Resilient’s history of granting loans to employees to buy shares in the property fund has concerned some fund managers who worry about the ability of employees to repay the loans. Resilient’s current long-term share incentive scheme allows it to lend an employee up to 20 times that employee’s gross remuneration to buy shares in the group, at a weighted average cost of funding, which was 8.87% at the end of December. At the end of trade on Tuesday, the company’s share price was down 57.76% year-to-date, having closed at R63.85. There has been a sustained sell-off in the stock, suggesting that some Resilient employees’ investments in the group are under financial strain. "We would assume that all loans taken from 2015 onwards are now likely underwater, meaning what is owed on the loans is higher than the value of the assets held, and any loans taken over the last two years are experiencing severe distress," said Garreth Elston, of Golden Section Capital. However, Resilient CEO Des de ...
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