Johannesburg - A rescue plan to prevent Sharemax investors in The Villa and Zambezi Retail, two large shopping centres to the east of Pretoria, losing a large part of their investments is on the table – and has been accepted by Sharemax.
The white knight is Capicol, the developer of the two centres, which is doing the development on a contract basis for Sharemax.
The new proposal is that Capicol severs all ties with Sharemax, that Sharemax walks away from the projects, and that Capicol goes ahead with them – which at this point belong to it anyway – on its own.
Capicol will give investors certain guarantees to return their money and even pay them a small interest rate.
This plan is however subject to Capicol finding the necessary finance to finish The Villa, which is 50% complete.
Between R1.15bn and R1.2bn is required to do so.
Capicol’s attorney Bert Smith said various parties, including banks and pension funds, have indicated interest in financing the project.
The proposal also has to be approved by the investors in the two companies.
At this stage this is the only saving option for investors in The Villa, in particular, because none of the other parties negotiating rescue plans with Sharemax is interested in The Villa.
If the centre is not completed, the R1.65bn that investors have already put into the scheme would probably be down the drain.
Last month Sharemax failed to pay investors in The Villa and Zambezi Retail their interest, and warned in a circular that this would be the situation for months ahead.
Zambezi Retail is already complete, but the property has not yet, as agreed in the contract between Sharemax and Capicol, been transferred to investors in the scheme.
In brief, the plan is to combine Zambezi Retail and The Villa into a single company to be known as Capicol 1, and that Capicol shareholders pledge their shares in this company to investors as security. Investors can then take over the company with its centres if they fail to receive their money.
A bond over both properties will also be registered in favour of the builders of the two projects.
It is also expected that, as soon as finance is obtained, investors will receive a monthly return, but this will be considerably less than the pre-tax 12% promised in the prospectuses.
- Sake24
The white knight is Capicol, the developer of the two centres, which is doing the development on a contract basis for Sharemax.
The new proposal is that Capicol severs all ties with Sharemax, that Sharemax walks away from the projects, and that Capicol goes ahead with them – which at this point belong to it anyway – on its own.
Capicol will give investors certain guarantees to return their money and even pay them a small interest rate.
This plan is however subject to Capicol finding the necessary finance to finish The Villa, which is 50% complete.
Between R1.15bn and R1.2bn is required to do so.
Capicol’s attorney Bert Smith said various parties, including banks and pension funds, have indicated interest in financing the project.
The proposal also has to be approved by the investors in the two companies.
At this stage this is the only saving option for investors in The Villa, in particular, because none of the other parties negotiating rescue plans with Sharemax is interested in The Villa.
If the centre is not completed, the R1.65bn that investors have already put into the scheme would probably be down the drain.
Last month Sharemax failed to pay investors in The Villa and Zambezi Retail their interest, and warned in a circular that this would be the situation for months ahead.
Zambezi Retail is already complete, but the property has not yet, as agreed in the contract between Sharemax and Capicol, been transferred to investors in the scheme.
In brief, the plan is to combine Zambezi Retail and The Villa into a single company to be known as Capicol 1, and that Capicol shareholders pledge their shares in this company to investors as security. Investors can then take over the company with its centres if they fail to receive their money.
A bond over both properties will also be registered in favour of the builders of the two projects.
It is also expected that, as soon as finance is obtained, investors will receive a monthly return, but this will be considerably less than the pre-tax 12% promised in the prospectuses.
- Sake24