• The mp3 revolution

    Ian Mann takes a look at the war between digital music and the compact disc.

  • Don't take us for fools

    It's time for businesses to stop thinking consumers are gullible, says Mandi Smallhorne.

  • Losing the plot

    Parastatal leaders have lost focus of what they're supposed to do, says Nonkululeko Gobodo.

All data is delayed
See More

Redefine restructures VBG portfolio

Aug 03 2012 10:48
I-Net Bridge

Johannesburg - Redefine International (RIN)‚ the diversified income focused property company‚ has agreed terms to restructure all four VBG assets and the associated financing facilities.

This will result in the company owning a 50% interest in the VBG assets together with a major pension fund as its joint venture partner‚ it said on Friday.

As part of the restructuring‚ Redefine has agreed to sell‚ for a nominal amount‚ 50% of its interest in the VBG holding company to a major pension fund.

The VBG assets comprise four individual office properties situated in Berlin‚ Dresden‚ Cologne and Stuttgart in Germany‚ all of which are currently let to a German government-backed social insurance body.

This newly established joint venture company‚ together with certain of its subsidiaries‚ has reached agreement with the servicer of the VBG facilities to dispose of the VBG assets to new subsidiary companies within the joint venture vehicle. The proceeds from the disposal of approximately €80.0m will be used to settle the original VBG facilities in full. The facilities have a current outstanding balance of €117.3m.

The gross acquisition cost of approximately €84.9m will be partly funded by the joint venture company with a new five year €57m debt facility secured from a German bank‚ with both joint venture partners injecting €14m for their 50% interests.

The new debt facility has been secured at a margin of 1.72% p.a. which‚ together with current five year swap rates‚ provides an indicative all in rate of 2.8% p.a. This will result in an initial yield on equity in excess of 19% on the group´s investment.

The restructuring process is expected to complete shortly after the company´s financial year end on 31 August 2012.

The leases have unexpired terms of between 7.8 years and 12.6 years and are indexed to 100% of German CPI. The VBG portfolio has a current rent roll of €7.6m p.a.

Redefine has now restructured or repaid €139.9m of legacy financing facilities since its interim results‚ significantly reducing both leverage and near term refinancing requirements.

"The restructuring of the VBG portfolio is another significant milestone in successfully implementing the company's strategy of reducing the Group's leverage and exposure to short term debt maturities. The establishment of a joint venture with a major pension fund also secures an alternative source of funding and the ability to capitalise on market opportunities‚" said Greg Clarke‚ Chairman of Redefine International.

redefine international


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote