Africa-Press – South-Africa. Hyprop Investments will acquire four assets in Hystead’s Eastern European (EE) portfolio, including Skopje City Mall, North Macedonia; City Center One East and City Center One West in Croatia; and, Mall of Sofia, Bulgaria, for €173 million (R2.98 billion).
Hystead’s fifth property, Delta City Podgorica in Montenegro, is being sold, and Hyprop plans to retain its €45m interest in it, representing 60 percent of the value, until the sale is complete, Hyprop chief executive Morné Wilken said Friday.
Hyprop owns 60 percent of Hystead, with PDI Investment Holdings owning the other 40 percent. The acquisitions will be funded from Hyprop’s cash reserves and debt facilities.
Hystead would use the funds to reduce equity debt. A minimum of €132m of the Euro equity debt would be settled and/or replaced with Rand debt, and Hyprop’s exposure to Euro equity debt in the target group companies would increase by €23m.
The loan-to-value ratio would remain within bank covenants. Gorup liquidity was strong, with R1.59bn cash and R900m unused revolving credit facilities at November 30, 2021. The share price increased 2.01 percent to close at R35.50 on Friday.
Wilken said the transaction would enable Hyprop to take full control of the Hystead properties and increase Hyprop’s effective interest in the group’s EE portfolio.
The deal would reduce Hyprop’s risk exposure and provide greater disclosure and transparency. Hystead’s management team would be retained. The deal would also position Hyprop to grow its EE portfolio over the long term.
Wilken said this was in line with strategy to diversify exposure into EE, mitigating the risk to a weaker South African economy. Hyprop’ s local assets include Rosebank Mall, Canal Walk and The Glen.
Once the transaction was concluded and Delta City Podgorica was sold, the plan was to wind up Hystead, settling it’s outstanding debt and releasing Hyprop and PDI from guarantees in the shareholders’ agreement.
“Hyprop is confident the group’s strategy and key priorities remain relevant, even in a prolonged Covid-19 environment, and the focus for the EE portfolio remains to retaining the dominance of the malls through active asset management initiatives and strategic redevelopments, leveraging the group’s SA expertise, securing rights for further mall extensions, and completing the refinancing or settlement of the equity debt,” the group said.
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