R800 million blow for owner of South Africa’s biggest shopping mall

Co-owner of Fourways Mall, the Accelerate Property Fund (APF), faces a possible R800 million impairment if it cannot reach a new settlement agreement with various parties around money owed to it.

In July 2024, Accelerate notified shareholders of an agreement between the fund and a convoluted web of entities tied to one of its main directors and shareholders, and co-owner of Fourways Mall, Michael Georgiou.

Georgiou owns the investment vehicle Azrapart, which owns 50% of Fourways Mall. He is tied to various entities involved with the mall and the Fourways Precinct, all owing millions to Accelerate.

In 2024, Accelerate and these entities reached an agreement to restructure various debts owed to fall collectively under Azrapart, totalling just under R800 million.

This included R632 million owed by the Fourways Precinct, R134 million owed by the Michael Family Trust, and R30 million owed by Azrapart itself.

To settle the debt, the groups found a creative solution where Accelerate agreed to pay Azrapart R300 million as part of a “rebuilt claim”, including R71 million for the delay in settling the claim.

In addition, Accelerate would pay Azrapart R75 million for an undivided share of 50% of the remaining bulk of development space, and another R242 million for an undivided share of 50% of the parking bays.

After finding a balance for all the debts owed between Accelerate and Azrapart, the total was brought to nil.

However, a year later, Accelerate has now notified shareholders that the agreement has lapsed and the terms of the agreement have not been met.

As a result, the group is currently negotiating a new agreement, but also risks not reaching one and having to write off the money owed.

“Although both parties have indicated their willingness to sign the new agreement, the new agreement has not yet been concluded as of 11 July 2025, and negotiations with the related parties are ongoing,” Accelerate said.

Deal or no deal

Accelerate warned shareholders that the outcome of the negotiations is uncertain and urged them to consider both scenarios when proceeding.

If the negotiations conclude successfully, Accelerate said that the new agreement will likely follow the same or substantially the same terms as the lapsed agreement.

As such, the new agreement will offset balances due to and from the parties to R0, resulting in no cash outflow for Accelerate.

If the agreement is reached, the group said it will convene a general meeting at which APF shareholders will consider and, if deemed fit, approve the New Agreement.

However, if an agreement is not reached, Accelerate said it is unlikely that it will be able to recover the R800 million owed to it.

Notably, Azrapart was placed under business rescue by the Free State High Court in June, following an application from creditors Investec and RMB.

“In APF’s assessment, the recoverability of the Related Party Receivables (debt) is contingent upon the conclusion of the new agreement,” it said.

“As the New Agreement has not been concluded, APF may likely determine that there is no reasonable prospect of recovering the (debt) and, therefore, the (debt) could be fully impaired in the Financial Results.”

The group said it will include the appropriate disclosures regarding the impairment of the debt and the amount, if this is the outcome.

It added that, if a new agreement can’t be reached, the APF board will take legal advice with respect to the ongoing validity and quantum of the claims which are the subject of the lapsed agreement.

This would include the R300 million rebuilt claim. It will also consider other ways to recover the amounts from the entities involved.

Regardless of the outcome of the negotiations, Accelerate said it would proceed with plans to raise R100 million through a rights offer starting this week (14 July).

The proceeds of the offer will be used for improvements to Fourways Mall and APF’s working capital needs.

The group will publish its full-year results for the year ending March 2025 on 31 July.