Sisa Ngebulana. Picture: FINANCIAL MAIL
Sisa Ngebulana. Picture: FINANCIAL MAIL

Rebosis Property Fund’s shares slipped deeper into record low territory on Tuesday as the landlord’s debt burden continues to spook investors.

Analysts say the group’s woes stem largely from its 2015 acquisition of UK-focused New Frontier Properties, which pushed up debt and ultimately led Rebosis to halt distributions to shareholders — an industry first, at least in recent history. 

Rebosis is also grappling with industry-wide challenges, including Edcon’s financial troubles, rising vacancies and funding costs, weaker retail sales in its malls, and difficulties in selling its office properties, said Keillen Ndlovu, head of listed property funds at Stanlib.

But its decline has been worse than most. Rebosis’s ordinary shares fell another 22.5% on Tuesday to close at a record low of 69c. That equates to a 95% decline from the high of R13.25 reached in February 2017.

The group’s slide has not slowed recently; its market capitalisation has halved since the end of January to just R1.6bn.

Founded by Eastern Cape entrepreneur Sisa Ngebulana, Rebosis said earlier in May it was in talks to sell three of its six malls — Mdantsane City Shopping Centre, Bloed Street Mall and Sunnypark Shopping Centre — to Vukile Property Fund, for R1.8bn.

Ngebulana, the group’s CEO, said at the time he would look to sell two more malls to raise cash and to reduce the company’s loan-to-value ratio, which had grown from 51.6% at the end of August 2018 to 57.1% at the end of February.

“For Rebosis to come back, the market needs to see the sale of assets to Vukile go through,” said Ndlovu. But more assets would need to follow for Rebosis “to be in a more comfortable debt position”.  

Ndlovu said that given the group’s hefty discount to net asset value relative to the sector, it could also look to merge or be taken over by another entity. Alternatively, it could “sell all the physical assets, pay off the outstanding debt and return the balance of cash to investors".