ANDRIES VAN ZYL: You are listening to RSG Geldsake presented by Moneyweb.
The Sharemax property syndication, which is facing a liquidation application by the South African Revenue Service, is once again in the news because, according to a communiqué, the Nova Property Group, which has taken over the interests of the Sharemax investors, has been unable to access critical funding from Absa and Grindrod banks.
Tonight we are talking to the Nova Properties incoming chief executive, Dominique Haese. Good evening, Dominique.
DOMINIQUE HAESE: Good evening, Andries. We appreciate the opportunity.
ANDRIES VAN ZYL: Dominique, what funding is at issue here? Is it true that Absa and Grindrod have not agreed to the funding?
DOMINIQUE HAESE: That is so, as we stated in the communiqué that recently went out. But this funding is in no way related to the Sharemax or SARS issues.
ANDRIES VAN ZYL: What funding is involved, then?
DOMINIQUE HAESE: Look, Andries, the redistribution process that took place three years ago requires that some of the assets that Nova took over from the old Sharemax individual property companies at the time have to be upgraded – and that of course requires external bank finance.
After this long saga with the banks the Nova board has unfortunately had to change its plans and abandon the planned extensive upgrading of the assets to do smaller, more essential conservative upgrading, with a focus on retaining our tenants.
I think we are currently managing things very effectively and are therefore adding value in such a way that enables us to repay the debentures and the capital invested at the time.
ANDRIES VAN ZYL: How much money that you had applied for is at issue here, and what are the negative implications of not being granted it?
DOMINIQUE HAESE: In terms of the scheme we probably needed R150m, perhaps R300m. for the upgrading – which we unfortunately could not get from any of the banks because, I think, of the articles that came out today – as Ryk van Niekerk explained so well.
ANDRIES VAN ZYL: What are these reasons? Please mention one or two of them.
DOMINIQUE HAESE: Mainly because of the negative publicity that has been put out by the media. The banks are therefore withdrawing the lines of credit which we have been negotiating for, for months.
ANDRIES VAN ZYL: But don’t you make your own presentations, Dominique? If you, for instance, make a good presentation and say. “these are the true figures,” would this not then counter the misleading media reports?
DOMINIQUE HAESE: Thanks for mentioning that, Andries. It’s a very sad situation and I don’t understand it. It’s a real pity that the banks don’t want to provide finance. With the type of quality assets that we have which provide more than sufficient security and our ability to service any of the loans, we simply don’t understand why the banks can’t make a decision.
ANDRIES VAN ZYL: Just a final question. Your financial statements – the year-end has passed. They have to be published within six months. Have you released them yet?
DOMINIQUE HAESE: The Nova Holdings consolidated statements have already been sent to CIPC – I think on October 1. The minutes of our annual general meeting were posted to shareholders, so that has definitely been done in good order, which is how we do things.
ANDRIES VAN ZYL: That was Dominique Haese, the chief executive of Nova Property.
On the line now we have Magnus Heystek, investment strategist with Brenthurst Wealth, who has followed the Sharemax saga. Good evening, Magnus.
MAGNUS HEYSTEK: Good evening, Andries.
ANDRIES VAN ZYL: Your thoughts on the problems that Nova Property has experienced with Absa and Grindrod banks?
MAGNUS HEYSTEK: It would be a great pity if the investors, who have already suffered greatly, are disadvantaged even further as a result of so-called negative reporting by the media. I think it would be easy for Nova to lay their cards on the table and, for instance, publish the consolidated statements in the press. There’s unfortunately a fairly long history of a type of negative standoff between the media and the old Sharemax, and then of course Nova’s new format. So there’s already an antagonistic relationship between the media and Sharemax. It’s extremely difficult for people to get information about what precisely Nova is doing.
ANDRIES VAN ZYL: But Dominique has just said that they have published their results. What figures do you require that have not been released?
MAGNUS HEYSTEK: It’s a pity that you did not ask her to release them to RSG or Moneyweb. It’s extremely difficult to get hold of the numbers. They may indeed have been lodged with the CIPC, but the press really struggles to get hold of that information, and is usually told, as it’s not an investor in Nova, it is not entitled to that information.
So, Andries, I think the next step is for RSG or Moneyweb to ask to see the statements. Then we can have an open discussion. But, as I said, there is a long history of antagonism and Nova has now reported certain media groups – including Independent’s Personal Finance and I think Sake Rapport – to the press ombudsman regarding certain things about which it was unhappy. That’s what we are referring to. And when members of the press want to speak to them, they shut their doors and are uncommunicative. So if we could look at the numbers things might change very rapidly.
ANDRIES VAN ZYL: Well, we have had an interview with the chief executive of Nova Property. We will attempt to get hold of all those figures that the media is after. Thanks to Magnus Heystek of Brenthurst Wealth.