RDI shares slump after takeover offer dropped
Aviva Commercial Finance has agreed to an almost six-month period to resolve covenant breach
Shares in RDI Reit slumped 14.7% to R24.75 on Wednesday morning, even as the landlord said it had reached a standstill agreement with a firm that finances four of its malls in the UK. The sell-off came after RDI said after the market’s close on Tuesday that it had rejected a takeover offer from Cromwell Property Group. “The board considered the proposal, which undervalued the company and its prospects, and, as a result, the board took the unanimous decision not to support a further period of due diligence,” RDI said on Tuesday. Meanwhile, RDI has been granted a reprieve. It said earlier this month that after four shopping centres were revalued by financier Aviva Commercial Finance, the lender’s loan-to-value ratio on this facility breached its covenants. The parties said previously they had had until Tuesday to “cure the covenant breach, which would require a cash cure of approximately £9.4m or the addition of new collateral”. But RDI said on Wednesday a standstill period, extending...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.