Turnstar seals $77m Tanzania deal

Staff Writer | Thursday March 1, 2012 00:00

Turnstar, which owns several blue chip assets such as Game City in Gaborone and Nzano Centre in Francistown, had been working on closing the Mlimani City Property Development since early last year.Through the deal, Turnstar now wholly owns Mlimani, which consists of a multi-business area comprising a shopping centre, an office complex, a top-class conference centre and a residential housing estate with 50 units. The deal will also significantly enhance the value of Turnstar's portfolio that comprised nine properties worth P683.5 million as at January 2011. The Mlimani deal, therefore, will account for nearly half of the new portfolio in terms of value.

Yesterday, Turnstar's management announced that all dimensions of the funding package for Mlimani had been finalised with the complex's former owners.'The board and management are excited about the Mlimani transaction, as it represents a tremendous opportunity, not only to strategically enhance shareholder value and strengthen our competitive market position but also represents a catalyst for the transformation of Turnstar into a pan-African property champion,' said Turnstar's managing director, Jacob Motlhabane.

He added: 'We are thrilled to expand our presence into one of the strongest growing markets in Africa with a truly unique asset that is the premier retail destination in Tanzania.'Turnstar's board equally hailed the finalisation of the Mlimani deal. 'This transaction represents a signiÞcant growth milestone in the life of Turnstar and has given Turnstar operational control of a world class property asset anchored by high-quality retail and office tenants to enhance the rental yield, distribution yield, geographic diversification and the overall quality of Turnstar's property portfolio,' the board said in a statement. The deal's funding was a three-fold affair involving a US$30 million loan secured by Turnstar, the issue of US$20 million in linked units to Mlimani's former owners and US$27 million raised through a rights offer to existing Turnstar shareholders.

According to Turnstar, the rights offer, under which Turnstar shareholders were offered 108.7 million new units, closed recently with the shareholders taking up nearly 30 percent of the equity on offer. The balance, comprising 76.4 million linked units, was issued to the former owners as settlement of the sale agreement.