Johannesburg - Balwin Properties aims to raise up to R1.6 billion through a private placement ahead of its listing on the real estate holding and development sector of the JSE’s main board on October 15.
The placement is subject to a minimum of R713.5 million being raised from qualifying investors and the placement of a sufficient number of shares to meet the minimum free float and shareholder spread requirements prescribed by the JSE for a listing company.
The offer of new ordinary shares priced between R8.51 and R9.88 a share to qualifying investors opened last week and closes on Thursday.
Up to 83.8 million shares will be available for subscription by qualifying investors and, subject to sufficient interest from qualifying investors, the sale of up to 82.9 million shares by existing shareholders.
Added capacity
The offer represents 32.85 percent of Balwin’s issued share capital. Balwin is 70 percent owned by management and 30 percent by private equity partner Buffet Investments.
The founding directors will remain the largest shareholder group post listing.
The company will have a market capitalisation on listing of between R4.2bn and R4.7bn.
The proceeds from the listing will be used to settle existing debt facilities and provide Balwin with added balance sheet capacity for future development activities and land acquisitions.
Balwin is one of South Africa’s largest homebuilders focusing on large-scale sectional title residential estates in high-growth, high-density metropolitan nodes in major cities. It has confirmed that it is negotiating to acquire additional land parcels for 15 000 units in Kyalami, Johannesburg. This is in addition to the company’s existing secured development pipeline of about 17 028 residential units to be built over the next about eight years.
Stephen Brookes, the chief executive and founder of Balwin, said on Friday that they were progressing with the listing to enhance the company’s public profile, provide improved access to capital and support its overall growth objectives.
“The listing also offers the opportunity for new investors to participate in the long-term growth of Balwin as we deliver on our eight-year secured pipeline of residential developments,” he said.
Brookes said Balwin was differentiated from other JSE-listed property entities or real estate investment trusts (Reits) because its business strategy was underpinned by the generation of profits through the development and sale of large-scale residential estates averaging between 500 and 1 000 units and offering secure, affordable and high-quality two and three bedroom apartments.
According to Balwin’s prelisting statement, it currently develops and sells between 1 750 and 2 000 sectional title units a year.
BUSINESS REPORT