HCI groups smaller investments in new entity
BLACK empowerment investment holding company, Hosken Consolidated Investments (HCI), announced yesterday it would restructure some of its investments into a new investment platform, which would be listed on the financial services sector of the JSE and called Niveus Investments.
Niveus’ investments include Vukani Gaming, HCI Bingo, HCIKWV and Formex.
HCI, which has stakes in the Golden Arrow bus company, e.tv, gaming and hotel company Tsogo Sun and alcohol producer KWV, said the move was meant to offer direct exposure of these investments to shareholders.
“The investments which form part of Niveus have in the past been overlooked by investors because of their size relative to other larger and higher-profile HCI investments,” HCI said.
Sasha Naryshkine, portfolio manager at Vestact, said HCI shareholders should not expect anything immediately.
He said the restructuring was not “earth shattering”, but at least indicated intent. “It is a start in the right direction for existing share- holders, because whilst the initial unbundling seems small, it indicates to shareholders that HCI are comfortable with proceeding down this route.”
Shawn Stockigt, head of smallcap funds at Stanlib, said the restructure seemed to be a strategy to unlock some value with regard to smaller-quality investments that they have and go unnoticed as a result of HCI’s weighting in Tsogo Sun and the media interest.
“These smaller investments suffered during the recession, as they are geared to the domestic economy but the positive side is that these investments have now either started to break even, or have reduced losses significantly, so being in a vehicle where they are not overly diluted is positive from an investment point of view,” Mr Stockigt said.
The company said the listing is intended to provide Niveus with a source from which capital can be raised to facilitate expansion.
HCI’s shareholders will be given the opportunity to receive 11,95191 shares in Niveus for every one HCI share.