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Johannesburg - The financial well-being of property syndication firm Sharemax fell under the microscope again on Thursday after Capicol - the developer of Sharemax's latest two projects - said it had cut ties with the business.
Capicol said at a media briefing it would approach independent financial backers to complete the The Villa in the east of Pretoria as Sharemax was unable to foot the bill.
According to Capicol, Sharemax's funds have slowly dried up, resulting in Capicol cancelling its agreement to cede ownership of The Villa and the Zambezi Retail Park to Sharemax.
Speculation was rife that Sharemax was a house of cards ready to collapse when investors in the syndication – mostly pensioners - were not paid their monthly interest or dividends in September.
According to Capicol, this is due to the extent of Sharemax's financial problems.
"The agreed interest inflows should only have dried up in December, when The Villa was scheduled for opening," said Capicol director Paul Kyriacou. "We paid Sharemax, and they paid investors."
Kyriacou said the group will need an injection in the form of a R756m bond to resume dividend payments to investors in The Villa and Zambezi Retail.
These backers were promised a yield of about 12%, substantially higher than the average 7.7% the listed property sector can offer.
Sharemax backers to have their say
According to Capicol's calculations, The Villa in three years' time will be able to cover the financier's costs and refund the investors and any losses made by Capicol in its dealings with Sharemax.
However, this projection assumes inflation rates and property values increase. This deal, Kyriacou said, is subject to Sharemax investors' approval.
"We want to give investors a chance to turn this around," he said.
The group is confident it will be able to attract financing for the unfinished The Villa. The shopping behemoth is 70% tenanted and very bankable, the group said.
The rate of R233 per square meter - which is on par with what tenants at the established Canal Walk are paying - is realistic, Kyriacou said.
Sharemax, which was recently informed by the Reserve Bank that it had collected money from investors in an illegal manner, announced last week that it wanted to sell all the properties in its investment portfolio to listed property group Bonatla Property Holdings for R5bn. Bonatla has since announced neither The Villa nor Zambezi Retail will form part of a deal.
"We're getting up to 200 calls a day from investors and brokers who don't know what is going on," said Kyriacou. "We don't want people to panic – we'll give the shareholders a choice to approve this deal, and a chance to turn this investment around."
- Fin24.com
Capicol said at a media briefing it would approach independent financial backers to complete the The Villa in the east of Pretoria as Sharemax was unable to foot the bill.
According to Capicol, Sharemax's funds have slowly dried up, resulting in Capicol cancelling its agreement to cede ownership of The Villa and the Zambezi Retail Park to Sharemax.
Speculation was rife that Sharemax was a house of cards ready to collapse when investors in the syndication – mostly pensioners - were not paid their monthly interest or dividends in September.
According to Capicol, this is due to the extent of Sharemax's financial problems.
"The agreed interest inflows should only have dried up in December, when The Villa was scheduled for opening," said Capicol director Paul Kyriacou. "We paid Sharemax, and they paid investors."
Kyriacou said the group will need an injection in the form of a R756m bond to resume dividend payments to investors in The Villa and Zambezi Retail.
These backers were promised a yield of about 12%, substantially higher than the average 7.7% the listed property sector can offer.
Sharemax backers to have their say
According to Capicol's calculations, The Villa in three years' time will be able to cover the financier's costs and refund the investors and any losses made by Capicol in its dealings with Sharemax.
However, this projection assumes inflation rates and property values increase. This deal, Kyriacou said, is subject to Sharemax investors' approval.
"We want to give investors a chance to turn this around," he said.
The group is confident it will be able to attract financing for the unfinished The Villa. The shopping behemoth is 70% tenanted and very bankable, the group said.
The rate of R233 per square meter - which is on par with what tenants at the established Canal Walk are paying - is realistic, Kyriacou said.
Sharemax, which was recently informed by the Reserve Bank that it had collected money from investors in an illegal manner, announced last week that it wanted to sell all the properties in its investment portfolio to listed property group Bonatla Property Holdings for R5bn. Bonatla has since announced neither The Villa nor Zambezi Retail will form part of a deal.
"We're getting up to 200 calls a day from investors and brokers who don't know what is going on," said Kyriacou. "We don't want people to panic – we'll give the shareholders a choice to approve this deal, and a chance to turn this investment around."
- Fin24.com
