WestProp Holdings plans to separate its flagship Pomona City land bank from its core property business in a major restructuring aimed at sharpening its focus as a listed real estate company, while also creating a standalone vehicle for fresh investment.
The property developer has convened an extraordinary general meeting (EGM) for 1 September, where shareholders will vote on a Scheme of Reconstruction that will split the group into two entities.
Under the proposal, WestProp will retain operating assets worth about US$110.2 million and remain listed on the Victoria Falls Stock Exchange, while a newly created unlisted entity – Alpha Holdings Africa (Alpha) – will hold the 161.51-hectare Pomona City land bank.
If approved, all shareholders will receive Alpha Holdings Africa shares on a pro rata basis. Minority investors will then have the option to exchange those shares for existing WestProp shares under a voluntary exit offer priced at a 200% premium to Alpha’s net asset value.
In a circular to shareholders, the board said the separation would create a clearer investment proposition for the listed company.
“The board considers that the continued holding of this land bank within WestProp creates a less focused listed structure and does not align with the Company’s objective of presenting WestProp as a more clearly defined operating property business,” the company said.
It added that Alpha Holdings Africa would be better positioned to attract development partners, private equity investors and development finance institutions without the disclosure requirements that apply to a listed company.
“As an unlisted entity, it will be better positioned to attract development joint venture partners, private equity capital and development finance without the disclosure obligations of a VFEX-listed vehicle. No listing of the entity is planned at this time,” WestProp said.
The company said the exit offer would allow minority shareholders to consolidate their investment in the listed business while giving others the option to retain exposure to the long-term development potential of Pomona City.
The board is also seeking approval for a 100-for-three share split after completion of the exit offer, increasing the number of issued shares from 30 million to one billion without changing shareholders’ underlying economic interests.
WestProp said shareholders who reject the restructuring would halt both the asset separation and the exit offer.
“Should shareholders fail to approve the Scheme, the Exit Offer will not be implemented and the separation of assets will not occur,” the company said.
The EGM is scheduled for September 1, with the restructuring expected to become effective on 2 September, subject to shareholder approval and the fulfilment of regulatory conditions.