PIC lifts stake in embattled Texton Property Fund

The Public Investment Corporation (PIC), Africa's largest fund manager, has boosted its stake in the troubled Texton Property Fund (JSE: TEX) after a black empowerment investor defaulted its loan.

PIC has become the largest shareholder in embattled Texton Property Fund, as it looks to turn around the struggling company.

The real estate investment trust (Reit), announced yesterday that PIC had grown its stake from 5.2% to 18.9%.

Marius Muller, CEO of Texton, says, “The PIC is a long-standing shareholder of Texton and we look forward to continuing to work closely with them and all shareholders on our journey towards positive performance.”

The PIC’s increased holding in Texton follows the transfer of shares formerly held by Texton Broad-Based Empowerment (RF) Proprietary Limited to the PIC, after the empowerment entity defaulted on its loan with the PIC.

The company’s share price has plummeted from a high of R12.15 in 2014 to R4.25 at the end of trade on Wednesday. The company has been unable to provide dividend growth forecasts for the year to June.

With its accountability to shareholders being an imperative for Texton, Muller notes that in recent months the company has made pleasing advances with several initiatives that place it on a better footing for the future.

He adds, “We know the road ahead isn’t going to be easy given the amount of work that needs to be done around entrenching both sound business practices and critical property basics within the company. We’re constantly challenging ourselves to find the best solutions to move Texton forward, and remain firmly committed to turning the ship around despite the economic environment being unsupportive and weak property fundamentals.”

Texton held assets valued at R5.2 billion at the end of last year in offices, industrial and logistics facilities and retail properties, with 62% by value in large South African cities and 38% in UK secondary nodes.