Rebosis Property Fund CEO Andile Mazwai has abruptly quit less than a year since his appointment to the top job over differences with the board about the strategic direction of the company.
The share price of Rebosis fell as much as 9% during Wednesday’s intra-day trade but finished 7.85% lower on the company’s announcement that its founder and former CEO Sisa Ngebulana will replace Mazwai.
In an interview with Moneyweb, Ngebulana said Mazwai’s resignation, which came five days before Rebosis was scheduled to publish its interim results ending February 28, followed discussions with the board.
“It’s unfortunate that he [Mazwai] had a different strategy to that of the board. Shareholders have also raised concerns for a while about the company’s strategy, which has impacted the company’s share price,” said Ngebulana.
The share price of Rebosis joined the ranks of 2017 losers – shedding more than 30% and delivered negative total returns (income and capital growth) of 3.5% over the same period.
Ngebulana described the board’s relationship with Mazwai, whose career is extensive across business and the stockbroking industry, as “healthy and good”.
This was supported by Mazwai who said he leaves behind a company “with a board and staff that I respect and wish to see Rebosis succeed”.
Mazwai’s exit means that Ngebulana will double up as deputy executive chair and CEO while the search for a permanent CEO is on-going.
Under Ngebulana, Rebosis has grown its direct property portfolio from R3.5 billion upon listing on the JSE in 2011 to over R18 billion, and has undertaken a strategy of selling non-performing office properties to focus largely on shopping malls.
Market watchers said Rebosis’s strategy changed when Mazwai was appointed as CEO from October 1 2017, as the company had an appetite for more office properties, which continue to struggle given an onslaught of supply and waning demand in light of SA’s sluggish economy.
Under Mazwai, Rebosis was rumoured to be in merger talks with Texton Property Fund, which has had four CEOs in four years, resulting in a share price rout that has seen the company underperform the sector.
A successful merger with Texton would mean that Rebosis would take on more office properties in its property portfolio, which is in contrast to its stated strategy of focusing on dominant shopping malls across SA.
Ngebulana said his top priority is to update the market about Rebosis’s property disposals to reduce debt in the business, restructure its loans to black economic empowerment partners and make clear the strategy of New Frontier Property, the UK property company in which Rebosis owns a 36% stake as of November 2017.
Market watchers also raised concerns about Rebosis selling its New Frontier shares, a move in which they saw as the company reducing its exposure to offshore markets at a time when its peers have ramped up diversification plans.
“Essentially my focus would be to tell the market how we will be a good retail-focused fund with good-quality and dominant retail assets,” said Ngebulana.
Mazwai’s sudden resignation has resulted in Rebosis pushing the release of its interim results from April 23 to May 8, to allow Ngebulana time to update himself with the company’s operational and financial matters, the company said.
After resigning in June 2017, Ngebulana shifted his focus to running property development group Billion, which had plans to build shopping malls, hotels, and casinos.