Table of Contents
Key Points
- The REIT is raising funds to support Fourways Mall upgrades and meet working capital needs amid ongoing financial restructuring.
- A previous R800 million deal with co-developer Azrapart expired; no new agreement yet, with potential write-down risks looming.
- Michael Georgiou’s Azrapart faces court-ordered supervision over unpaid debts; he sold shares in Accelerate to settle a loan.
Accelerate Property Fund, a Johannesburg Stock Exchange (JSE) listed Real Estate Investment Trust (REIT), partly owned by South African real estate mogul Michael Georgiou, is moving forward with a R100 million ($5.57 million) rights offer that opens today, July 14, despite continued uncertainty over an R800 million ($44.6 million) settlement deal tied to its largest asset, Fourways Mall.
In a statement released over the weekend, the fund reaffirmed its plans to restructure operations, stating that the proceeds from the rights offer will go towards upgrades at the Mall and support the company’s working capital needs. “The opening of the rights offer is an important step in our restructuring efforts,” the company said.
Accelerate seeks new mall agreement
This latest fundraising round builds on the R200 million ($11.1 million) Accelerate raised in June 2023 through a similar rights issue. However, a key settlement agreement signed in November 2023 between Accelerate and Azrapart, the co-developer of the Mall, has since expired. The agreement fell through after several required conditions weren’t met in time.
Shareholders were previously told that Accelerate would work to strike a new deal with these parties, using the same or similar terms as the original agreement. So far, both sides have shown interest in signing, but no final agreement has been reached. Discussions are ongoing.
If a new agreement isn’t signed, the company warned that it may have to write down the R800 million ($44.6 million) due from the related parties, an outcome that could significantly impact its financial statements. Accelerate said it would still publish its results for the year ending March 31, 2025, by the end of July, regardless of whether a deal is reached. Should talks fail, the company will seek legal advice and consider all possible avenues to recover the funds.
Debt woes hit Georgiou’s property holdings
Michael Georgiou has been a well-known name in South Africa’s real estate world for more than two decades, having developed and managed over 100 properties. He has served as a director at Accelerate since 2013 and helped build a portfolio that includes over 1,200 tenants and more than 440,000 square meters of space.
In recent months, Georgiou’s business empire has come under pressure. In June, Azrapart—his property firm—was placed under court-ordered supervision after it was found unable to repay billions in debt. The court questioned the credibility of a promised foreign bailout. The application was brought by creditors FirstRand’s RMB and Investec, who claim the company owes them more than R2.3 billion ($128.4 million). Azrapart is appealing the ruling.
Georgiou, who is Azrapart’s only director, was forced to sell part of his stake in Accelerate to settle a loan. In May 2023, he sold R56.9 million ($3.1 million) worth of shares after Investec exercised rights under a lending agreement. That sale reduced his stake in Accelerate from 29 percent to 21 percent, though he remains one of its biggest shareholders.