Worrying moments ahead as Rebosis Property Fund goes into business rescue

Rebosis Property Fund founded by Sisa Ngebulana has entered business rescue following the board’s decision that the group is financially distressed in terms of the Companies Act, 71 of 2008.

There is still no respite for commercial property landlords as one of South Africa’s Real estate investment trusts, Rebosis Property Fund, which owns Baywest Mall in Gqeberha and East London's Hemingways Mall, went into business rescue.

In a Sens announcement on Friday, Rebosis cited rising interest rates and late rental payments from Tenants as one of the main reasons for applying for the protection.

The JSE further granted the company its approval for the suspension of trading in its ordinary shares and A-ordinary shares with immediate effect.

Rebosis, which was founded by property magnate Sisa Ngebulana, has been struggling for several years, even before the Covid-19 financial fallout that hit the commercial property sector hard.

The property company has been working on a turnaround 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 that plan in October 2021.

On Friday, the owner of Baywest Mall and East London's Hemingways Mall said it planned to initially put 25 assets on the market for disposal that it considered non-core or felt they required capital injections to turn around.

But after extensive modelling and testing of all viable options, Rebosis' management and board believe that the group is now "financially distressed".

The company says that the South African Reserve Bank’s indication of more interest rate hikes means that the best option, to ensure its survival, is to commence business rescue and implement a business rescue plan as contemplated in Chapter 6 of the Companies Act.