R650 million Dipula private placement oversubscribed

JSE-listed property company Dipula Income Fund today announced the results of its significantly oversubscribed private placement of R650 million in new capital for the fund.

The private placement of approximately 38 million A-linked units and B-linked units will be issued at R10.45 per A-linked unit and R6.67 per B-linked unit. This is a discount of 0.5% to the closing price on the day before finalising the pricing.

The successful capital raising will increase the combined market capitalisation of Dipula to nearly R2.5 billion with DIA’s at R1.5billion and DIB’s at about R1bn. 

Izak Petersen, CEO of Dipula Income Fund, says: “The success of the private placement reflects strong market support for Dipula. We are pleased with such a positive result. The take up of new units has increased the spread of Dipula unitholders which should also be positive for liquidity”

He adds the company’s A-linked units were fully subscribed while its B-linked units were significantly oversubscribed.

“This shows a positive trend in investor appetite and confidence in Dipula,” says Petersen. “When Dipula listed in August 2011 demand was strongest for Dipula A-linked units with their preferential distribution growth of the lower of 5% or CPI until the end of August 2017. Now investors have shown favour to Dipula B-linked units, which receive the residual distributable income after settlement of the A-linked unit distribution.”

Dipula Income Fund is a listed property loan stock company formed through the merger of Mergence Africa Property Fund and Dipula Property Fund, two majority black-owned property funds. Dipula has around 26% black shareholding, which is among the highest in the SA listed property sector. It is managed externally by Dipula Asset Management Trust, a 100% BEE company.

The capital raised will fund previously announced acquisitions. A little over a year since listing on the JSE in August 2011, Dipula has successfully secured five major transactions, growing its property assets by R1.4 billion. Following the implementation its latest acquisitions, Dipula’s assets will grow to 190 sectoraly and geographically diverse properties valued at approximately R3.5 billion.