Oakbay offloads its media businesses
SCANDAL-prone Oakbay Investments yesterday moved to protect some of its assets offloading its media assets to controversial former government spokesperson Mzwanele Manyi.
The company said that it had reached an agreement with the Manyi controlled Lodidox for the sale of its shareholdings in its two media businesses, Infinity Media and The New Age (TNA), for a combined consideration of R450 million. It said Lodidox would take over Oakbay’s shareholding in Infinity Media, which operates the ANN7 News Channel, for R300m; and Oakbay’s two-thirds stake in TNA Media, the publisher of the newspaper, for R150m in a deal that was expected to be concluded in the “next few weeks.”
Oakbay acting chief executive Ronica Ragavan said that the sale was part the Gupta family-owned company’s commitment to preserve jobs and provide certainty to more than 7 500 employees throughout the group and to safeguard the inherent value of the businesses.
Ragavan said the sale would secure the future of the businesses. He said both businesses were inherently sound and well positioned for growth in their respective market segments.
“Under a new majority shareholder, Oakbay believes that both businesses and their employees will have the bright and prosperous future they deserve,” Ragavan said.
The proposed transaction comes two months after the interim SABC board canned TNA’s lucrative breakfast broadcasts which had cost the public broadcaster R20m.
Manyi said that he was particularly impressed that Oakbay shareholders had agreed to do a vendor financing at acceptable terms as part of their commitment to transformation and to expedite the transaction.
He said: “These are two strong businesses which are full of potential and, under the right external circumstances, can become an increasingly important and relevant part of the South African media landscape.”
Ardent defender
Manyi has been the Gupta family’s ardent defender, going as far as attacking the general media in South Africa. During his stint in government, Manyi also announced plans to place the government’s lucrative R1 billion advertising budget to media companies “telling the truth” about service delivery. Oakbay has been under intense public scrutiny after the country’s four major banks closed down their accounts last year citing reputational risk as a reason.
Last year, the company shares fell more than 10 percent after the Gupta family said they wanted to sell their businesses in South Africa.
The company eventually suspended its share on the JSE following increasing claims that it influenced key government appointments to its benefit.
Recently, even the Bank of China and Bank of Baroda severed ties with the company.
On Friday, the North Gauteng High Court ruled that there was no statute that empowered a member of the national executive, such as a minister, to intervene in a private bank-client relationship, in response to former finance minister Pravin Gordhan’s application for a declaratory order conforming that he did not have the authority to intervene between banks and their clients.