Accelerate continues with R100 million rights offer amid large related-party uncertainties

Accelerate Property Fund (APF), which has Fourways Mall Shopping Centre as its main asset, said Friday a R100 million rights offer that opens on July 14 will continue, in spite of uncertainty about the outcome of a R800m agreement with the developer of the mall.

APF’s share price fell 5.56% to 51 cents on Friday, much in line with the share price of 53 cents that it traded at a year earlier.

“APF remains committed to restructuring its operations with a focus on improving the Mall as APF's largest asset. The opening of the rights offer… is an important step towards the completion of these restructuring efforts, the proceeds of which will be utilised for improvements of the Mall and working capital needs of APF,” a notice said Friday.

APF’s directors said the rights issue would add to the R200m already raised by APF in a rights offer in June 2023.

Meanwhile, a settlement agreement entered into in November last year, between APF and co-developer of the mall, Azrapart, had lapsed due to suspensive conditions not being fulfilled in the requisite timeframe.

Last month, media reports showed Azrapart was placed into business rescue by the High Court in Bloemfontein, following an application by FirstRand’s RMB and Investec, but Azrapart is appealing the ruling.

Other parties to the agreement with APF are Accelerate Property Management Company, the manager of the properties owned by APF other than the Mall; Fourways Mall Managing Agent and Fourways Precinct, the former manager of the Mall; the trustees of the Michael Family Trust; and APF’s former CEO Michael Georgiou, who also controls Azrapart.

Shareholders were previously told that APF would engage with the parties to conclude a new agreement, on the same or close to the same terms as the initial settlement agreement.

“Although both parties have indicated their willingness to sign the new agreement, the new agreement has not yet been concluded…and negotiations with the related parties are ongoing.”

Should the new agreement be concluded, the balances due to and from the related parties would be offset to R0. Should the new agreement fail to be concluded, R800m, being the amounts receivable from the related parties, might be impaired by APF.

APF said it would publish its results for the year to March 31, 2025, by July 31, 2025, whether or not the new agreement was concluded between APF and the related parties.

If the new agreement was not concluded, legal advice would be sought about the validity and quantum of the claims. APF would also consider all available remedies to seek the recovery of the amounts due by the related parties to APF, it said in a statement.

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