SOUTH AFRICA – Redefine Properties, a diversified real estate investment trusts, has concluded a deal for global private investment firm Starwood Capital Group to acquire its 111.9 million shares in UK-based RDI REIT for 95 pence (US$1.18) per share.
The deal represents a 20.9 percent premium to the ruling share price. The disposal, which would generate Redefine US$119.9 million (around R2.3 billion), formed part of Refine’s plans to strengthen its balance sheet to offset the ongoing uncertainty and negative effects of the Covid-19 pandemic.
A portion of Redefine’s investment in RDI was encumbered by an exchangeable bond issued in September 2016, so Redefine made a tender offer to the holders of the outstanding US$169 million 1.5 percent Secured Exchangeable Bonds, due September 2021, exchangeable into the ordinary shares of RDI, of which US$132.2m (R2.1bn) were presently outstanding.
Undertakings from bondholders in support of the tender offer totalling 77.1 percent of the amount outstanding had been received.
Redefine financial director Leon Kok said that the disposal of the RDI shares and the settlement of the bonds would reduce Redefine’s loan-to-value ratio by 1.1 percent.
Redefine chief executive Andrew Konig said the exit out of RDI substantially advanced Redefine’s intention of simplifying and solidifying its asset platform, as well as eliminating multiple entry points for South African equity investors into the same investment opportunities.
Furthermore, it also improved the company’s risk profile through eliminating a risk universe over which it has no direct management influence.
Konig said the strategy to strengthen its balance sheet, recycle non-core assets and boost liquidity continued to place the company in a strong position to withstand the risks and challenges of the current uncertain operating environment.
“In the prevailing environment, the knowns are outweighed by evolving unknowns. Our intention is to ensure we can manage the variables under our control while being extremely well placed to benefit once conditions improve,” said Konig.
Redefine Properties is one of South Africa’s leading diversified real estate investment trusts (REIT), owning and managing a portfolio of revenue generating retail, office and industrial assets in South Africa and internationally.
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