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The government, through the Public Investment Corporation, is set to acquire a 30% stake in Waterfall City for R2.7 billion, after signing a binding agreement with developer Attacq this week.
Attacq announced on Thursday that the parties – the PIC and the Attacq Waterfall Investment Corporation (AWIC) – concluded binding legal agreements detailing the terms and conditions of the proposed transaction.
AWIC is a wholly owned subsidiary of Attacq, holding Attacq’s completed real estate portfolio and development and leasehold rights in Waterfall City in Midrand – including developments under construction and leasehold land.
The newly developed city, which is home to Mall of Africa, the PwC tower and a host of other new residences and office developments, is one of the fastest-growing precincts in the country.
Should the transaction be approved by shareholders and be implemented, the PIC will acquire 30% of the ordinary shares and shareholder loans in AWIC in exchange for a maximum consideration of R2.4 billion in cash, with an additional R300 million being injected by the PIC into AWIC as a shareholder loan.
“The effect of the proposed transaction, if implemented, is that Attacq will retain control of AWIC with a
majority shareholding of 70%, with the (PIC) holding a minority shareholding of 30%, and Attacq
continuing to provide asset, property, development and fund management services to AWIC at market-related fees,” Attacq said.Attacq said that it would use the proceeds of the sale to settle R2.2 billion of debt in AWIC and around R500 million of debt in the rest of the Attacq Group.
While the preliminary purchase price is in flux, and the final price is still to be determined, the maximum price set for the deal is R2.688 billion, including the R300 million loan.
The entire Waterfall City development has an asset value of R15.2 billion, including the R5.2 billion Mall of Africa and R1.9 billion PwC tower.
Of this, AWIC holds approximately 80% of the asset value, totalling R12.25 billion. However, in terms of Net Asset Value, deducting R5 billion in interest-accruing debt, its NAV is closer to R6.4 billion.
Waterfall City currently has a multitude of developments under construction, including the Ellipse residential hub, Nexus collaboration hub and expansions in the city’s logistics hub.
The transaction is pending shareholder and regulatory approvals, with no completion date or window yet set.
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