Property Flash


January 22 2024

A proposed scheme of arrangement between JSE-listed Fortress Real Estate Investments and its shareholders has received the requisite level of support.

Fortress is a landlord which owns industrial logistics and commuter retail properties.

The company’s shareholders approved the scheme which will see Fortress’ dual capital structure being simplified into a single class of ordinary shares through the repurchasing and cancelling of all Fortress B-shares (FFB) in issue in exchange for shares of east European group, NEPI Rockcastle at a share-swap ratio of 0.060207 NEPI Rockcastle shares per FFB share. Once implemented, there will be a single class of ordinary share with no impediments to the declaration of distributions.

This process has taken more than a year.

“We are grateful to our shareholders for their overwhelming support of the proposed transaction to simplify our capital structure,” said Fortress CEO, Steven Brown.

“While our shareholding in NEPI Rockcastle will reduce, we will remain their largest shareholder with an investment of circa R13bn in a high-quality, offshore business which remains a powerhouse in Central and Eastern Europe. The scheme of arrangement has truly been a collaborative effort between shareholders and Fortress in collectively finding a suitable solution to a complex structure,” he said.

A single share structure will allow for distribution of income at the discretion of Fortress’ board and dividend reinvestment programmes can be implemented. A single-share structure offers greater flexibility regarding corporate actions and allows Fortress management to focus on the business rather than on issues resulting from a dual share structure. In addition, shareholders will benefit from greater liquidity in a single share rather than having share liquidity spread across the two different classes, making it appealing to a broader range of potential investors.

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