African Harvest cash shell just waits for court to
June 10, 2003
By Vera von Lieres
Cape Town - Coronation Holdings had bought out minorities at African Harvest at R1.94 a share, which, once approved by the high court, would be followed by the delisting of the firm, Coronation chief operating officer Gavin Tipper said yesterday.
At a general meeting African Harvest shareholders had also given the green light to changing the firm's name to Coronation Equities.
The niched financial services company was essentially left as a cash shell last year when a consortium led by Mzi Khumalo acquired the main asset management, securities and investment banking businesses of African Harvest from majority shareholder Coronation.
About R600 million left in the cash shell was invested in the money market, Tipper said.
If the high court approved the scheme, African Harvest's listing on the JSE Securities Exchange would be suspended on June 30. The company would become a fully owned subsidiary of Coronation, which is restructuring and relisting its asset management arm.
Former African Harvest chairman Mashudu Ramano and a consortium that he headed were also in the running for a while, but surprisingly withdrew a last-minute counter bid only a few days after making it
.
Khumalo's consortium bought the main operating assets of African Harvest for a net amount in excess of R300 million.
African Harvest, as a cash shell, reported annual results in November that showed headline earnings a share of 2.6c for the full year compared with a 5c a share headline loss the previous year, benefiting from the sale of its main businesses.
Net operating income was significantly better at R12.5 million from a R16.9 million operating loss a year ago.
Coronation announced a major restructuring plan three months ago, which Tipper said had been put forward because the Coronation share had consistently traded at a discount to estimated fair value.
The realignment enabled shareholders to remain invested in a listed, more transparent asset management business, he said, and offered an opportunity to achieve a cash exit from the group's more volatile businesses.
Coronation's gained 25c to R54.25 while African Harvest was unchanged at R1.92 yesterday.
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