The AGMS of Hosken Consolidated Investments (HCI) and its various listed offshoots are not as well attended by shareholders and investors as the yearly meetings of investment giants such as PSG Group and Remgro.
HCI CEO Johnny Copelyn is perhaps not as enigmatic (or, for that matter, as revered) as PSG’S Jannie Mouton or Remgro’s Johann Rupert.
But the low-key (and disarmingly informal) AGMS do offer valuable insights into an intriguing conglomeration of companies. One of the more interesting comments from Copelyn came during the Niveus AGM, when he contended that unlisted subsidiary La Concorde struck a good deal by selling the operating assets of wine and brandy group KWV to Vivian Imerman’s Vasari Group last year. He suggested the buyers of KWV would really need to sweat the assets to secure a good return.
“We did well in the way we managed the [KWV] business, and we did well in the way we exited the business. We’ve done better with KWV than any other [previous major] shareholder . . . we are not hanging our heads in shame.”
With this in mind, it’s rather a shame that we will probably never be able to gauge Vasari’s progress with KWV’S wine and brandy portfolio — especially the latter category, which seems to be showing spirited gains in market share of late.
Another noteworthy observation was made during the emedia Holdings AGM, at which Copelyn addressed the continued participation of Remgro as a significant minority shareholder in the owner of e.tv, ENCA and Openview HD.
Responding to a question on when Remgro could switch its holding from unlisted emedia Investments into the listed company, Copelyn said it would be preferable for Remgro to swap its holding into the listed emedia Holdings. “We have not explored this, though. But if they [Remgro] wanted to we would not oppose it.”
The difficulty, of course, lies in the control structure of emedia, where lowvoting N-shares are not only more liquid but also trade at a premium to the ordinary shares. There’s also the sense that emedia’s share price is disconnected from the firm’s longer-term prospects. Consequently, finding an appropriate swap ratio for a sizable unlisted shareholding into listed scrip might be a fairly tricky exercise.
Debt funding dues
Small business financier Ecsponent has raised US$10M in debt funding from an unnamed British corporate financier. That’s a fair chunk of money for a company with a market capitalisation of less than R400m. To date Ecsponent’s funding efforts have been strenuous affairs — issuing high-yielding preference shares to investors to raise growth capital to invest in endeavours that need to generate above-average returns.
Ecsponent CEO Terence Gregory has never shied away from discussing the intricacies of this balancing act.
But the long and the short of it is that the company’s business model simply cannot afford any cash flow hitches in order to service a wad of preferential paper.
Though securing sizable debt funding is a significant development in Ecsponent’s corporate life, the market still appears to be in two minds. Over the past 12 months the share price has skittered as low as 9c and soared as high as 64c.
Brimstone-controlled fishing group Sea Harvest has bolstered its offshore presence with the acquisition — via its subsidiary Mareterram — of a mackerel business in Western Australia.
This prompts questions around whether Sea Harvest (primarily a hakefishing enterprise) or Mareterram (prawns, scallops and seafood distribution) would not also be angling for AVI’S Australian seafood business, Simplot.
Simplot would add much-needed bulk to Mareterram, one of the smaller listings on the Australian Stock Exchange.
The low-key AGMS of HCI and its offshoots offer valuable insights into an intriguing conglomeration of companies