JSE-listed Attacq, as at May 31, had available resources of R1.1-billion, comprising of R741-million in cash and R310-million in committed liquidity facilities with banks.
No group or portfolio covenant breaches are anticipated for the covenant reporting period ending June 30, to be measured in September, it said on June 30.
Attacq reported that R1.2-billion of its interest-bearing debt had been due for repayment by December 31, 2019, with a further R3.5-billion due by June 30.
Given the economic impact of Covid-19 and the uncertain outlook, Attacq proactively approached its lenders requesting the extension of any debt maturing prior to September 30, 2021, as well as relaxations of its portfolio interest cover ratio (ICR) covenants in the form of reduced covenant levels or waivers of the covenants, as the case may be.
Attacq’s requests were well received by the lenders with credit approval obtained for all debt maturities to be extended to beyond September 30, 2021, and for the relaxation of its portfolio ICR covenants for the December 31 measurement period to be reported in March 2021.
In line with Attacq’s focus to preserve liquidity in these uncertain times, it agreed with its lenders to not declare a final distribution for the financial year ending June 30 or an interim distribution for the six-month period ending December 31, 2020.
SOUTH AFRICAN PORTFOLIO
The property and asset management teams continue to proactively engage and assist individual tenants across the entire portfolio (retail, offices, industrial and hotels) to ensure the long-term sustainability of Attacq’s tenants.
The overall occupancy rate remained consistent with a 0.2% decrease from 94% as at December 31, 2019, to 93.80% as at May 31.
Unoccupied space at year-end mainly relates to 2 Eglin, Brooklyn Bridge Office Park and The Ingress - building 2.
During the financial year to June 30, eight buildings were completed in Waterfall with a total primary gross lettable area (PGLA ) of 66 672 m2 and an effective PGLA of 42 657 m2.
There are currently four developments under construction. All sites have reopened for development post the Covid-19 lockdown.
The impact of Covid-19 on the practical completion and lease start dates has been assessed and programmes have been adjusted.
REST OF AFRICA RETAIL INVESTMENT
As at December 31, 2019, the Rest of Africa retail investment represented 2.2% of Attacq’s total gross assets. Attacq’s stated strategy is to exit this investment in an orderly fashion.
Attacq does not have any debt against this investment and future proceeds will be used to reduce interest-bearing debt elsewhere in the group. Progress is being made on the disposal of Ikeja City Mall, Nigeria.
To improve alignment between the AttAfrica shareholders, the minority shareholding in AttAfrica was acquired for a nominal consideration by Attacq and Hyprop Investments.
Covid-19 lockdowns in Ghana (Accra Mall, West Hills Mall, Kumasi City Mall) and Nigeria (Ikeja City Mall) adversely impacted trade and foot count. The situation has started to improve with the easing of lockdowns in these countries.
Given the uncertainty regarding the economic outlook as a result of Covid-19, the need to preserve liquidity and ensure compliance with funding requirements, the board has resolved not to pay a final distribution for the year ending June 30 or an interim distribution for the six-month period ending December 31.
Consequently, Attacq will not be declaring a final distribution for the financial year ending June 30.
Attacq’s dividends per share (DPS) will decline by 44.8% from the total DPS of 81.5c apiece for the year ended June 30, 2019 to 45c apiece, being the interim distribution for the period ended December 31, 2019.
Attacq indicated that it will update shareholders regarding its anticipated distributable earnings for the year ending June 30 once a reasonable degree of certainty exists in this regard.
Attacq’s annual results presentation is scheduled September 22.