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Cape Town - Heavily geared investment group Cape Empowerment Trust (CET) confirmed on Wednesday that it had sold its holding in Ambit Properties to property loan stock company ApexHi.
CET's 110m Ambit linked units held through BVI 1232 (a special purpose vehicle) have effectively been sold to Apex-Hi for 340c/linked unit. The Ambit distribution of 19.2c/linked unit - due in December - will still accrue to CET.
ApexHi now joins its corporate cousin Redefine (in the Madison stable) and Absa as the main shareholders in Ambit.
CET said the extreme volatility in local and world equity markets created an environment in which the directors believed prudent steps needed to be taken to de-risk the company's balance sheet.
"After careful consideration, the board has decided that the transaction is the most appropriate way to achieve this de-risking and to significantly strengthen the group's balance sheet and cash position."
CET - through BVI 1232 - held debt of R343m. BVI also held a R94m loan from CET.
CET argued that after the ApexHi deal, the group would be "under-geared and in an excellent position" to focus on growing its remaining property and service businesses.
Initially CET wanted to sell off its stake in gaming investment company Grand Parade Investments (GPI) to cull its debt.
CET confirmed on Wednesday that the sale of the GPI stake was no longer being considered. CET's other interests include significant minority stakes in listed counters Purple Capital and Command Holdings as well as in unlisted services businesses.
The market, however, seemed uncertain about the Ambit transaction with CET shares trading in a wide range between 39c to 59c in thin volumes.
- Fin24.com
