Rebosis, a debt-laden shopping mall owner, is getting a helping hand from creditors as a nationwide lockdown to contain the spread of novel coronavirus puts strain on its rental income.
The company, which is headed by founder CEO Sisa Ngebulana, said on Friday lenders have agreed to extend maturities on expiring debt until the end of August, giving it a brief reprieve as smaller tenants at its shopping malls close shop for next three weeks to comply with the restrictions.
“The company has successfully managed to extend all expiring debt facilities to the end of August 2020 and continues to meet its financial obligations in the normal course of business in the current known circumstances,” it said in a statement on Friday.
Rebosis, with a property portfolio worth R15.6bn, is labouring under a R10bn debt pile that has pushed up its loan-to-value ratio — a ratio watched by lenders which weighs debt relative to the value the portfolio — to about 65%, well above the minimum of 40% demanded by fund managers.
The company said it has not worked out the effect of the lockdown, which started on Friday, on its finances, and said it may have to delay its half-year financial results, which are due to be published on May 25.
With the lockdown, many of Rebosis’s tenants who are medium and small businesses are no longer able to open their stores, sapping their cash flows and potentially triggering a fight for survival.
This piles further pressure on the company, which is struggling to get tenants to agree to rental increases on new leases. Rebosis and other listed property funds are trying to manage tenants in the worst economic conditions in SA in decades, as customers spend less and few companies expand their operations locally.
Rebosis’s ordinary shares fell 10.53% to 17c on Friday, bringing the losses so far this year to 50% and down 98.7% on a three-year basis.
The company’s struggles were enhanced last year after it sold its stake in New Frontier for the equivalent of R700, having lost more than R2bn on the investment. Uncertainty about the Brexit process, whereby the UK will leave the EU, led to a writedown of commercial property values in Britain.
The FTSE/SE SA Listed Property Index closed 7.5% lower on Friday, down more 50.1% over the year to date.
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