Struggling property groups planning on merging
CAPE TOWN - Struggling property groups, the state-focused landlord Delta Property Fund and Rebosis Property Fund, plan to merge.
The groups’ boards said yesterday they were well respected Real Estate Investment Trusts with a focus on retail and commercial property in South Africa and a merger would represent a natural consolidation of the parties' shared vision and strategy, and would be beneficial in unlocking value for shareholders.
A merger would provide scale and diversification in the sector through consolidation of their balance sheets, enhance their relationship with the Department of Public Works and the government, and provide scale for the restructuring of their ba;lance sheets.
It would help in the management of loan-to-value ratio to an optimal level, reduce capital costs through credit profile enhancement, and bolster tradeability and improve liquidity for shareholders.
Due dilligences needed be conducted, details to finslise the transaction structure, decisions around the new management team and board needed to be taken, and further announcements would be made.