Staff trust pushing for stake if Independent sale goes through
THE staff trust of Independent News & Media SA still wants a 25% stake in the newspaper publishing group after the consortium led by Sekunjalo Investment Holdings chairman Iqbal Surve announced that it had a binding agreement with the Irish owners.
The R2bn offer the consortium had placed before Independent News & Media earlier this year had now become a binding offer of intent to buy the operations in SA, Dr Surve said last weekend.
The deal is now subject to regulatory approval from the South African Reserve Bank, the Competition Commission and the Irish stock exchange.
Independent News & Media has been under pressure to service a €420m debt that matures in May next year, and this has led to it selling its SA operations.
The local group owns 18 English-language titles including The Star, The Cape Times and Business Report.
Last month banks proposed a debt-for-equity swap as part of the restructuring that would include a large shareholder contribution.
Dr Surve has claimed the deal would be a coup for his consortium and would “bring the Independent group home”.
Alide Dasnois, editor of the Cape Times and a trustee of the staff trust known as Indi-Trust — Archbishop Emeritus Desmond Tutu is a patron of the trust — said she was optimistic that the new owners would see the importance of including the staff in any new shareholder configuration.
“The objective of the trust is to acquire a 25% stake in the South African company so as to ensure that staff have some influence in the future of these newspapers and in the expansion of the company,” she said.
Ms Dasnois said the trust was also encouraged by the statements Dr Surve has made so far about editorial independence, investment in the titles after years of brutal cost-cutting, and the development of a digital strategy and expansion into Africa.
“We are confident that he and the other members of the consortium will agree on the benefits of involving staff, across all departments and regions, and mobilising their expertise,” she said.
Dr Surve would not commit himself as to whether he would allow the trust to obtain a stake, saying he would discuss the issue when he returned from overseas.
Dr Surve’s consortium has been criticised for its lack of expertise in running a media group.
Avoir Research analyst Richard Tessendorf said a media group needs strong management expertise to ensure its sustainability.
Mr Tessendorf said the South African newspaper sector was showing a decline with only Independent News & Media’s Zululanguage newspaper Isolezwe posting a rising circulation.
“Independent News & Media SA will need substantial reinvestment to increase their readership. This may include the use of technology, but the uptake of broadband networks has been slow in SA,” he said.
“Also, only a limited number of the population use smartphones and other wireless devices to read news,” he added.
Dr Surve said he had been approached by several local and foreign companies with suggestions on how the group should be managed and run in future. But he gave no indication if he was considering any of these suggestions seriously.