CAPE TOWN - The Public Investment Corporation (PIC) has increased its shareholding in Texton Property Fund from 5.2 to 18.9percent, making it the largest shareholder in the JSE-listed real estate investment trust (Reit).

Texton chief executive Marius Muller said yesterday that the PIC’s increased shareholding followed the transfer of shares formerly held by Texton Broad-Based Empowerment (RF) after the empowerment entity defaulted on its loan.

Muller said Texton had made “pleasing advances with several initiatives” that would place the company on a better footing in the future.

“We know the road ahead isn't going to be easy, given the amount of work that needs to be done around entrenching both sound business practices and critical property basics within the company,” Muller said. “We're constantly challenging ourselves to find the best solutions to move Texton forward, and remain firmly committed to turning the ship around despite the economic environment being unsupportive and weak property fundamentals.”

Texton’s total property assets were valued at R5.2billion in December with 61.8percent in South Africa and 38.2percent in the UK.

The Reit invests in assets ranging from offices, industrial and logistics facilities to retail properties.

In December shareholders voted against the repurchase of shares in terms of a put option relating to the 2014 empowerment deal.

The group said the high turnout at the general meeting saw active shareholders voting against the repurchase of the RF shares.

The meeting was called after a loan default occurred when the minimum share cover ratio was breached as Texton’s share price remained lower than the original issue price. Then, in August and September 2018, the PIC gave notice that it was exercising the put option.

The put option repurchase price had equated to R12.90 per Texton share, which had represented a premium of approximately 215percent to the market price.

Texton Property shares closed 0.93percent lower at R4.25 on the JSE yesterday.

BUSINESS REPORT