Conspiracy theories fire up over lack of dividend
ndustrial group Howden Africa, a provider of fans, compressors and heat exchangers to Eskom and the mining sector, looks a scary place to be right now.
In the past three months the company’s share price has lost around 30%, driven down by a dogged determination by directors not to pay out dividends.
On paper, Howden, with R650m (roughly R10/share) in cash at its financial year end, could afford a decent distribution. Even a much reduced payment might go some way towards a diplomatic solution (IM hears that some shareholders have already
Ipetitioned the company to consider a special dividend). Instead Howden has risked estranging its bigger institutional shareholders, some of whom have been outspoken on the dividend controversy.
Initially, directors delayed the dividend so as to bring a new empowerment transaction to the table. That has not happened, and there are valid questions around how much cash would really be needed to structure such a deal.
But more recently the company offered further justification for withholding payouts, including shoring up the