The restructuring plan involves the injection of R30m of new capital into the company for the issue of new A-Prop units at a price to be determined by fair market value after taking cognisance of the material dilution in the A-Prop net asset value and the liquidity issues facing the company.

The issue of the new linked units will be subject to a claw-back offer to be extended to all remaining unitholders proportionate to their existing holdings.

The company reports that the proceeds will enable it to reach agreement with certain property vendors for the settlement of the deferred payments due last month.

This would help pay half of the costs of unwinding existing interest rate hedges on the company's loan facilities which amounted to about R13,5m. It would also provide the balance to meet its existing commitments and future working capital requirements.

A-Prop, the management of which was taken over by asset managers Corovest on June 1 , reported a "difficult year" for the financial year ended June 30.

The company reported that "conditions in the property market were far from favourable" and that the interest distribution by the company had fallen substantially.

Michael Aitken, a director of Corovest, said high interest rates had hurt the property market and confidence in general.

Aitken said that an oversupply of real estate in general had also affected the rentals achievable by AProp.

The distribution of debenture interest for the year had fallen to 14,27c for each linked unit from 24,4c in the preceding 10 months.

The company attributed this to the renewal of numerous leases at lower than their expiry rentals due to weak conditions in the property market, an increase in vacancies, an increase in bad debts and the high maintenance costs of properties lately.