RMB Holdings scraps Romanian investment


RMB Holdings scraps Romanian investment


Published Date: 2021-03-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

RMB Holdings scraps Romanian investment

Shares of the investment holding company rallied after it said it would return the funds set aside for the investment to shareholders.

RMB Holdings (RMH) says it's not proceeding with a €50-million (R876-million) investment in a property development in Romania as some of the conditions won't be met by the long-stop date of 31 March.

The investment holding company said RMH Property entered the partnership opportunity with Atterbury Europe and the Iulius Group to develop a new hub for business, entertainment, retail and residential living in the Romanian capital Bucharest in November 2018. However, with certain land ownership conditions not met, it said the loan to Atterbury Europe would not be converted to share capital in the venture. Instead, it will be returned by Atterbury Europe and paid out to shareholders as a special dividend.

Releasing results for the six months to end-December, RMH said its property investments continued to be impacted by Covid-19, due to lockdowns and the resultant muted macroeconomic growth in the countries in which it operates through RMH Property. Still, it has reported a reduced first-half loss from its continuing operations after last year's unbundling of FirstRand helped it pay down debt.

It unbundled its 34.1% stake in the banking group at the end of June last year, leaving RMH Property as it's only asset. It has a portfolio of development assets spread across South Africa and Europe, anchored in a partnership with property development company Atterbury Group.

RMH said its net asset value remained resilient despite the pandemic, decreasing by 4% to R4.76-billion over the six month to end-June, largely as a result of the rand's strengthening against the euro. It said the operating performance of the underlying RMH Property investees was pleasing in the context of the current environment.

Its loss after tax narrowed to R45-million from R176-million, aided by the elimination of funding costs as all debt was settled as part of the unbundling. A year earlier, funding costs reached R139-million.

The gross value of RMH Property decreased by 4% to R3.6 billion by the end of December.

The company's shares rose 19% to R1.66 on Friday.


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