The founder and CEO of the JSE-listed Rebosis Property Fund, Sisa Ngebulana, has decided to retire, the group announced Monday.
“Following the announcement of the sale of R6.3 billion of 32 office assets that will restructure Rebosis’s balance sheet to an acceptable level of loan-to-value (LTV) of 42%, Dr. Sisa Ngebulana has decided to resign and retire as CEO and board effective December 1, 2021, ”it said in a Sens statement.
Read: Rebosis Announces R6.3bn Sale From Its Government Leased Office Portfolio
Rebosis noted that Ngebulana had planned the move when he took over as CEO again in 2018.
This followed the departure of former CEO Andile Mazwai, who had a brief stint in office but resigned after differences with Ngebulana and the Rebosis board. Ngebulana was the CEO of the company when it went public on the JSE in 2011.
With Ngebulana now set to step down from executive positions at Rebosis (he is still a shareholder in the company), the group also revealed that Otis Tshabalala will take over the top role from December.
Tshabalala is the outgoing Chief Operating Officer (COO) of SA Corporate Real Estate. He is also a former COO of Delta Property Fund.
His appointment as CEO of Rebosis means that Tshabalala will be required to effectively lead the completion of the group’s sale of R6.3 billion of its portfolio of government-leased office properties to Ulricraft Proprietary Limited, which is a subsidiary of Vunani Capital Partners. .
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Ngebulana, who will remain as a consultant at Rebosis for a period of six months, is likely to work with Tshabalala to finalize the deal.
“In order to ensure a smooth handover to the incumbent CEO, Dr. Ngebulana will consult with Rebosis until the end of May 2022,” the group noted in its Sens statement.
The group’s share price weakened just over 7% Monday to close at 26 cents a share following news of Ngebulana’s resignation and retirement.
His ‘retirement’ is somewhat surprising, considering that Ngebulana is in her early 50s.
However, Ngebulana also owns the privately run Billion Group, which developed the Baywest, Hemingways and Forest Hill City shopping centers that are now part of Rebosis’ retail portfolio.
Monday’s share price drop wiped out some of the gains following Friday’s announcement of the sale of its R6.3 billion office property portfolio. However, the stock was trading firm at around 27 cents as of Tuesday morning.
“The asset disposal will reduce the company’s LTV level and optimize its balance sheet in accordance with real estate investment trust standards, closing the curtain on Ngebulana’s three-year period since the board hired him to stabilize the company.” Rebosis said in a separate outlet. statement.
“Rebosis was facing a financial crisis that included write-offs of its assets in the UK, precipitated by Britain’s decision to leave the European Union. [Brexit], which caused a storm in financial markets and investments, including asset write-offs, “added the group.
“Despite its challenges, Rebosis continued to meet all of its financial obligations and generated a cash surplus, as well as successfully rolling over credit lines,” the company noted in its Sens statement.
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“The board further notes that Dr. Ngebulana helped the company successfully defend an aggressive takeover bid during this time by acquiring shares at a bidder’s premium to protect shareholder value,” he noted.
“In these changing environments, all companies face challenges. Rebosis was no exception, ”Ngebulana stated in Monday’s press release.
“It has been a privilege to lead this company for the last three years. Initially, the board gave me one year to stabilize the company when faced with financial challenges … [But] More new challenges emerged when I started, including massive asset writedowns as a result of Brexit uncertainty and local conditions, ”he added.
“I focused the team on fundamentals and operational efficiency, conserved cash resources by withholding dividends and restructuring debt during this period … As a result, the company met all of its financial obligations and generated a surplus of cash with all lines of credit renewed every year, “reiterated Ngebulana. .
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“After a long negotiation process, the sale of 32 office assets for 6.3 billion rand has been signed, subject to the fulfillment of the corresponding conditions. After the fulfillment of all the conditions, the vote of the shareholders and the transfer of the properties, the company will have a debt of around R3 billion instead of R9.3 billion, thus reducing the LTV to 42%, in line with best practices, ”he said.
The Eastern Cape-born Ngebulana founded Rebosis in 2010. In May 2011, he listed the group in the JSE as the first property fund to be run by blacks and substantially black-owned.
Ngebulana said he “has no doubt” that Tshabalala will do well in the CEO role.
“Following the implementation of the disposition transaction, Rebosis should be in a position to resume paying for distributions and, under Otis’ leadership, will seek growth opportunities over time,” he said.
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Palesa Mofokeng is a Moneyweb intern. Additional information from Suren Naidoo