Two prominent shopping malls in the Eastern Cape, Baywest in Gqeberha and Hemingways in East London, are being put up for sale as the company founded by property mogul Sisa Ngebulana grapples with a substantial debt burden of nearly R10 billion.
These well-known malls, situated in the province’s major metropolitan areas of Nelson Mandela Bay and Buffalo City, are among five shopping centres in the country that are being divested as reported by News 24. This decision follows the entry of Rebosis Property Fund, the owner, into business rescue in August.
Baywest commenced operations in May 2015, and Hemingways, established in 2009, are jointly valued at approximately R3.3 billion, according to the business rescue documentation.
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The remaining malls to be sold across the country include Forest Hill, valued at R860 million; Sunnypark, valued at R652 million; and Bloed Street, valued at R436 million.
The business rescue practitioners, Phahlani Mkhombo and Jacques du Toit, have set a deadline of 20 July for the submission of final offers.
Rebosis Property Fund, a real estate investment trust company, is facing significant challenges in rectifying its balance sheet. Previously, it owned six malls until it was compelled to sell its Mthatha-based B.T Ngebs Mall, named after Ngebulana’s grandfather Buchanan Tandi.
Established by Ngebulana in 2010, Rebosis also owns primarily large single-tenanted commercial offices in locations that are attractive to the South African government. These holdings constituted just over half of its R13 billion in property assets as of its half-year report ending in February 2022, which was its last financial disclosure before entering the business rescue. At that time, the company had a net debt of R9.7 billion and a negative cash balance.
When approached for comment on Thursday, Ngebulana, who currently serves as a minority shareholder, revealed that he retired from the Rebosis board in 2017 and redirected inquiries to the company.
Nevertheless, Ngebulana confirmed to News24 that he founded the company and listed it with R3.6 billion of his personal assets in 2010. By the time of his retirement, he had grown this figure to R22 billion.
Ngebulana stated that he still retains a 16% ownership stake in Rebosis.
“I am one of many shareholders, but a minor shareholder, and I retired from the board back then and have no idea… why they took the business into rescue,” Ngebulana remarked.
He further explained that his retirement from Rebosis was prompted by the need to concentrate on his property development and investment firm, Billion Group, as he couldn’t adequately manage both companies simultaneously.
Heraldlive reported instances of neglected properties due to insufficient funds for maintenance and refurbishments and high vacancy rates.
Concerning Baywest, developers had initially planned to construct housing projects adjacent to the mall, which would have provided a customer base. However, the provincial government opposed the proposal on environmental grounds.
In 2022, signs of trouble emerged when the mall shut down the province’s sole ice rink due to its failure to meet expectations.
Photo by MART PRODUCTION