The owner of Baywest Mall Rebosis says it is experiencing “financial difficulties” due to several issues, including rising interest rates, council tax hikes and public sector tenants who are consistently paying their rent late.

  • The owner of Baywest Mall and Hemingways Malls has decided to go into voluntary business rescue.
  • It said the company was experiencing “financial difficulties” due to several issues, including rising interest rates, rising council tax and public sector tenants who were consistently paying their rent late.
  • Rebosis has also been granted permission to suspend trading of its shares on the JSE.
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Rebosis Property Fund, founded by Sisa Ngebulana, is set to rescue the business and has had its shares suspended on the JSE with immediate effect.

The real estate company is working on a plan to restructure and strengthen its balance sheet. This included plans to sell 32 of its buildings, including those wholly owned by its subsidiary Ascension Properties Limited. Rebosis announced this plan in October 2021.

The owner of Baywest Mall and Hemingways Mall in East London said on Friday that it initially planned to put 25 assets on the market for sale that it deemed non-core or needed capital injections to turn around.

But after extensive modeling and testing of all viable options, Rebosis’ management and board of directors believe the group is now in “financial trouble”.

It will still take time to get shareholder approval for the disposal of the identified assets. At the same time, rising interest rates increase Rebosis’ debt servicing costs. It also struggles with high rates and taxes charged by some municipalities, which Rebosis cannot collect from “sovereign tenants.” In addition, the company faces persistent delays in rental payments by certain national and provincial government departments and municipalities. They account for more than 50% of Rebosis’ revenue.

“Taking into account the Reserve Bank of South Africa’s further interest rate hikes for the foreseeable future, and given Rebosis’ limited predictable cash flow, management and the board of directors believe that the best option to ensure the long-term survival of the group is to initiate a business rescue.” Rebosis wrote in a statement.

The company hopes that under the guidance of an experienced business rescue specialist it will be able to return to sustainable development and that the business rescue process can include part of its existing management strategy.

Rebosis added that its board of directors is in the process of appointing a qualified business rescue professional and has since applied to suspend trading of its ordinary shares and A ordinary shares on the JSE with immediate effect. The JSE has given its approval for the suspension.

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