In their plan to rescue the company, the Rebosis Property Fund business rescue practitioners envisage that they might cut jobs.
“No employee has been laid off since [the end of August 2022 when the business rescue practitioners took over],” Rebosis’ business rescue practitioners, Phahlani Mkhombo and Jacques du Toit, wrote in their rescue plan dated March 17.
“However, implementing the business rescue plan may lead to retrenchments.
“Retrenchments may be implemented on a staggered basis in line with reducing the required operations and selling the properties.”
At the end of August 2021, Rebosis had 202 employees, according to the company’s most up-to-date annual report on the Rebosis website.
The founder of Rebosis, property mogul Sisa Ngebulana, owns almost 29% of Rebosis A shares and 16.2% of the company’s ordinary shares. He set up the Rebosis Property Fund in 2010 and listed it on the JSE in May 2011.
While Rebosis owns several high-value income-generating properties, the business rescue practitioners wrote that the company came under increasing financial pressure.
According to City Press, one of the reasons for Rebosis’ downfall is that it accumulated too much debt, including paying out big dividends and buying UK property fund New Frontier Properties in 2015.
Rebosis tried to get out of its tight corner by selling properties, but ultimately this did not help the company avoid business rescue.
Another factor that knocked Rebosis’ share price and confidence in the fund was the sudden change in the company’s chief executive in 2018.
In June 2017, Ngebulana announced he would leave as Rebosis CEO to devote more attention to other businesses within his Billion Group. Rebosis board member Andile Mazwai replaced him.
Mazwai wanted to change the company’s direction so that it would own higher-quality offices and retail property and take over Texton Property Fund.
However, according to SA Commercial Property News, this differed from Ngebulana’s strategy of becoming a retail-focused fund.
Mazwai’s tenure suddenly ended when he resigned for “personal reasons” in April 2018. After that, Ngebulana returned to the role of chief executive.
“Between 2018 and 2022, [Rebosis] management attempted various restructuring initiatives, including the disposal of certain assets to raise liquidity, but none of these initiatives were successful,” wrote Mkhombo and Du Toit.
The Rebosis board resolved to place the company in business rescue on August 25 2022, and they appointed Mkhombo and Du Toit on August 30 of the same year.
“A meeting of creditors is scheduled for March 31 to obtain approval for the business rescue plan, and an announcement regarding the results of the creditors meeting will be released thereafter,” said Rebosis in a statement.
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