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FAIRVEST PROPERTY HOLDINGS LIMITED - Further Operational Update on the Covid-19 Impact and Update on the Disposal of Tokai Junction

Release Date: 08/06/2020 17:05
Code(s): FVT     PDF:  
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Further Operational Update on the Covid-19 Impact and Update on the Disposal of Tokai Junction

FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share code: FVT
ISIN: ZAE000203808
(Approved as a REIT by the JSE)
(“Fairvest” or “the Company”)


FURTHER OPERATIONAL UPDATE ON THE COVID-19 IMPACT AND UPDATE ON THE
DISPOSAL OF TOKAI JUNCTION

Shareholders are referred to the operational update on the COVID-19 impact and the
withdrawal of guidance announcement published on SENS on 6 May 2020. This
announcement intends to provide a further update with additional information to all
stakeholders on the impact of the COVID-19 pandemic on various aspects of Fairvest’s
business and operations.

Operational update

Over the past two months Fairvest actively engaged with all our tenants on the impact of
COVID-19 on their businesses in order to find sustainable solutions. Negotiations are ongoing
and we expect to have the majority of these negotiations concluded by year-end, 30 June
2020.

Concessions in the form of gross rental deferrals and rental credits have been provided to
tenants, dependent on their specific circumstances. Gross rental deferrals of April 2020, May
2020 and June 2020 billings were provided to certain Small, Medium and Micro Enterprise
(“SMME”) tenants, with repayment terms ranging from 3 months to 36 months, starting from
1 July 2020.

Of the gross billings in April 2020 and May 2020, credits of 6% were conceded to, with specific
terms and conditions, and deferrals were provided on 12% of total gross billings. Negotiations
with certain individual tenants and tenant groupings continues.

Previously reported collections for April 2020 were in excess of 60%, however after taking into
account the above-mentioned concessions, approximately 77% of collectable billings were
collected. For May 2020 the collection percentage, after concessions, increased to
approximately 86% and for the first 8 days of June 2020, 82% of collectable billings have been
collected.

Balance sheet management

Prudent balance sheet management and liquidity planning remains a priority. Fairvest’s
funding profile is well diversified over five South-African commercial banks and has no
exposure to the bond market.

Fairvest has one debt facility, of R128 million, due for refinance during the balance of the
calendar year. The facility matures in December 2020 and the expectation is to conclude an
early refinance within the next 2 months. As at 8 June 2020, Fairvest has approximately R120
million of undrawn debt facilities available and has R234 million of unencumbered investment
property.

Fairvest’s loan to value percentage as at 31 May 2020 was 36.7% of which 61.2% was fixed.

Fairvest confirms that all debt covenants are, and are expected to continue to be, comfortably
met.

Update on disposal of Tokai Junction

Shareholders are referred to the announcement by the Company on SENS on 6 April 2020
(“Initial Announcement”) in respect of the agreement (“Disposal Agreement”) entered into
between the Company and FPG Holdings Proprietary Limited (“Purchaser”), in terms of which
the Company will dispose of the shopping centre rental enterprise operated by Fairvest,
commonly known as Tokai Junction (“Rental Enterprise”), including the property on which
the Rental Enterprise is being conducted on situated at Erf 10800, Constantia, Cape Town
(“Property”), to the Purchaser, as a going concern, for a disposal consideration of
R190 000 000 (“Disposal”).

Due to disruptions caused by COVID-19, the parties have agreed to extend the dates for
fulfilment of the conditions precedent referred to in the Initial Announcement, with the result
that the Disposal is now subject to the following conditions:

-      that, within a period of 20 business days commencing 15 June 2020, the Purchaser
       undertakes a due diligence investigation of the Rental Enterprise and is satisfied with
       the outcome thereof; and

-      that, if applicable, within a period of 50 days following the date on which the above
       condition precedent is fulfilled, the Disposal is unconditionally approved by the relevant
       competition authorities or, is approved upon such terms and conditions as are
       reasonably acceptable to the Purchaser.

Registration of transfer of ownership of the Property into the name of the Purchaser at the
applicable Deeds Office is now expected to occur on 1 September 2020. Accordingly, the
monthly escalation of the disposal consideration for the Rental Enterprise of 0.58%, as set out
in the Initial Announcement, is now only applicable should registration of transfer of the
Property occur after 1 October 2020.

General

The financial information contained in this announcement has not been reviewed or reported
on by Fairvest’s external auditors.

We will continue to update stakeholders on the anticipated impact on our business as
circumstances change.

8 June 2020
Cape Town

Sponsor
PSG Capital

Date: 08-06-2020 05:05:00
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