Redefine, with assets valued at 72.9 billion rand ($4.84 billion), resolved not to pay a dividend in its 2020 financial year amid uncertainty over the impact of the COVID-19 pandemic. On Monday, it declared an annual dividend of 60.12 cents, a 100% payout ratio.

The owner of retail, office and industrial properties said liquidity was less constrained compared to 2020, with 5.8 billion rand in cash and committed access facilities now on hand, compared to 2.8 billion rand in the last reporting period.

"The retention of the FY20 dividend as well as the proceeds received from the sale of Leicester Street and other non-core local property assets have created healthy liquidity during the year," it said, adding that other imminent property sales were expected.

Redefine swung to a headline earnings per share profit, the main profit measure in South Africa, of 72.27 cents in the full-year that ended Aug. 31 from a loss of 52.64 cents a year earlier.

It said it had made an offer to EPP N.V. shareholders to swap their EPP shares for Redefine shares at an independently verified fair swap ratio.

The deal will result in Poland's largest retail landlord EPP, in which Redefine holds a 45.44% stake, delisting and becoming a subsidiary of Redefine.

At 0950 GMT shares in Redefine jumped 11.7% to 5.35 rand, while EPP shares were 6.6% stronger at 12.69 rand.

"We want to enter into this transaction on the basis of restoring much needed liquidity to EPP, to assist them with significant debt maturities, which is impeding their ability to declare dividends," Redefine Chief Executive Officer Andrew Konig told reporters.

The deal also positions Redefine to benefit as retail demand increases in Poland, which is becoming a fast-growing e-commerce market.

The proposed deal would be conditional on restructuring transactions to bolster EPP's balance sheet, generate much needed liquidity and materially reduce EPP's loan-to-value ratio (LTV), which measures a property fund's debt relative to the value of its asset portfolio, Redefine said.

Redefine's own LTV reduced by 6.3% to 41.6% and aims to bring it below 40% by August 2022.

($1 = 15.0529 rand)

(Reporting by Nqobile Dludla; Editing by Kim Coghill and Edmund Blair)

By Nqobile Dludla