Basil Read Properties, in which embattled construction company Basil Read holds a 50% interest, has entered into an agreement to lease, and possibly sell, two properties to Bobcat Equipment Company South Africa.
Basil Read Properties is a subsidiary of Thunderstruck Investments, a joint venture company in which Basil Read, which is in business rescue, owns a 50% interest.
As part of its business rescue plan, Basil Read is seeking to dispose of certain noncore properties.
The properties to be leased to Bobcat Equipment are located in Boksburg, in Ekurhuleni. The three-year lease agreement will start on February 1, 2020, but Bobcat Equipment is entitled to occupy the properties from November 1, this year.
Bobcat Equipment will have the option to renew the lease for a further three-year period, as well as the option to acquire the properties from Basil Read for at least R50-million.
If Bobcat elects to exercise the option to buy the properties within the first year of the initial three-year period, the purchase price will be R50-million. If the option is exercised only towards the end of the initial three-year term, the purchase price will increase to R55.65-million.
Basil Read on Monday said the properties were valued at about R66-million as at December 31, 2017.
Its share of the purchase price will range from R25-million to R27.83-million.
It will use the proceeds from the possible disposal of the properties to settle the liabilities commitments of Thunderstruck. The balance will be distributed to the respective shareholders.