property Fund, which makes more than 80% of its annual revenue from government-tenanted properties, in 2012. It owns a portfolio of properties worth R11.3bn, comprising 81 office properties tenanted by government departments.
Rebosis also owns some government-tenanted buildings as well as malls.
Delta has been through a rough patch in recent years. Between 2016 and 2019, its state tenants were reluctant to sign new leases and when they did, they did so at terms shorter than a year, Nomvete said. This cost the government about R3bn as they would have got the new leases at lower rentals because of market averages.
But in recent months, the department of public works, in particular, managed to raise its game and Delta had a record year for the number of leases signed in the year to the end of February 2020.
Nomvete said in June his firm would rise again once it got through the Covid-19 pandemic.
Bongi Masinga, a non-executive director, has been appointed as acting CEO and Marelise de Lange, an independent nonexecutive director, has been appointed as interim CFO, with immediate effect.
Masinga is an experienced executive and non-executive director who holds a number of directorships in listed and unlisted companies.
She is a co-founder and CEO of Afropulse Group, an investment and advisory business.
“The board will update shareholders on the appointment of suitable replacements for the above positions in due course,” Delta said.
The company’s share price closed 44c higher, giving it a market capitalisation of R314m. The share has lost 38% so far in 2020.