Positive ripples in black empowerment waters
PERHAPS ONE SHOULD not get carried away yet, but the corporate bustle among some of the JSE’s most enduring empowerment companies could prove inspirational.
Brimstone Investment Corp (Pick of the Month on page 5) and African Empowerment Equity Investments (the old Sekunjalo Investments) are causing positive ripples with plans to separately list their respective fishing enterprises, Sea Harvest and Premier Fishing. Significant capital is being raised, collectively topping the R2bn mark.
Trade union aligned Hosken Consolidated Investments has arguably already done this — but the separate listings of Niveus, Deneb, Montauk and eMedia were low-key affairs sans significant capital raising.
Both Brimstone and AEEI companies launched in the mid-1980s as small investment companies funded largely by Western Cape community-based investors.
Unlike more illustrious empowerment groups, Brimstone and AEEI have endured. Brimstone’s share touched a low of 28c in 2001 when the company had “repaid” shareholders with a large special dividend after it restructured its cumbersome investment portfolio into a more streamlined strategic collective. Co-founders Mustaq Brey and Fred Robertson then had to fend off a low key hostile takeover.
AEEI teetered on the brink when its biggest investment, health and fitness group LeisureNet, collapsed. The shares hit a low of 10c in 2001, and faced several more years of capital-starved struggle.
Robertson told me recently that sticking with investments through thick and thin is the hallmark of empowerment. Indeed, doing the hard yards has toughened both Brimstone and AEEI. Spinning off the respective fishing enterprises should, presuming there is a market appetite for these specialist food counters, unlock considerable value for shareholders. Perhaps other spin-offs can be mulled in the ensuing years, possibly Brimstone’s short-term insurance arm Lion of Africa or AEEI’s technology operations under Ayo.
But looking beyond these specific counters, I would hope such value unlocking exercises will inspire other empowerment investment counters to come to market. Conspicuous by its absence from the JSE is a broad based, hugely diversified blackowned investment behemoth that can truly claim to be a vehicle to mobilise the savings of previously disadvantaged South Africans.
A black-owned Remgro could do wonders to harness the savings aspirations of South Africans, not to mention rapidly advance economic transformation. If we can’t have a sprawling BEE vehicle just yet, then please let the endeavours of Brimstone and AEEI spur many more small to medium-sized black-owned investment companies to the JSE this year.