Growthpoint thrives on Primegro merger

Posted On Tuesday, 30 September 2003 02:00 Published by eProp Commercial Property News
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Property loan stock company Growthpoint reported a 33,5% increase in units traded over the past year, the company said on Friday.   

Sam Leon InvestecGrowthpoint became the largest listed property company in SA following its merger with loan stock company Primegro Properties earlier this year.
Sam Leon, of Investec Property Group, which manages the merged Growthpoint, said on Friday the merged Growthpoint company was running smoothly in terms of the integration of the various personnel.
The four executive directors, including himself, Norbert Sasse, Derek Greenberg and Martin Ettin, were all senior experienced people, he said.
"We are operating very strongly as a team.
"We also have the financial skills of the accountants (from both theGrowthpoint and Primegro sides) and they are fully integrated," said Leon.
The merged Growthpoint has a market capitalisation of R3,39bn and an asset base of about R5,3bn, making it the largest listed property company on the JSE Securities Exchange SA.
Commentators have pointed out that both Growthpoint and Primegro had problems with liquidity before merging, and questioned whether the merger would increase this.
However, Leon said that Growthpoint had in the context of the sector already demonstrated itself to be a liquid stock.
In terms of the merger - which became effective from May 1 following the approval of the Competition Commission - Primegro had been required to sell its properties to Growthpoint.
The total purchase consideration was R2,5bn, which was settled partly in cash and Growthpoint issuing units.
Primegro would also be wound up voluntarily, with the transaction proceeds being the new Growthpoint-linked units that were distributed to Primegro-linked unit holders before liquidation.
Growthpoint also announced that it had acquired the Waterfall Mall regional shopping centre in Rustenburg.
The acquisition of the centre cost R284,6m in cash, to be funded by debt facilities.
The company said the Waterfall Mall acquisition would increase Growthpoint's total asset base to about R5,6bn while the quality of the mall would complement the overall quality of its retail portfolio.


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