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Turnkey developer Calgro M3 secures €25m (ZAR 387m)unsecured funding from international development finance institution Proparco

Johannesburg, 25 October 2017 – JSE-listed property developer Calgro M3 Holdings Limited (“Calgro M3”), together with Proparco,today announced further information pertaining to securing its first international funding, a facility for ZAR 387 million (equivalent to €25 million), on an unsecured basis for a period of six years. It is the intention of the Group to secure all international funding in South African Rands and not to be exposed to any foreign exchange risk on this facility. This capital will contribute to the funding requirement to deliver 49,000 new low-income housing units in priority urban development areas.

The Group, which focuses on large-scale integrated developments, real estate investments (rental units) and the development and establishment of private memorial parks, recently reported an increase in revenue of 40.24% to R1 billion in its interim results for the six months ended31 August 2017.

“Whilst the funding facility was announced at our recent results presentation, the formalities relating to the funding have now been completed,” said Wikus Lategan, CEO of Calgro M3.

The funding is provided by Proparco, the private sector financing arm of Agence Française de Développement (AFD), France’s development bank, which has been working to support development in Africa for some 40 years. “This is the first funding, in the affordable and integrated housing sectors, that Proparco has undertaken in the world,” said Proparco Deputy Chief Executive Officer, Amaury Mulliez.

“Of the ZAR 387 million, Proparco is mobilising on a sub-participation basis ZAR 155 million – equivalent to €10 million – from AFD, our parent company. We are proud to be involved with Calgro M3, which is very much in keeping with the role AFD plays in the municipal and social housing sector in South Africa,” stated Denis Sireyjol, Regional Head of Proparco for Southern Africa and Indian Ocean.

“This will place Calgro M3 in a favourable position to roll out our pipeline of residential developments, armed with additional working capital,” added Lategan.

The current pipeline stands at some R27,7 billion, which incorporates both its Integrated Residential Property Developments (from which some units will be retained in its REIT JV) and the Memorial Parks businesses.

Lategan said that the Group would remain prudent with capital allocation.The first draw-down of ZAR 278 million (equivalent to €18 million) is anticipated in December 2017, with the second and final draw-down of ZAR 109 million (equivalent to €7 million) expected in May 2018. Lategan concluded that the interest is fixed for the 6-year period, payable in six-monthly intervals.

About Calgro M3

Calgro M3 is a JSE listed Turnkey Residential Property and Memorial Parks Developer, providing opportunities in all market segments, from the lower end through to the mid to high income segments. We specialise in Integrated Residential Housing Developments, Memorial Parks and Real Estate Investments, with sustainability at the core of our business.

The Group’s aim is to be leaders in those segments of the market in which it operates within the South African property industry, and to assist with change and adapting traditional social structures that are currently hampering the delivery of sustainable housing solutions and to increase access to quality Memorial Parks.

About Proparco

Proparco is a subsidiary of Agence Française de Développement (AFD) focused on private sector development. It has been promoting sustainable economic, social and environmental development practices for the past 40 years. Proparco provides funding and support to both businesses and financial institutions across Africa, Asia, Latin America and the Middle-East. It seeks to partner projects in key development sectors – infrastructure (with a specific focus on renewable energies), agribusiness, financial institutions, healthcare and education, etc. – and to boost the contribution of the private sector to achieving the sustainable development goals adopted by the international community in 2015. As a means to this end, Proparco finances businesses that are instrumental in creating decent jobs that pay decent wages, in supplying essential goods and services and in battling climate change.
For more information, go to: www.proparco.fr