Kaap Agri to dispose of TFC shares for R502m
JSE-listed fuel and agricultural retail and trade company Kaap Agri will dispose of its share of fuel station property company TFC Properties for R502-million and will use the proceeds to reduce borrowings and provide dry powder for higher return generating acquisition opportunities, the company said on October 4.
TFC is a property holding entity owning 21 immovable properties on which fuel stations with quick service restaurants and other retail tenants operate. Kaap Agri will dispose of its 70.5% stake in TFC, equating to a disposal yield to shareholders of 10.2%.
"The historical rationale for acquiring retail fuel and convenience properties was aligned with the strategic drive of footprint growth in this new market. Given that TFC has successfully entered the retail fuel and convenience markets and, upon reviewing the returns generated on capital invested, it has been decided to dispose of TFC and, in doing so, enter into long-term leases to ensure tenure on its fuel retail sites," Kaap Agri said.
Based on the projected shareholder loan balances as at the effective date - one calendar month after all conditions have been met - the estimated purchase consideration payable to Kaap Agri, taking into account equity value and shareholder loan balance, is about R445.6-million.
The value of TFC's net assets according to its most recent financial results to September 30, 2020, was R471.88-million, and profits after tax attributable to the assets were R3.2-million, Kaap Agri said.
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