Attacq scraps dividend due to debt deal


Attacq scraps dividend due to debt deal

Published Date: 2020-07-01 | Source: Stephen Gunnion | Author: Stephen Gunnion

Attacq scraps dividend due to debt deal

Lenders have agreed to relax covenants as long as it does not declare any further distributions this year.

Attacq has ruled out any more dividends this year due to the economic uncertainty that has resulted from Covid-19 and its need to preserve liquidity and ensure it can meet its funding requirements. Halting dividends was also part of an agreement with its lenders in return for leeway on debt that's due to be repaid over the next year.

In a trading statement, the real estate investment trust said it wouldn't pay a final distribution for the year to end-June or an interim distribution for the six months to end-December either. After paying a first-half dividend, it expected to meet the JSE's rules for REIT's which are required to pay at least 75% of distributable earnings to shareholders.

While it didn't expect to breach its debt covenants for the year, Attacq said it pro-actively approached its lenders, asking them to extend any debt maturing prior to September 2021 as well as relax its portfolio of covenants that are based on its interest cover ratio. They agreed to this as long as it held off on dividends.

Attacq said it continued to proactively engage and assist individual tenants across its SA portfolio, which includes retail, office, industrial and hotel assets. The overall occupancy rate remained consistent with a 0.2 basis point decrease to 93.8% at the end of May. While rent collections came under pressure in April and May they recovered in June, although retail collections before discounts and deferrals were still only at 66%.

Apart from its SA property portfolio, Attacq has developments at Waterfall between Johannesburg and Pretoria, an investment in Central and Eastern European property investor MAS Real Estate, and a portfolio of assets in Africa outside SA, which it is busy exiting. All development sites were temporarily closed during the lockdown. Retail properties in Ghana and Nigeria were also affected.

It said a further update would be provided once it had more certainty on its distributable earnings for the year.

Its shares fell 7.7% to R5.02 yesterday.

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