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Johannesburg - Investors in Sharemax's property syndicates could this week for the first time get an independent look at the condition of the companies in which they invested their money.
The 15 days that Bonatla Property Holdings [JSE:BNT] received to conduct a due diligence into the operations of the 39 property companies in the Sharemax stable expires this week.
Bonatla CEO Niki Vontas solemnly undertook to email Sake24 if he came upon any irregularities.
Bonatla received the right to investigate the syndications after Sharemax's board accepted Bonatla's offer to buy the property companies in the Sharemax group for R4.95bn.
The offer is still subject to the approval of investors in the different companies.
The due diligence investigation has encountered hiccups because Sharemax neglected to make available several documents to which Bonatla was entitled in terms of the contract between the two groups.
The results of the due diligence will indicate not only whether something is out of place somewhere, it will also give investors an different idea of the worth of the syndication property.
This could prove interesting because various analysts reckon Sharemax has inflated the value of these properties.
The purchase price in the original announcement of the offer was based on the syndication value of all the properties.
The final price that will be offered to each of the companies will be determined by discounting the revenue streams that each of the properties offer against yield.
According to Vontas it's already evident that many of the properties are not offering revenue streams that make an offer worthwhile.
Also, Bonatla cannot make offers for the companies in which investors in Zambezi Retail and The Villa have invested, because the Sharemax companies do not physically own the properties in which investors have invested.
Capicol, the contractor that is developing the two centres for Sharemax, owns the properties. This week Capicol entered into an agreement with Sharemax in terms of which it will go ahead with the two centres on its own. Investors in the centres no longer receive interest, but Capicol has promised to resume paying them an income if it gets R1.15bn in funding to complete The Villa.
Vontas said investors in the other schemes should not expect too much. There are about 15 centres that are doing fairly well, to whose shareholders Bonatla shares could be offered.
- Sake24.com
