"We will use the residual capital from the proceeds of the sale to further Freedom's stated short- to medium-term strategy of focusing on developing our residential assets," Tyrone Govender, CEO of Freedom, comments. The current debt facility on the property will be settled resulting in a significant reduction of the fund's gearing level.
Freedom is a property capital growth fund, making it a unique asset. It was listed on the JSE to strategically develop a portfolio comprising mainly residential properties.
Its residential developments include Tweefontein Residential Estate in Steelpoort, Limpopo, where the demand for residential accommodation is currently placed at between 15,000 and 20,000 units, and growing. Also in Limpopo, Freedom is developing Tubatse Homes in Burgersfort.
At La Bonne Vie in Montana, Pretoria, Freedom will be bringing the first 22 sectional title units of a total 90 to market in early 2016. At Gevonden, on the high-demand urban edge of Stellenbosch, bordering the successful Welgevonden Estate, Freedom is preparing to develop 43 residential units for the mid-market.
In addition, as part of its pre-listing acquisition agreement for Kadoma Investments Proprietary Limited, Freedom has entered into agreements for a specific share issue with the Christo la Grange Gesins Trust and the Lafras Joubert Gesins Trust to issue 323,845,455 new Freedom ordinary shares. This will be used as full and final settlement of its guarantee share obligations. The issue is subject to approvals, including that of shareholders.
With growth and capital resources a priority for this young fund, Govender confirms that settling this consideration through a share issue will leave it free to continue to develop its extensive property portfolio using its existing cash flows and financial resources.
Aligning it with best practice and supporting its sustainable growth, Freedom also announced the launch of the Freedom Long-term Incentive Plan that, subject to shareholder support, will incentivise its team to meet strategic long-term objectives, and will help deliver value to shareholders. It is also designed to achieve alignment between Freedom's remuneration policy and the interests of its shareholders.
"Our incentive plan is designed to act as an employee attraction and retention mechanism in a market where highly skilled people are in high demand," Govender says.
Freedom will post a notice to its shareholders - including details of both the specific issue and the adoption of the Freedom Long-term Incentive Plan, and the related general meeting - around 30 September 2015.
