Diamonds and Dogs
In our modern-day lives we want things to happen faster and faster . . . instant gratification has become the norm. So when something that we have been waiting for a long-time finally happens, we tend to treasure it.
The deal might have taken long to come but TSL finally managed to dispose of its stake in fellow ZSE-listed entity Nampak where it had a 16 percent stake. Part of the proceeds from the disposal, amounting to $14,98 million will go towards various capital projects in particular development of an Industrial Park at the Vostermans Property.
Plans are also underway to upgrade key properties.
While Vostermans is a long term project, it is the decision to pay a $4,8 million once-off dividend from proceeds of the disposal, which is set to cheer TSL’s shareholders. After all chances of TSL getting a dividend from the Nampak investment were very slim as the packaging company has not paid a dividend since dollarisation. TSL is thus better off selling the stake.
The sale, according to management also leaves the company with “adequate financial resources to meet its working capital needs and liquidity requirements for the foreseeable future.”
With a bark grander than its bite, the Zimbabwe Stock Exchange extended CFI’s suspension from trading on the bourse by an additional 30 days. It means that those who would want to trade out of the counter have no exit option, something which might affect their investment strategy.
Some might argue that the suspension was done in the best interest of minority shareholders who all things being equal stand to benefit if the corporate governance issues that led to the suspension are resolved.
This however is highly unlikely as the other major shareholder, Nicholas van Hoogstraten, seems to have lost all respect for the bourse which he says short changed him by sanctioning the sale of Langford Estates to a party that is related to the other shareholders.
“It makes not one iota of difference to me whether the company is listed or not,” Van Hoogstraten reportedly said and is very much unlikely to meet the ZSE’s demands which among other things require the company to comply with free float requirements as per Section 4 paragraph 4,25 (d) of the Listing Requirements.
The company is also expected to address the following governance related matters; appointment of a substantive board chairman, chief executive officer and finance director; and appointment of Independent non- executive directors who are not affiliated or have any association with any of the company’s shareholders
Chances of that happening are however very slim and minority shareholders have no choice but remain stuck with an illiquid asset.