Listed property group Growthpoint Properties has agreed to sell 14.2% of its total linked units in issue with a current market value of 1.01 billion rand to a consortium of black economic empowerment (BEE) partners, the company announces.

The BEE consortium will acquire 100 million units in Growthpoint, of which 52.5 million will come from the Mines Pension Funds and 47.5 million from Investec Employee Benefits. With a market price of 10.14 rand per unit on August 29, the total value of the transaction comes to 1.01 billion rand.

The BEE consortium is led by three groups: Amabubesi Investments, the investment holding group led by former head of public prosecutions Bulelani Ngcuka; Miganu Investment Holdings, formed by Mzolisi Diliza and including former Justice Minister Penuell Maduna; and Unipalm Investment Holdings, whose largest shareholder (with 18%) is Afripalm, an investment vehicle owned by Ragavan Moonsamy and Lazarus Zim, head of mining group Anglo American (AGL)'s South African operations.

As a part of the transaction, the BEE consortium has also acquired a 14.2% interest in the Growthpoint asset management contract from Investec Property Group, which entitles the consortium to 14.2% of the asset management fees arising from the agreement between Growthpoint and Growthpoint Managers regarding the management of Growthpoint's property portfolio.

While the three members of the BEE consortium will each own a one-third stake in the consortium, their indirect effective interest in Growth point will be 4.7% each, with each stake valued at 338 million rand.  Bulelani Ngcuka and Ragavan Moonsamy will join the Growthpoint board as non-executive directors, joining Mzolisi Diliza who is already a non-executive director.

Funding of the transaction will partly come from Absa Group and Old Mutual Specialised Finance, advancing 348 million rand each in senior and junior funding, for a total of 696 million rand. Growthpoint, meanwhile, will advance mezzanine funding totaling 204 million rand to acquire Growthpoint debentures.

All of the funding will be provided on a 10-year basis, with an election by the lenders to review their funding after seven years.

Investec Private Bank is also providing a facility of up to 36.5 million rand to the BEE consortium to fund their equity participation of 5 million rand in the transaction and to fund the BEE Management company transaction.

The consortium members are not allowed to sell or alienate their interest in Growthpoint during a certain lock-in period, and they are required to remain controlled by broad-based empowerment entities and/or individuals during the period. Should they wish to sell their interest after the end of the lock-up period, they must sell their interest to a party that maintains the BEE status of the shareholding.