Attacq Limited (“Attacq”), the JSE-listed REIT developing Waterfall City, announced that it has entered into a non-binding term sheet with the Government Employees Pension Fund (“GEPF”), represented by the Public Investment Corporation (“PIC”). The GEPF will acquire a 30% interest in the ordinary shares and shareholder loans held in Attacq Waterfall Investment Company (“AWIC”), a wholly owned subsidiary of Attacq and the owner of Waterfall City.
The investment will be made through issuing new AWIC equity, acquiring AWIC shareholder equity and shareholder loans from Attacq, and the extension of an additional pro-rata shareholder loan by the GEPF. The conclusion of the transaction will result in GEPF owning 30% of AWIC for an estimated cash consideration of R2.8 billion.
Commenting on the announcement, Attacq Chief Executive Officer, Jackie van Niekerk said, “We are pleased by this transformative transaction for Attacq, to introduce the GEPF as a long-term strategic investment partner to AWIC. Working closely alongside our new partners, we remain committed in fulfilling our strategic purpose of creating sustainable value for all stakeholders.”
The transaction aligns with Attacq’s strategy to optimise the Group capital structure by creating a significant de-leveraged balance sheet with the capacity to fund the World-class, Waterfall City development pipeline with no additional capital required from shareholders in the medium term. Furthermore, Attacq will benefit from numerous cost savings and efficiencies, while retaining its important REIT status. Attacq will retain full control of AWIC through its majority stake and will continue to provide asset management and administration services to AWIC at market-related fees.
Attacq Chief Investment Officer, Peter de Villiers said: “Attracting this significant investment from the GEPF is a major affirmation of the quality of Waterfall City, one of South Africa’s fastest growing work and lifestyle precincts. We can now expedite the ongoing rollout of developments within Waterfall City as part of our precinct strategy which focuses on creating safe, smart and sustainable retail-experience, collaboration and logistics hubs.”
The proceeds will be utilised to optimise the capital structure of both AWIC and Attacq by de-leveraging the Group’s balance sheet, enhancing the liquidity position of Attacq, and improving investment capacity.
“We are truly excited about this milestone transaction for Attacq and Waterfall City. It also provides the GEPF with a unique investment opportunity in the co-ownership of a world class city. Once implemented, Attacq will see its gearing reduce from 37.2% to c. 24.0% on a pro-forma basis providing the balance sheet to develop out Waterfall City. Attacq’s capital structure will also be optimised resulting in a reduced cost of capital thereby enhancing returns for Attacq’s shareholders. It’s a win-win for all stakeholders.” says Attacq Chief Financial Officer, Raj Nana.
The transaction is subject to the fulfilment of certain conditions. Since the transaction is classified as a Category 1 transaction in terms of the JSE Listings Requirements, majority shareholder approval is required.
About Attacq
Attacq Limited and its subsidiaries is an innovative Real Estate Investment Trust (REIT), based in South African and listed on the Johannesburg Stock Exchange (JSE), with a vision to create sustainable value for all stakeholders through a value-based strategy, ensuring a positive impact in our communities and the environment we operate in. Attacq is well-positioned to deliver on its purpose to create smart, safe and sustainable community spaces providing remarkable experiences in our managed hubs.
Attacq’s portfolio is diversified across different asset classes, geographies and quality counterparties, providing the building blocks for resilience and enabling additional value added real estate opportunities.
Attacq’s focused approach is on: (1) Waterfall City, comprising its completed real estate portfolio, developments under construction and leasehold land; (2) Rest of South Africa, comprising the remainder of its South African completed real estate portfolio; and (3) Other investments, comprising a 6.5% interest in MAS P.L.C. (MAS) and its Rest of Africa retail investments. Going forward, business diversification will be the fourth focus area, achieved through investing in opportunities complementary to Attacq’s real estate portfolio.
About Attacq Waterfall Investment Company Proprietary Limited
AWIC is a wholly owned subsidiary of Attacq, holding Attacq’s completed real estate portfolio and development and leasehold rights in Waterfall City (including developments under construction and leasehold land).
