Low-cost housing development company Calgro M3 has entered into a sale of shares agreement to dispose of 30% of its equity interest in its subsidiary Fleurhof Extension 2 to South Africa Workforce Housing Fund, in a deal worth an estimated R30-million.

Calgro 3M stated on Friday that in response to the current depressed and uncertain market conditions facing both local and international business, and in light of ongoing commitments facing Calgro in connection with various upcoming development projects, management considered it prudent to inject capital into the business by partnering with a local equity funder.

The capital raised from the transaction would be used to partly satisfy the medium-term funding requirements of the property development on the farm Vogelstruisfontein, but would also assist in derisking the wider Calgro group by providing a source of easily accessible capital funds.

Further, management believed that its relationship with the International Housing Solution group, the interest of which the South Africa Workforce Housing Fund represented, would not only provide capital resources, but also potential future investment opportunities for the wider Calgro group.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.