Acsion introductory listing a success with shares tightly held

Financial Director Pieter Scholtz said shares in the group traded normally despite the listing being done as an introduction of the shares rather than a conventional private placing. "We had much more bids than offers," he said.

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Altogether 130,000 shares worth R1.4m exchanged hands at R10.81 a share by midafternoon. Bids outnumbered offers 13:1, indicating that the shares were tightly held.

Acsion is the latest property listing on the JSE and follows that of Sirius last Friday and Pivotal on Monday.

At the opening price of R10.80 a share, Acsion has a market cap of R4.265bn and has mainly retail assets. It decided to go ahead with a listing despite indicating the favourable cost of debt funding it has with several banks. This makes the cost of equity in a listing more expensive.

The group has a low gearing of 7% and can raise this to about 40% without coming to the market. Debt facilities at financial institutions amount to R1.5bn. The market offer was 70% subscribed.

CEO Kiriakos Anastasiadis said he was happy with the arrangements as it would not be fair to shareholders if capital was not optimally funded on a cheaper basis.

"The introduction creates a platform of liquidity for the existing shareholders of the company, many of whom have been invested in the group for a long period."

Acsion's shares suffer from illiquidity at present, with the free float only about 20%. The JSE gave a green light for the listing to proceed without concluding the placement. Acsion directors have the discretion to proceed with the private placing. Anastasiadis said it would not be within 18 months.

Scholtz said the group wanted to develop a track record before the private placement. It anticipates seeking equity capital for property development once its debt capacity has been utilised. "The listing creates a platform to raise capital when required to fund future development opportunities," he said.

Acsion is a net asset player intending to grow capital, not a real estate investment trust, whereby 75% of earnings have to be distributed. "Our aim is to achieve capital yield growth of 15% and to regear debt to cheaper bank finance," Scholtz said.

The portfolio has a total gross lettable area of 188,416m² and is independently valued at R3.2bn. It consists of two regional malls in Gauteng (Mall@Carnival and Mall@Reds) and three community malls in Gauteng, Mpumalanga and Limpopo, and a light industrial development in Centurion.