Wednesday, January 19

Dipula partners with Resilient in R1bn deal


Dipula Income Fund, the South African-focused real estate investment trust (Reit), announced on Friday its plans to partner with Resilient Reit Limited (Resilient) in a rand 1 billion transaction that will see Dipula optimize its capital structure and benefit from Resilient’s retail property and trading experience.

Read more about Moneyweb’s articles on Dipula here.

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Dipula CEO Izak Petersen said: “The transaction provides an elegant solution to simplify our capital structure that has frustrated Dipula’s growth and fair value rating for several years.

“Additionally, the transaction further strengthens our retail portfolio of municipal, rural and convenience shopping centers, and we look forward to continuing to work closely with the Resilient team to unlock value for our shareholders.”

According to the group’s statement, Dipula currently has a dual shareholding structure with A and B shares. A shares have a preferential right to any distribution that grows annually at the lower of the IPC or 5%, while B shareholders receive the balance of distributable net income, causing the B shares to continuously trade at a large discount to the NAV.

The investment proposed by Resilient provides that Dipula will offer to buy back all Dipula A shares issued to shareholders, through a combination of cash or through an exchange of shares for Dipula B shares.

Read more Moneyweb articles on resilient here.

“In terms of the proposal, Dipula will offer shareholders A R6.61 per share, subject to the prorated adjustment of the election so that the total cash payable equals approximately R600 million. Shareholders A will receive two Dipula B shares per A share for the remainder of their A shares, ”he said in a statement.

Resilient’s proposed investment also includes Dipula’s co-ownership of Circus Triangle Mall, a 34,489m² shopping center located in central Mthatha, anchored by Shoprite, Game and Woolworths.

Dipula said that once the proposal is implemented, Resilient will make a significant investment in his company and will also have the right to appoint a representative to the board of directors.

Des de Beer, Resilient CEO commented: “Dipula has a strong leadership team with great prospects that we want to endorse and support to help drive shareholder value creation.

“We anticipate co-ownership of suitable retail assets with Dipula, and will continue to support the company in playing a leadership role in listed real estate, once its capital structure has been simplified.”

Dipula says it will issue more market updates once it has resolved to go ahead with the proposal and once the deals have been concluded.

Palesa Mofokeng is a Moneyweb intern.


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