Old Mutual Namibia has sealed a N$700 million deal to acquire a controlling 63.8% interest in Vukile Property Fund’s Namibian portfolio.
Vukile, which is listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange, owns five properties in Namibia through MICC Properties Namibia located in Oshakati, Ondangwa, Katatura, 269 Independence Ave and Oshikango.
According to terms of the deal, Old Mutual Namibia’s Tunga Fund will acquire equity in MICC Properties Namibia in a phased approach.
The Tunga Fund will invest equity to acquire a majority stake of 63.8% interest in MICC subject to the refinancing of MICC, which is well progressed and legals currently being drafted, with Vukile having procured credit approved senior debt funding from Nedbank in the amount of N$565 million, which will be used to refinance MICC prior to the implementation of the Transaction.
The Fund will have a call option for a period of three years to acquire the balance of Vukile’s equity in MICC.
Due diligence for the deal has already been completed and the Namibian Competition Commission has already unconditionally approved the transaction.
Vukile will retain the asset management function for a period of five years and will earn a fee.
 MICC’s board will comprise five directors, made up of three Tunga Fund appointees and two Vukile directors.
Quizzed on the disposal of its controlling interest in the Namibia portfolio by The Brief, the JSE listed fund said, “Vukile has been looking to exit Namibia for some time in order to focus on its core strategies of growing in the South African township and rural market as well as in Spain.â€
Old Mutual Namibia’s Executive: Marketing, Communication and Customer Strategy, Ndangi Katoma told The Brief the acquisition of the stake in the Namibian property portfolio of Vukile is made in furtherance of the Tunga Fund’s long-term focused investment strategy.
“The transaction reflects our confidence in the attractiveness of Namibian assets and the long-term prospects of the Namibian economy. By acquiring assets for Namibian institutional investors – mainly pension funds – we believe that the benefits accruing from the ownership of such assets will be shared amongst a broader base of Namibians and contribute towards the long-term prosperity of the country,†he said.
“ Vukile’s exit does not reflect any negative sentiment on the country or the specific assets but is part of its strategic plan of focusing its operations on opportunities in its South African home market and in Europe. This supported our opportunity to Invest more in Namibia for a better Namibia.â€
The Tunga Real Estate Fund is an unlisted property fund capitalised by institutional investors with a mandate targeted at opportunities in residential and commercial property assets.
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