Stuck in limbo yet again

The ce­ment maker has al­lowed spec­u­la­tion to mount af­ter an­other board­room tus­sle that has cost its CEO his job

Financial Mail - - BETWEEN THE CHAINS BY SIKONATHI MANTSHANTSHA - Gi­uli­etta Talevi tale­vig@ti­soblack­

Share­hold­ers of 125-year-old PPC got a nasty dose of déjà vu this week as the com­pany ap­peared yet to learn from its toxic board­room fall­out of 2014.

The ce­ment maker has re­fused to clar­ify why CEO Dar­ryll Cas­tle — who was brought in to sta­bilise PPC af­ter an un­seemly fight that split the board and share­hold­ers over the ten­ure of then CEO Ketso Gord­han — re­signed this week af­ter only three years in the job.

Share­hold­ers, many of whom helped sup­port last year’s R4bn make-or-break rights of­fer un­der Cas­tle, were none the wiser when the Fi­nan­cial Mail con­tacted them this week.

Vi­sio Cap­i­tal, which owns 2.42% of the stock, says it got “nowhere” with PPC’S board, chaired by for­mer Telkom fi­nan­cial di­rec­tor Peter Nel­son.

But, says Vi­sio chief in­vest­ment of­fi­cer Pa­trice Moyal: “One thing we can say is there’s a bet­ter board of direc­tors than be­fore and we need to give them the ben­e­fit of the doubt for now.”

Clearly, not ev­ery­one shares his con­fi­dence. PPC shares im­me­di­ately dived as much as 17% on the news, be­fore re­trac­ing slightly to close down 9%. But this means that over the past three years, its stock has shed 85% of its value.

PPC fobbed off ques­tions to its head of cor­po­rate af­fairs, Siob­han Mccarthy, who told the Fi­nan­cial Mail that the de­ci­sion to close ranks “wasn’t taken lightly. We’re well aware of the con­se­quences, but we have taken the de­ci­sion not to en­gage fur­ther”.

The prob­lem is that this lat­est ex­am­ple of cor­po­rate my­opia has pro­voked in­tense spec­u­la­tion as to what is go­ing on at the com­pany, which has R4.76bn in net debt, when it least needs it.

Not only is it fac­ing chal­leng­ing trad­ing con­di­tions at home and in Africa, but PPC’S board is dis­tracted, yet again, by merger talks with lo­cal ri­val Afrisam. They’ve been drag­ging on since Fe­bru­ary.

The two firms have at­tempted to com­bine op­er­a­tions be­fore, in 2015, but couldn’t agree on terms. Sources told Bloomberg this week that the lat­est round of ne­go­ti­a­tions were also floun­der­ing. One of the “stick­ing points” is whether to in­cor­po­rate Afrisam — which is two-thirds owned by the Public In­vest­ment Corp (PIC) — into PPC’S list­ing on the JSE.

The PIC is, in­ci­den­tally, also PPC’S largest share­holder.

It lifted its stake in the com-

Dar­ryll Cas­tle: Re­signed af­ter three years

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