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V&A Waterfront stake up for sale

Transnet and two of its pension funds have decided to dispose of their share in Cape Town’s V&A Waterfront, billed as South Africa’s most visited tourist destination.

The remaining shareholder, the Transnet Retirement Fund, has yet to decide whether it will sell its 22,6% share, or retain it and push it up to 26%.

The announcement was made jointly by Transnet CEO Maria Ramos and chairperson of V&A Waterfront Holdings, Bulelani Ngcuka, at the Waterfront on Monday.

A decision on the successful bidder was expected by September, Ramos said, adding that the shareholders reserved the right to switch to a listing process if they were not satisfied with the bids.

”This is a fantastic asset … this asset is good enough to sell itself,” she said.

She said the move was part of Transnet’s bid to focus on its core business as a freight transport company and release cash for its R64-billion investment programme in port, rail and pipeline infrastructure.

It had been looking at disposing of its 26% interest ”for some time”, and believed, given the impressive performance of the property market, that now was the right time to do so.

”Of course I’m not going to make any comment whatsoever on the price,” she said in reply to a question on what Transnet expected to get from the sale.

”That’s why we’re going through a process. All I can say is we’re looking for maximum value.”

The waterfront centre, which draws up to 22-million visitors a year, has vibrant shopping and restaurant areas, top-grade office space, several upmarket hotels, a marina, and working harbour and fisheries areas.

It also houses the University of Cape Town’s Business School, an aquarium, museums and the Nelson Mandela Gateway, the access point for tourists to Robben Island.

Half of the revenue from its developed property portfolio is generated by the retail sector, and another 25% by office rentals.

Ramos said she understood from the financial media that investors had already expressed interest in the Waterfront, but that the important point was that all bidders would have to go through a ”structured, transparent and equitable” process, that started with a non-refundable R50 000 fee for the documentation.

Bids would be evaluated on a points system of a maximum 100, with up to 85 points for the purchase price offered, less one point for every R25-million below the highest bid price.

Up to ten points would be allocated for bidders’ black economic empowerment credentials, and up to five for retention of V&A Waterfront employees.

Bidders would have until July 21 to register expressions of interest.

Ramos said only bids for a minimum 25% interest in the Waterfront would be considered, and that Transnet and the funds would prefer a transaction with a single buyer. – Sapa

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