Ailing Gijima looks for R150m

GIJIMA, the technology company partly owned by ANC backer Robert Gumede, hit perhaps its lowest point on Thursday, when it posted a hefty R141-million pre-tax loss for the six months to December.

Gijima said it would now launch a rights offer at a bargain price of 5c a share — a third of its 15c share price on Thursday.

Gumede ’ s company, which employs 2 500 people, said it wanted to raise R150-million to “recapitalise ”.

This will heavily dilute the holdings of existing shareholders, who will be offered 309 shares for every 100 shares they hold at the moment. Gijima owes its funders R255-million.

Already, 70% of the shareholders have agreed to take up the offer, including Gumede ’ s Guma Group (36.5%), Allan Gray (23.8%) and Investec Asset Management (10%).

Nonetheless, investors were not impressed. After the loss was posted on Thursday, shortly before the market closed for the Easter weekend, Gijima ’ s stock fell 16% to 15c/share.

This underscores a dreadful year in which the share price has dropped more than 70%.

The company has lost contracts with Absa and the SA Police Service.

In 2009 it clashed with the Department of Home Affairs over its design of the ‘ Who Am I ’ identity recognition system it was developing, but this was resolved last year.

Gijima ’ s financial results were abysmal from any vantage point.

When all the operations that have been closed were stripped out, Gijima ’ s revenue was down 23% to R911-million, from R1-billion the year before.

Gijima described the past six months as “challenging ” and blamed the poor showing on the loss of the two major contracts during the second half — as well as the “limited new revenue opportunities in a tough market ”.