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Johannesburg - Shareholders of Emira Property Fund have overwhelmingly approved a transaction that will see 5% of the REIT’s shares in issue being held by strategic black partners.
Emira is a medium-cap diversified JSE-listed Real Estate Investment Trust (REIT) invested in office, retail and industrial properties. Its assets comprise 142 properties valued at R13.3bn. Emira is also internationally diversified through its direct interest in the Australian Securities Exchange (ASX) listed GOZ, valued at R940.4m.
Geoff Jennett, CEO of Emira, describes the BEE transaction as strategic, sustainable and commercial.
Committed to remaining invested for at least five years, Letsema Holdings and Tamela Holdings will each hold 2.5% of Emira shares through their 100% owned subsidiaries.
In total, 26 133,364 Emira shares with a market value of R364.2m - based on the 30-day volume weighted average price of Emira shares on 22 May 2017 of R13.9372 per share - will be held equally by Emira’s new partners.
“Transformation is a priority for Emira. We identified this transaction as an exciting opportunity to action our commitment to achieving the sustainable BEE ownership of Emira. Both BEE parties have the expertise, experience, relationships and credibility to make significant contributions to Emira,” said Jennett.
READ: Emira rebalancing its portfolio
Letsema is a private investment holding group focused on management consulting, third-party investment management and industrial businesses with a 21-year track record of using business as a catalyst for significant societal impact. Letsema was established by its two directors.
Majority shareholder of 57%, Isaac Shongwe is a non-executive director of Barloworld and African Phoenix Investments, and a member of the Wits University Council. Shareholder 43%, Derek Thomas, is the non-executive chair of Transpaco.
Tamela is a black-owned and managed investment holding, corporate finance advisory and fund management company founded by Sydney Mhlarhi (non-executive director of PPC and Assore) and Vusi Mahlangu (non-executive director of Emira Property Fund and Aon SA).
The shareholding in Tamela is held 65.12% by Tamela Group, 10.26% by Nedbank, 10.26% by Kagiso Tiso Holdings and 14.36% by Tshepisho Makofane. Mahlangu and Mhlarhi equally hold 50% of Tamela Group and are directors of Tamela SPV with Makofane.
“We are introducing BEE partners who are influential role players and we are confident that this transaction strengthens Emira in many ways for the benefit of all our stakeholders,” said Jennett.
Emira regards the transaction as a boost of its investment proposition and a benefit to its tenants due to an improved BEE procurement level. As an added benefit, Emira says the deal stands to strengthen its balance sheet through the issue of new shares at an undiscounted price.
The deal lowers Emira’s gearing ratio, with the subscription proceeds being deployed to decrease its interest bearing debt.
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