Stellar looking to sell Amecor

Investment group Stellar Capital Partners is looking to sell Amalgamated Electronic Corporation (Amecor) in a potential deal that will reduce its exposure to the industrial sector.

Investment group Stellar Capital Partners is looking to sell Amalgamated Electronic Corporation (Amecor) in a potential deal that will reduce its exposure to the industrial sector.

With a market value of R645m, Stellar has a sharp focus on financial services through its 49% interest in fund manager Prescient, which has overseen R86.4bn in assets under management as of June. Prescient also has R260.5bn in clients’ assets under administration.

The company said on Friday it was considering offers from potential buyers of its 100% interest in Amecor, which focuses on technologies relating to security and electronics.

The latest developments followed an earlier decision by Stellar, which is backed by Christo Wiese, to bail out of Tellumat, which offers electronic technology within the telecommunications, defence, transport and energy industries.

“The company remains committed to reducing its exposure to the industrial sector in a practical and organised process and, in turn, to ensuring that the longterm approach results in improved shareholder returns and the efficient allocation of capital,” it said on Friday following its year-end results.

NET ASSET VALUE

Stellar’s net asset value declined 19% to R1.05 per share in the year to June, from a matching period a year ago, led down in part by the sharp drop in the value of Torre Industries shares on the JSE. Torre provides equipment and machinery, vehicle parts, financing and support services to its customers in selected high-growth markets in the industrial sectors across Africa. Its shares dropped to 71c, from R1.49 a year earlier.

As a consequence, Stellar’s unrealised fair value losses were R228.2m, an improvement from a loss to R276.7m in the year-earlier period.

Lack of liquidity in the listed Torre share price also worsened the disconnect between the traded share price and Stellar’s assessment of the intrinsic value of the business, said Stellar.

Torre will delist from the JSE as part of its plans to raise black ownership from 29% to 51%. Torre said in July this was a “business imperative” that would be easier to achieve in the unlisted market.

Stellar shares have risen 15% to 60c a share in 2018, outpacing the JSE all share, which is down 1%, excluding dividends.