TRADEHOLD, the investment company that reported a turnaround, said some of its directors would be part of the purchase of its UK properties, and some of the proceeds will fund a R4 special dividend.
Tradehold’s directors said the changes would entail the subsequent listing of Tradehold as a JSE listed Real Estate Investment Trust, and it was hoped it would result in a narrowing of the discount that the share traditionally trades at.
Tradehold’s shares surged 7.93 percent to R10.74 yesterday afternoon. For the year to February 28, Tradehold’s intrinsic net asset value was 101.3 pence or R20.96 per share.
Subsidiary, Tradehold S.à.r.l. would sell Moorgarth Holdings (Luxembourg) S.à.r.l., as well as Tradehold S.à.r.l.’s loan claims against Moorgarth, to Moorgarth Group Holdings, for 102.5 million pounds (R2.03 billion).
Moorgarth is the holding company of Tradehold's UK interests.
In South Africa most of Tradehold’s property holdings are in its 74.3 percent owned subsidiary Collins Group, which has properties mainly in KwaZulu-Natal.
The UK operations include serviced office accommodation in Central London. Tradehold also owns properties in other Southern African countries, mainly Namibia.
The group said entities associated with Tradehold’s directors, Dr C Wiese, KR Collins, FH Esterhuyse, TA Vaughn and KL Nordier, were also shareholders of the purchasing company, a statement said yesterday.
The disposal would be effective from March 1, 2022, and income earned after this date would be retained in Moorgarth, save for payments to repay the principal amount and interest owing on loan claims owing to Tradehold S.à.r.l. made thereafter.
Tradehold said post the disposal the primary investment focus would be its portfolio of industrial and logistics properties held in Collins Property Projects.
Tradehold directors who were independent of the purchaser believed these changes would contribute to a potential re-rating of Tradehold shares
The disposal consideration would be used to redeem preference shares held by Rand Merchant Bank, and the balance would be used to fund a special dividend to Tradehold shareholders of about R4 per share.
Tradehold yesterday declared a cash dividend of 30 cents per share, being the distributions made by the Collins Group every six months in terms of the agreement with its minority shareholders.
The group reported a turnaround to a profit of £20.3 million compared with a loss of £39.7m in 2021.
BUSINESS REPORT