Shuf­fling along nicely

New in­vest­ments mainly in tech­nol­ogy and me­dia

Finweek English Edition - - COMPANIES & MARKETS -

WHEN STEL­LEN­BOSCH-BASED in­vest­ment con­glom­er­ate Remgro sold off its stake in Nam­pak last year, some key pro­nounce­ments were made about its strat­egy. At that time men­tion was made of cap­i­tal be­ing “avail­able for re­de­ploy­ment into as­sets which are more closely aligned with Remgro’s in­vest­ment strat­egy and in which Remgro has a higher de­gree of own­er­ship and/or in­flu­ence”. There was also an in­di­ca­tion Remgro would “now fo­cus on its core in­vest­ments”.

If we look at Remgro’s clean-up ef­fort then it’s been fairly in­dus­tri­ous in shoo­ing out the rats and mice. Its Nam­pak mi­nor­ity stake has been sold, the mi­nor­ity stake in di­a­mond miner Trans Hex has been un­bun­dled, its in­ter­est in tech­nol­ogy group Xi­a­com was un­cer­e­mo­ni­ously snuffed out and (most re­cently) the stake in mo­bile fi­nan­cial ser­vices spe­cial­ist Fun­damo sold for a good profit.

But with the mar­ket still plac­ing a 20% dis­count on Remgro’s in­trin­sic value of R136,12/share it would seem there’s still clean-up work to be done.

In that re­gard it’s prob­a­bly en­cour­ag­ing – per­haps even sur­pris­ing – to note Remgro is in ne­go­ti­a­tions to sell its ma­jor stake in ve­hi­cle re­cov­ery busi­ness Tracker, one of the first tech in­vest­ments made by the old Rem­brandt Group that’s served Remgro sat­is­fac­to­rily over the years. The stake is worth around R1,2bn and Finweek won­ders if any of the listed ve­hi­cle re­cov­ery firms – Digi­core and MixTelem­at­ics – might be in­volved in the ne­go­ti­a­tions.

The stake in for­mer in­dus­trial gi­ant Dorbyl – which is be­ing wound down to not much more than a cash bal­ance – should take care of it­self.

But what does Remgro plan for its hold­ing in doors and win­dows’ spe­cial­ist Wis­peco? Not­ing Remgro’s will­ing­ness to back glass spe­cial­ist PGSI in its stren­u­ous re­cov­ery ef­forts might prompt some spec­u­la­tion that Wis­peco (val­ued at R321m) could form part of a larger steel, alu­minium and glass group.

On the food front, TSB Sugar sold its cit­rus op­er­a­tions, re­al­is­ing an af­ter-tax cap­i­tal gain of R22m.

Prob­a­bly the most in­trigu­ing in­ter­est is Remgro’s 5% hold­ing in Im­pala Plat­inum. Clearly, this isn’t an in­vest­ment where Remgro holds a high de­gree of own­er­ship/in­flu­ence… nor is min­ing a core in­vest­ment. Its stake in Im­pala would fetch more than R5bn, which would push Remgro’s cash hold­ings close to the R11bn mark and mean it held suf­fi­cient am­mu­ni­tion for some se­ri­ous deal-mak­ing.

Ever since bail­ing out of Gold Fields and Bil­li­ton/Gen­cor all those years ago, Remgro hasn’t been con­sid­ered a com­mod­ity in­vestor. But then do we need to make any­thing of con­trol­ling share­holder Jo­hann Ru­pert’s re­cent delv­ing into di­a­mond min­ing (via Reinet)? Un­like Tracker,


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