»
Sep 06, 2007:
SE-listed IFA Hotels & Resorts has snapped up another 7.3% stake in landmark wine estate Boschendal in Franschoek – a deal which is curiously scant in detail.
The additional stake brings IFA’s stake in Boschendal to 26.6%, and one wonders whether the company (controlled by Kuwait-based IFA HR) means to take outright control of the upmarket wine estate.
In a statement Talal Jassim Al-Bahar, the CEO of IFA SA, said the acquisition reinforced the company’s confidence and belief in the Boschendal transformation and development plans.
“As an integral contributor to the Boschendal transformation initiative, supported by the local community and planning authorities, we are pleased to invest in an iconic South African brand such as Boschendal.”
But exactly who or which entity IFA bought its additional stake from is not clear. The amount paid for the stake was also not disclosed, which is disappointing since such a figure could help place a market value on Boschendal.
Values aside, it would make sense for IFA to bolster its stake in Boschendal further in lieu of major expansion plans at the estate. The current development plans – estimated at around R2 billion - for the proposed mixed-use development on Boschendal’s 2400 hectare estate includes residential homes, an upmarket retirement village, a boutique hotel and a mixed-use precinct combining shopping, offices and apartments.
This could be a highly profitable re-development exercise for IFA, but the bulk of the profits would go to other partners in Boschendal.
No doubt IFA has deep pockets and can comfortably carry the hefty development costs at Boschendal. But can its partners access such funding readily?
It does also seem IFA prefers to control its investments.
The group, for instance, owns the Zimbali Lodge and 50% of the Zimbali Coastal Resort joint venture in KwaZulu-Natal. Surely IFA would like to bring as much of the future development profits from Boschendal onto its income statement as possible? Interestingly, IFA is trading under cautionary on the JSE, warning shareholders that a possible deal was under negotiation. Could this refer to IFA acquiring more shares in Boschendal?
Currently the other major shareholder in Boschendal is Kovacs Investments, the empowerment company headed by Chris Nissen and purportedly funded by one of the appendages of the late Brett Kebble’s empire.
Currently the Bosch-endal estate is still in the planning phase, and incurring costs for IFA.
In IFA’s last set of results the group’s initial 19.25% share of the losses caused a negative after tax effect of R3.2 million in after tax profits.
That’s nothing to fret about for IFA, but the group would probably like to get the ball rolling at Boschendal sooner rather than later.
IFA reckons Boschendal is set to generate in excess of R2 billion in sales, of which a chunky R580 million has already been reserved.
