File picture: James White

JOHANNESBURG – Property company Octodec Investments said on Tuesday it had agreed to a rental reduction of approximately R11 million for retailer Edcon for two years starting on April 1 and would receive equity in lieu of it.

It said the value of the equity was uncertain at this stage.

Financially troubled Edcon said earlier this month it had secured R2.7 billion in new cash and rent deductions as part of a recapitalisation plan, a development expected to save thousands of jobs.

On Tuesday Octodec said as at August 2018 its exposure to Edcon amounted to 0.9 percent of its total gross lettable area and 1.2 percent of rental income. 

As a result of the restructuring, its total exposure to Edcon was expected to ease to 0.6 percent of a gross lettable area for the year ending August 2019.

"The impact of the Edcon restructure on Octodec's distributable income for the financial year ending 31 August 2019 is not material (R2.2 million or 0.4 percent of distributable income)," it added.

African News Agency (ANA)