IDC: NO PREJ­U­DICE IN OAK­BAY DELIST­ING

CityPress - - Business - DEWALD VAN RENS­BURG dewald.vrens­burg@city­press.co.za

The In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) says it ex­pects the Gupta-owned Oak­bay Re­sources & En­ergy to per­ma­nently delist from the JSE in a way that does not “prej­u­dice” it.

At stake is the de­vel­op­ment fun­der’s 3.6% share in the ill-fated com­pany, which has lit­tle re­al­is­tic prospect of stay­ing on the JSE af­ter “tem­po­rar­ily” sus­pend­ing its shares last month.

“Oak­bay has in­di­cated that, due to in­creased neg­a­tive pub­lic opin­ion about the com­pany, it is highly un­likely that it will be able to se­cure the ser­vices re­quired by a JSE-listed com­pany,” the IDC told City Press in an emailed re­sponse to ques­tions.

“The IDC’s ex­pec­ta­tion is that the process of delist­ing will be car­ried out in ac­cor­dance with the law and with due re­gard to the rights of all mi­nor­ity share­hold­ers, in­clud­ing the IDC.

“We will con­tinue to en­gage with the com­pany with a view to en­sure that the IDC is not prej­u­diced.”

The IDC lent Oak­bay R250 mil­lion in 2010 and the re­pay­ment date was 2013.

This was, how­ever, rene­go­ti­ated and the fi­nal set­tle­ment due date was changed to next year.

As part of that re­struc­tur­ing, the IDC agreed to con­vert all the in­ter­est that had ac­crued – more than R225 mil­lion at the time – into Oak­bay shares.

Over its time on the JSE, only a small amount of Oak­bay shares changed hands, and the com­pany’s value shot up and down on the ba­sis of in­con­se­quen­tial trans­ac­tions.

Asked what value the IDC now gave these shares, the fun­der only re­sponded that they were val­ued in line with how all IDC shares were val­ued – with ref­er­ence to the mar­ket value.

This illiq­uid­ity made the value the IDC has for­mally as­cribed to them ques­tion­able, but now these shares are not even hy­po­thet­i­cally trad­able.

Even at their nom­i­nal value when they were sus­pended, the IDC’s shares had fallen in value by 25% to R167 mil­lion.

The suspension of Oak­bay’s shares fol­lowed the com­pany yet again be­ing aban­doned by its re­quired ser­vice providers – a JSE com­pany spon­sor, River Group, and share trans­fer sec­re­tary Tiberium Fi­nan­cial Ser­vices.

Al­most a year ear­lier, Oak­bay’s pre­vi­ous spon­sor and trans­fer sec­re­tary also jumped ship – shortly af­ter most South African banks re­fused to do any fur­ther busi­ness with Gupta com­pa­nies.

The debt that was con­verted into shares was only the ac­crued in­ter­est on the orig­i­nal R250 mil­lion loan. The rest of the loan and sub­se­quent in­ter­est are still be­ing paid to the IDC.

A to­tal of R37.5 mil­lion was due last week, with an­other R37.5 mil­lion due at the end of March next year.

Af­ter that, Oak­bay still has to re­pay the cap­i­talised in­ter­est that has been pil­ing up. This was about R44 mil­lion at the end of Fe­bru­ary, ac­cord­ing to Oak­bay’s fi­nan­cial state­ments.

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