RMB Holdings (RMH) had since December, 2020 delivered a 46.5% return to shareholders as it continues with its monetisation strategy and is defending legal action from some shareholders relating to a property loan guarantee.
The group said in results for the six months to September 30, the return to shareholders included a R2 billion special dividend in September and a R1.1bn special dividend paid in May, 2021.
The halfway mark of its monetisation strategy had been breached, realising 63% of the net asset value as at June 30, 2020 the group said. The payment of the special dividend in September reduced net asset value per share to 98.8 cents from 238.6 cents, a decrease of 59%.
On September 7, an agreement RMH and RMH Property concluded with Brightbridge Real Estate to dispose of the equity interest in Atterbury Europe was successfully implemented.
There was, however, a dispute of about a R489 million loan guarantee provided to Atterbury. The guarantee had been provided by RMH and its subsidiary, RMH Asset Holding Company (RMHAH). The dispute revolves around whether Atterbury can convert the loan guarantee into equity or if it should repay the facility in cash.
“The RMH and Atterbury boards are exploring whether this dispute can be resolved. If these issues are not resolved amicably, they will have to be resolved in a formal dispute resolution process,” RMH said yesterday.
RMH said that it and RMHAH believed RMHAH could acquire the rights of the lender under the loan facility agreement, including the right of the lender to contest the validity of any conversion notice and/or not to accept any conversion notice.
“Hence RMHAH would not be obliged to accept conversion shares in payment of the loan, but may be able to insist on repayment of the loan by Atterbury in cash. But Atterbury has a different view,” RMH said.
Meanwhile, RMH shareholders owning 20.77 million RMH shares demanded an offer for cash at fair value. Subsequently, shareholders owning 2 000 000 shares withdrew their demand.
“The remainder have applied to court. RMH gave notice of its intention to defend, and its plea was handed in on December 6, 2022. RMH shareholders will be updated as the matter progresses,” RMH said.
RMH said its net asset value fell by 14% from R3.91bn at March 31, 2022 to R337bn at September 30. It delivered a loss after tax of R514m for the six months, compared to a profit of R177m for the comparative prior period.
This was mainly due to a R585m accounting loss on the sale of Atterbury Europe. The disposal of Atterbury Europe at 82% of IFRS carrying value on disposal date delivered a normal return rate of 23% over the life of the investment, RMH said.
Cash earmarked for RMH operating expenses and liabilities amounted to R283m (2021: R446 million). This decrease was due to a decision to increase the special dividend paid to shareholders by 17.7 cents, resulting in a total dividend per share of 141.7 cents per share. The disposal value of Atterbury would have equated to a special dividend of only 124 cents per share.
RMH said this was in line with the strategy of monetisation and returning maximum value to shareholders, while retaining prudent reserves.
“The board remains committed to the monetisation strategy of the balance of the RMH Property, taking into account prevailing trading conditions, which may have an impact on the timing of the execution of the strategy,” the group said.
BUSINESS REPORT