JOHANNESBURG - Arrowhead, the listed property fund with a diverse portfolio valued at R5.6billion and interests in four other listed funds, plans to sell its entire 10.6percent shareholding in Dipula Income Fund.
Arrowhead chief executive Mark Kaplan said yesterday that the group also planned to sell about 10 non-core properties valued at about R600million and was considering ways to extract value from its 18.6percent interest in listed Rebosis.
But Kaplan stressed that Arrowhead was not in a rush to sell their Dipula stake and did not have any need for the cash from the sale, which they expected to use to reduce debt.
“We would only be selling on the basis that we got a satisfactory price and it would not hurt earning going forward. Our Dipula stake has done very well. Our average cost was around R7.58 (a share) and we have got good dividends on it,” he said. Kaplan confirmed they would look to sell the entire shareholding in Dipula, but it might be sold “in chunks”.
He stressed that Arrowhead would “for now” hold its Rebosis stake.
Kaplan said that they had sold one of the 10 non-core properties after the end of the six months to March, but there was not any fixed time period in which they wanted to sell the remaining properties and they were “not stressed sales”.
He said that they believed it was better to recycle the cash from these assets and many of them would be linked to development opportunities.
Kaplan said there was increased interest in these properties this year.
“We're hopeful that we will sell another few that will transfer towards the end of the financial year or into the next year. But they are not fire sales. We want to extract value from these sales,” he said.
Arrowhead yesterday reported a 6.5percent decline in dividends a share to 40.43cents in the six months to March from 43.24c in the prior period.
Kaplan said Arrowhead remained on target to deliver on the guidance provided for the full year.
In November, Arrowhead forecast a 6.5percent reduction in dividend growth for the year to September.
Arrowhead rose 1.05percent on the JSE yesterday to close at R6.71.