Old Mutual Namibia paid Johannesburg Stock Exchange listed Vukile Property Fund a whopping N$700 million to acquire a controlling 63.8% stake in the company’s Namibian portfolio.
The listed insurance giant, through its Tunga Fund, acquired a significant interest in MICC Properties Namibia owned by Vukile.
MICC owns five properties in Namibia, located in Oshakati, Ondangwa, Katatura, 269 Independence Ave and Oshikango.
According to terms of the deal, the Tunga Fund paid for the majority stake in MICC subject to the refinancing of MICC, with Vukile having procured credit approved senior debt funding from Nedbank in the amount of N$565 million, which was used to refinance MICC prior to the implementation of the Transaction.
Old Mutual Namibia’s Tunga Fund has a call option for a period of three years to acquire the balance of Vukile’s equity in MICC.
Vukile has retained the asset management function for a period of five years and a position in which it will earn a fee.
The reconstituted MICC’s board now comprise five directors, made up of three Tunga Fund appointees and two Vukile directors.
Due diligence for the deal has already been completed and the Namibian Competition Commission has already unconditionally approved the transaction.
The disposal of the shareholding was part of the REIT company’s active asset rotation plan, which also saw R800 million worth of non-core assets in South Africa sold at or above book value.
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.
