Colliers management buys unprofitable units

Colliers SA Holdings has sold its loss-making noncore subsidiaries to its executives for R1,25m as it focuses on being a commercial property-focused company.

JSE-listed Colliers SA Holdings has sold its loss-making noncore subsidiaries to its executives for R1,25m as it focuses on being a purely commercial property-focused company with industrial and retail property investments.

Colliers, which has been restructuring its business since 2010, said yesterday that the disposal would facilitate the long-term growth of the company as management’s attention would not be “misdirected” to lossmaking businesses.

It said yesterday it had accepted an offer from Reccared Prankir Fertig, Wayne Peter Alcock, Ian Kenneth Setzkorn and Bernard William Kaiser to acquire its noncore subsidiaries — the service companies and properties held for sale.

The company previously had operations consisting of two segments: property holdings and related services, and payroll services. It has now disposed of the two businesses to focus on the property sector.

Colliers said the disposal would result in it being a purely commercial real estate company with industrial and retail property investments in Elsies River and Hout Bay in the Western Cape.

It said the realignment of its business strategy was also expected to facilitate future acquisitions to grow income.

Colliers said the disposal consideration would be paid by the executives to the company in 12 equal monthly instalments starting from the beginning of this month. It said it would use the money from the sale to reduce debt.

Next month, Colliers intends to change its name to Adrenna Property Group.

The company has advised shareholders of the proposed name change alongside a proposal to convert existing par-value shares to shares of no par value.

It said the main business of Colliers was that of a property holding company and it was only through Colliers RMS, its wholly owned subsidiary, that the company provided property-related services such as property and facilities management, broking, auctioning and development. The name change is meant to differentiate the group from the property-related services associated with the Colliers International brand.

A general meeting is scheduled for February 8 in Johannesburg for shareholders to consider the name change and conversion of shares to no-par-value shares.