Izak Petersen. Picture: SUPPLIED
Black economic empowerment (BEE) property consortium, Mergence and Dijalo, announced that it would buy 47% of Dipula Income Fund B-units from Redefine Properties in a transaction that would result in the consortium having the highest black ownership on the listed property sector of the JSE.
Dipula Income Fund came out of a merger between the property interests of BEE players Mergence and Dijalo. The merged entity was listed on the JSE in August last year.
The merger created a diverse commercial property fund with strong empowerment credentials and now boasting a R1.4bn market capitalisation.
The consortium claimed to be the country’s first full service black-owned property services company. Redefine Properties is the second largest listed South African property loan stock company with total assets under management to the tune of R37bn.
Redefine facilitated the listing of Dipula Income Fund and took a stake in the fund.
The consortium said the transaction would increase the black shareholding in the JSE-listed Dipula Income Fund to 30% with assets of more than R2.1bn. Redefine Properties retained about 66 million Dipula B-units at the listing and has successfully sold 16 million Dipula B-units through the market. The company said it would sell its remaining 50 million Dipula B-units to the BEE management consortium.
The B-units would be acquired with effect from June 1 for an aggregate consideration of R270m.
Marc Wainer, CEO of Redefine Properties said the transaction allowed Redefine Properties to dispose of all of its remaining units in a single transaction.
“The disposal is in line with Redefine’s strategy to focus on fewer, larger properties and has the added benefit of furthering the BEE objectives underlying the initial establishment of the Mergence and Dipula funds.”
Izak Petersen, co-founder of Mergence and CEO of Dipula Income Fund said the investment by Mergence and Dijalo reflected the inherent value in the Dipula B-units and their confidence in Dipula Income Fund’s sustainable income growth. He said the substantial ownership by management supported continued strong goal alignment. It also removes the perceived overhang of the Redefine Properties stake.
The transaction will take effect after payment of the distribution on Dipula B-units.