Table of Contents
Key Points
- Accelerate’s settlement deal collapsed, raising the risk of a $44.8 million impairment amid unresolved negotiations with entities tied to co-owner Michael Georgiou.
- Despite uncertainty, the REIT launched a $5.57 million rights issue to upgrade Fourways Mall and support working capital, following a similar $11.1 million raise in 2023.
- Georgiou’s firm Azrapart is under business rescue, with courts questioning its solvency, while he sold a $3.1m stake in APF to settle personal debt.
Accelerate Property Fund, a Johannesburg Stock Exchange (JSE)-listed Real Estate Investment Trust (REIT) partly owned by South African property magnate Michael Georgiou, is staring down a potential R800 million ($44.8 million) impairment as talks stall over a key settlement agreement linked to its crown jewel—Fourways Mall.
The firm, which announced the lapse of a crucial debt-restructuring agreement with related entities controlled by Georgiou, is still scrambling to finalize a new deal. At stake is nearly R800 million ($44.77 million) owed to Accelerate by entities including Azrapart—the Georgiou-owned vehicle that holds a 50 percent stake in Fourways Mall—as well as the Michael Family Trust and the Fourways Precinct development.
While both parties have expressed willingness to sign a replacement agreement, Accelerate said in a statement dated July 11 that the new deal remains unsigned, and that recoverability of the receivables is now in serious doubt.
Rights issue proceeds despite risks
Despite the uncertainty, Accelerate opened a R100 million ($5.57 million) rights offer on July 14, aimed at funding improvements to Fourways Mall and bolstering the company’s working capital. “The opening of the rights offer is an important step in our restructuring efforts,” the company said.
The new capital raise follows a similar R200 million ($11.1 million) rights issue in 2023, underscoring ongoing liquidity pressures. Shareholders have been warned to consider both potential outcomes of the stalled agreement—either a revival under similar terms or a full write-down of the debt, which would have material consequences for APF’s financials.
Failed deal, rising liabilities
Under the original November 2023 agreement, Accelerate had attempted to consolidate debts owed by various Georgiou-linked entities under Azrapart. The settlement structure included a R300 million “rebuilt claim,” R75 million ($4.19 million) for development rights, and R242 million ($13.52 million) for parking assets—ultimately zeroing out balances due between the parties.
But with the deal now void and Azrapart under business rescue since June—following creditor action from RMB and Investec—Accelerate may be forced to impair the full amount in its results for the year ended March 2025. These results are expected on July 31. If no new agreement is reached, Accelerate plans to seek legal advice on the enforceability of the previous claims and may pursue alternative recovery strategies.
Georgiou’s empire under pressure
Michael Georgiou, a top figure in commercial real estate for more than two decades, has seen his empire come under growing financial strain. In addition to leading Accelerate since its 2013 listing, Georgiou’s Azrapart has become embroiled in court-ordered supervision after creditors challenged its ability to settle R2.3 billion ($128.44 million) in debts. The Free State High Court questioned the legitimacy of a supposed foreign rescue package and placed Azrapart into business rescue. Georgiou, who is its sole director, has appealed the decision.
Amid the turmoil, Georgiou was forced to offload part of his holding in Accelerate. In May 2023, he sold R56.9 million ($3.18 million) worth of shares to cover a loan from Investec, dropping his stake from 29 percent to 21 percent. Accelerate’s ability to weather the latest storm may depend not only on the success of the rights offer, but also on whether it can extract value from Georgiou’s tangled web of property ventures.
