BPOPF buys PrimeTime�s Francistown properties
Staff Writer | Wednesday August 26, 2015 15:45
The disposal of the properties, Barclays Plaza and Blue Jacket Square, is expected to unlock fresh funds for the property company, in a market constrained by high cost of funds as well as liquidity shortages.
“The board of PrimeTime Property Holdings announces that agreement has been reached for the disposal of the two properties for a total consideration of P71 million, payable in cash,” the listed property company said in a statement.
PrimeTime bought Barclays Plaza, Blue Jacket Square and Nswazi Mall from Tati Company in 2008 for P75 million.
According to PrimeTime, the impact of this disposal on the net assets of the company will not be material. The listing requirements of the Botswana Stock Exchange recognises a material transaction if the value is worth three percent.
However, the disposal proceeds are expected to have a significant impact on PrimeTime’s net profits.
“The profoma impact on net profit after tax accruing from this disposal is estimated to be P9 million which equates to earnings of 5.03 thebe per linked unit. The audited earnings for the year ended 31 August 2014 were 39.76 thebe per linked unit.
“The disposal provides the company with a unique opportunity to realise a premium over the independently determined carrying value of these Properties. The cash proceeds will initially reduce the finance costs of the company and going forward provide greater funding capacity for future investments,” said PrimeTime.
The BPOPF has its P50 billion assets invested in equities, currencies and bonds.
Under a new investment strategy the BPOPF has pioneered private a equity worth P800 million as well as an infrastructure investments fund, which will primarily finance government-backed projects through bond issuance.
The pension fund, which owns a 17 percent stake in PrimeTime, will add the new Francistown properties to its dedicated property Fund.
In the financial year ended 31 August 2014, PrimeTime’s portfolio value increased to P732 million from P544 million in 2013, as a result of the addition of three new properties in the Prime Plaza.
The company’s debt ratio stood at P295 million at the end of 2014 financial year, amounting to 40 percent of its portfolio value.
In its 2014 annual report, PrimeTime managing director Sandy Kelly said their new strategy would help push their portfolio value to over P1 billion by 2016.
PrimeTime’s portfolio consists of properties such as the Sebele Mall, United Nations Place, the South African High Commission, Independence Place, South Ring Mall and Capricorn House, all in Gaborone.
Properties in other towns include Mantlo House in Francistown, Ramotswa Shopping Centre, Boiteko Junction in Serowe and Ghanzi Shopping Centre.
PrimeTime recently added three buildings within Prime Plaza in the CBD to its portfolio, comprising of Barclays House, Marula and CEDA House.
The company is now proposing the development of a 7,500 square-metre retail shopping centre in Pilane, which will cost close to P100 million.