Property Flash


Rebosis Property Fund, the first black owned and managed property fund to list on the JSE back in 2011, is on its deathbed. The company which owns Hemingways Mall in East London and Baywest Shopping Centre in Port Elizabeth, has entered business rescue and is unlikely to survive.

The group which has lost around 98% of its value since 2017, is unable to manage nearly R10bn worth of debt, the majority of which is with Nedbank. Rebosis is now worth R116m, which is embarrassing for a company that at one point was worth more than R15bn by market capitalisation.

Founder and chairman Sisa Ngebulana had claimed that Rebosis could sell its office portfolio to ease the debt burden, but investors are upset and out of patience.

Ngebulana, once a flashy entrepreneur who attended results presentations in his Bentley, has recently left the public spotlight as the property fund he built, lies in tatters.

He failed in the UK when he spent R1.2bn on a controlling stake in secondary city mall owner New Frontier Properties, later selling Rebosis’ interests for R700. He blamed Brexit for New Frontier’s dismal performance but critics feel the company allocated capital poorly and that the takeover deal by Rebosis favoured Ngebulana and his associates, at the expense of New Frontier’s investors.

Rebosis announced on Friday, via the JSE’s stock exchange news service, that its board had taken a decision to enter business rescue, saying that the group was financially distressed in terms of the 2008 Companies Act. The JSE granted the company its approval for the suspension of trading in its ordinary B-shares and its A-shares with immediate effect.

This comes after the group announced in August that it would give an update on restructuring initiatives that would aid its balance sheet and unlock value in the business. But CEO Otis Tshabalala and his team have not been able to turn Rebosis around, and now it’s a matter of creditors trying to get their debts repaid by a failed property company. Rebosis’ JSE listing will also be suspended.

Rebosis’ management and board said on Friday that its six-month cash flow was vulnerable to significant risks, including the effect of a rising interest rate cycle on servicing debt costs, the inability to recover increased municipal costs from sovereign tenants and the high costs of rates and taxes levied by some municipalities.

The real estate investment trust is yet to appoint its business rescue practitioner (BRP).

Rebosis reported on Friday that its management and board had formulated a turn-around strategy, which could be incorporated by a BRP, and which was focused on two areas: addressing the group’s balance sheet constraints and ongoing operational focus on leasing alternatives to reduce vacancies and also on increasing tenant retention.

Photo: Sisa Ngebulana, supplied by Rebosis

Written by: Alistair Anderson

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